Should I refinance my student loans as lump sum?

I am looking into refinancing my student loans. Right now I have multiple student loans under Sallie Mae. All are different amounts with different interest rates. When looking into refinancing, is it better to refinance them as a lump sum amount with one payment and one fixed interest rate or refinance them individually to see if some get better rates than others? 

6 Answers

  • yes/...............................

  • 4 weeks ago

    Roll all the loans together if the rate on the new loan is lower than the current rate on that particular loan.

    Don't roll lower rate loans into a consolidation loan with a higher rate - the one exception would be if you go from a variable rate to a fixed rate that is only slightly higher.

    For example lets say you have 4 separate loans at 3%, 6%, 7% and 9% interest rate. If you can get 5% fixed rate on the new consolidation loan, then you should ONLY include the 3 loans that are currently at higher rates - but don't roll the existing 3% loan into a 5% loan.

    Look closely at the loan term. Consolidating into one payment with a longer term sounds attractive because it can reduce your overall monthly bill, but you end up stretching the debt over a longer period of time and paying more interest in the long run.

  • A
    Lv 7
    4 weeks ago

    refinance  all if you can get a lower rate, otherwise just refinance the higher interest loans

  • 4 weeks ago

    Most likely the lump is best.

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  • Scott
    Lv 7
    4 weeks ago

    That's called a "consolidation loan". Run the numbers, it might save you some money.

  • 4 weeks ago

    If you can get them together into a better interest rate, yes. Otherwise, just start paying them off smallest loan to largest regardless of interest rate. That way you get a feeling of accomplishment once you pay one off. 

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