Many students find that their loans are not completely paid off after graduation. In addition, many students find that they owe more on their loans than they can possibly pay off after graduation. This is when refinancing becomes an option. A Wells Fargo refinances for student loans is a way to reduce or even eliminate your student debt. There are several advantages to refinancing with Wells Fargo.
If you have had an auto loan, home equity loan or other loan and are behind in your payments, you may qualify for a refinance with Wells Fargo. Many students choose to refinance student loans to free up cash they can use for other expenses. It can also lower the amount of interest you pay on your loan. Many people choose to refinance student loans so that they can consolidate their debt or get lower rates on their mortgage or car loan.
There are several advantages to refinancing a student loan. Refinancing can reduce or even eliminate your monthly payments by reducing the total amount of debt you have to pay. The monthly payment may go down, allowing you to have some extra money each month to do whatever you like with it. The new loan may also allow you to lock in a lower interest rate or lower your loan amount.
Many students have a difficult time paying off their college debt. Student loans are often high interest with only fixed payments. Refinancing allows you to consolidate your debt and get a better interest rate. You may be able to save money over the life of the loan by getting a lower overall interest rate on your refinance student loans. This is good news for you as well as your education.
While you have the potential to save money, there are some disadvantages to refinancing student loans. One disadvantage is that many times you will have to start all over again if you have taken out more than one student loan. If you had trouble paying off your first mortgage then the chances of having trouble paying off your second one will probably be small. However, if you have multiple student loan debts this may not be a good outcome for you.
Another disadvantage to refinancing your student loan is that you have to give up your private option in which you could choose a lender that would agree to discount your interest rate. You will have to go through standard loan application procedures with the lender you choose. Even if your lender agrees to discount your interest rate, you will still have to pay your normal interest rate plus a very large fee. You also have to pay for the administrative cost of having to do these standard loan applications. These fees can add up and end up being more than the savings you realize from refinancing your student loans.
A third disadvantage to refinancing student loans is that you will have to give up your federal loan protections. These protections are designed to help you if you are struggling financially and can no longer afford to make your monthly payments. Without this protection your lender has the right to take your federal loan directly out of your bank account and sell it to another company. This will effectively strip you of your federal loan protections and you will not have access to them ever again.
A fourth disadvantage to does Wells Fargo refinance student loans is that the interest rates are higher than average. You will pay several hundred dollars a month more for your student loan when you refinance. The fees that you will pay for the refinancing process are also higher than average as well. It is definitely a trade off that can benefit you, but one that you need to carefully consider before you sign on the bottom line.