Student debt in America is at its highest point in history. Americans owe upwards of $1.5 trillion in student debt with the average borrower owing $50,000.
But what can you do about paying off that debt?
NBC 7 Responds spoke to Kelsey Sheehy, a personal finance writer for Nerdwallet.com, for some advice on graduating from debt.
Sheehy said one easy way to pay off loans quicker or get those monthly payments down is to refinance your student loans.
“The primary benefit to refinancing a student loan is to get a lower interest rate, which in turn can save you money,” said Sheehy.
Doing so could save you thousands over the life of your loan. And, the higher the student loan, the more you could save.
But before you go out and start shopping around for companies to take over your student debt, Sheehy said it’s important to keep in mind that not everyone will qualify.
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“The lenders look at your credit score, your debt-to-income ratio and your overall financial picture,” said Sheehy.
Sheehy encouraged borrowers to pay attention to the details offered by the lender to make sure your loan is protected. Also, make sure to find out if your loan is from a federal lender or private lender. The same protections typically do not apply.
Another benefit to refinancing, said Sheehy, is there is generally no charge to do so and even if the monthly payments don’t go down, a lower interest rate will allow you to get out from the debt much quicker.
“Even if it doesn’t save on monthly payments, you can shorten that term and pay more every month than you’re paying right now, shortening the life of your loan.”
