Can You (And Should You) Refinance Your Student Loans?

If you have student loans, you’ve probably considered refinancing more than once. One question likely stopped you from going through with it: Is this a wise choice? It’s a common thought that many of our clients aren’t sure about when they come to us. So, should you refinance your student loans? We can help you decide. Take a look at these five considerations to help you decide if refinancing your student loans align with your financial goals.

1. Determine the type of student loans you hold.

Generally speaking, there are two primary types of student loans: federal loans and private loans. The types of loans you hold may impact your decision to refinance. Take a few minutes to review all your student loan origins. Are they federal loans, private loans, or a combination of both? While private loans can be refinanced, federal loans cannot. Instead, you can combine several federal loans and possibly lower monthly payments through a process called consolidation.

2. Consider an income-based repayment plan for federal loans.

For federal loans, consider enrolling in an income-based repayment plan. These plans can lower your monthly payments based on your monthly take-home pay. Plus, after twenty to twenty-five years of consistent payments, the remainder of your federal loan debt will be forgiven. Consider, too, that if you convert your federal student loans to private loans, you won’t be eligible for any future federal loan forgiveness programs. That’s why it may be favorable to keep your federal student loans intact.

3. For private student loans, consider refinancing.

If you hold any private student debt, it’s worth looking into refinancing these loans at this time. With interest rates at historically low levels, you can negotiate a new interest rate that may reduce your overall student loan burden, and lower the amount of interest versus principal you’re repaying on a loan. Refinancing loans can potentially lower your monthly payments and make private student debt more manageable.   

4. Take a calculated approach to refinancing.

If you have a solid credit score and a strong history of loan repayment, there’s a good chance you’ll be able to take advantage of securing a new, lower interest rate for your private education loans. Just remember to do your due diligence by collecting loan refinancing quotes from several different reputable lenders before you make your decision. A financial advisor can serve as a sounding board as you walk through the refinancing process.

5. Check on your variable-rate student loans.

If you hold any variable-rate student loans, you might consider refinancing these loans with a fixed-rate loan. If you make the choice to keep a variable rate student loan, you can see dramatically different monthly payments that change depending on changes in interest rates. Transferring these loans to a fixed-rate loan can help to lessen the impact of market volatility and provide you with a more consistent and sometimes lower monthly payment plan. A financial advisor can help you determine if you hold any of these types of loans. 

Let Southwestern Investment Group Answer Your Questions About Student Loans

If you’re not sure how to begin refinancing your private educational loans, our advisors can guide you through the process of identifying your loan sources and answering any questions you may have about refinancing student loans. Contact Southwestern Investment Group today to schedule a consultation!

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Jeffrey T. Dobyns


President, SageSpring | Financial Advisor, RJFS 

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Beyond crunching numbers and investment strategies, at SageSpring, we’re about building relationships. When you encounter Founder & President of SageSpring, Jeff Dobyns, it’s easy to understand why this is at the very heart of who we are as a firm. You won’t find stuffy formalities with Jeff; instead, you can expect to find him sharing a warm smile, communicating a compelling vision, or patiently untangling life’s complex challenges with clients. He believes in truly getting to know clients, understanding their aspirations and priorities, and navigating their financial plans with a tailored, comprehensive approach. Our team members have often been caught taking notes on Jeff’s effortless relationship skills from a distance, and we admire them for striving to learn from one of the best. 

Jeff’s financial expertise and wisdom are the perfect match to his innate people skills. Jeff holds the prestigious CERTIFIED FINANCIAL PLANNERTM certification, Chartered Life Underwriter (CLU®), and Chartered Financial Consultant (ChLU®) designations, and has held executive positions with financial planning firms for more than two decades. 

His dedication extends beyond the office to the boardroom and the local community, where Jeff is passionate about giving back. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. Jeff actively supports other initiatives in the community by sitting on the board of The Signatry of Middle Tennessee and the Halftime Institute of Nashville. 

Witnessing his four children, Gracyn, Hunter, Tanner, and Logan, excel on the field is almost just as rewarding, if not more, than celebrating the victories of seeing his clients overcome obstacles and build wealth. Spending weekends boating on the lake, hiking mountain trails, and fishing with his family are the moments Jeff cherishes most. It’s this grounded perspective that reveals the true meaning of wealth for Jeff: not just numbers on a page, but the freedom to create experiences that enrich your life and the lives of those you love. When you choose the Dobyns McMillin Wealth Team, you choose more than financial expertise. You choose a partner who champions your dreams, celebrates your victories, and walks besides you on the path to achieving your unique goals.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER TM, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.