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09 May 2018, 21:21
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I'm sorry to say I simply cannot wrap my head around how refinancing a student loan works and wondering what it means to the application process for loans? Am I better off getting a bigger loan and refinancing with a different company
If someone could please explain to me the black magic of refinancing and how that works into these options that would be tremendously helpful and much appreciated.
If someone could please explain to me the black magic of refinancing and how that works into these options that would be tremendously helpful and much appreciated.
07 Nov 2023, 23:20
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Hey there,
Let's start by explaining what education loan refinancing means in plain language. It's like getting a new loan that has a better interest rate to pay off your old education loan. The goal is to make your loan terms and interest rate more favorable. For example, imagine you got a loan for your education in a hurry, and it has a high-interest rate and not-so-great conditions. Now, when it's time to pay back the loan, you might want to switch to a different lender who can offer you better terms and a lower interest rate to make it easier for you to repay the money.
First up, the major benefit is a chance to save a lot of money with a lower interest rate. When you refinance your education loan, you are basically putting money back in your pocket. Let's understand this with an example: You initially took out a 20 lakh loan at a hefty 12% interest rate, a 9-year repayment term that includes 2 years of your course. The interest alone would cost you around 19 lakhs INR. However, if you refinance this loan after you complete your course, at say 10% for 7 years, the overall cost effectively drops to about 11 lakhs INR. The difference is pretty substantial – we are talking 8 lakh rupees in your in your pocket.
Apart from this few other benefits of education loan refinancing are -
1. Shifting secured education loans to unsecured, helping in freeing your collateral.
2. Helps in extending the loan tenure (but this may lead to an overall increment in your interest payable)
3. Helps to consolidate various loans into one.
We hope this helps. In case you need more information use the link in our signature to contact GyanDhan.
Let's start by explaining what education loan refinancing means in plain language. It's like getting a new loan that has a better interest rate to pay off your old education loan. The goal is to make your loan terms and interest rate more favorable. For example, imagine you got a loan for your education in a hurry, and it has a high-interest rate and not-so-great conditions. Now, when it's time to pay back the loan, you might want to switch to a different lender who can offer you better terms and a lower interest rate to make it easier for you to repay the money.
First up, the major benefit is a chance to save a lot of money with a lower interest rate. When you refinance your education loan, you are basically putting money back in your pocket. Let's understand this with an example: You initially took out a 20 lakh loan at a hefty 12% interest rate, a 9-year repayment term that includes 2 years of your course. The interest alone would cost you around 19 lakhs INR. However, if you refinance this loan after you complete your course, at say 10% for 7 years, the overall cost effectively drops to about 11 lakhs INR. The difference is pretty substantial – we are talking 8 lakh rupees in your in your pocket.
Apart from this few other benefits of education loan refinancing are -
1. Shifting secured education loans to unsecured, helping in freeing your collateral.
2. Helps in extending the loan tenure (but this may lead to an overall increment in your interest payable)
3. Helps to consolidate various loans into one.
We hope this helps. In case you need more information use the link in our signature to contact GyanDhan.
