Whether it’s your mortgage, credit card bills, or student loan debt, those monthly payments can get a little overwhelming—especially if you have all of the above and more. Fortunately, there is a better way. Refinancing your loans can streamline and reduce your monthly payments, lower interest rates, and consolidate your debt. If you’re dealing with multiple loan payments or think you might be able to get a better rate elsewhere, refinancing may be your answer.
What does it mean to refinance your loans?
Refinancing involves obtaining a new loan to pay off one or more existing loans. Most traditional lenders also offer refinancing options in addition to loan options, so you can often refinance your loans with the initial lender. However, many borrowers choose to refinance with a new lender for various reasons, including better service and terms.
Types of loans to refinance in Ohio
As of 2021, the average American consumer has debt of nearly $100,000. You likely have some form of debt at the moment, and it’s likely one of the options below. Read on to see how someone can refinance each type of loan in Ohio.
Student loans are one of the largest sources of debt for many Americans. College students usually get a combination of private loans, subsidized federal loans, and unsubsidized federal loans to pay for tuition. Once they graduate, they may find themselves with a handful of loans at various interest rates and monthly payments that slowly overwhelm them. These student loan refinances can streamline monthly payments, generate one lower interest rate, and even reduce total monthly payments in the long run.
Lenders often refinance their mortgage to either get a better interest rate or shorten its term from a 30-year mortgage to a 15-year mortgage. Refinancing for a lower interest rate lowers your monthly payment and increases the home equity build rate. On the flip side, many homeowners choose to maintain the interest rate and shorten the term of the mortgage in order to pay off their home sooner.
Lowering your monthly car payments can help you save money and prevent you from defaulting on your debt. Keep in mind that some lenders take into account certain details, such as the vehicle’s age, total mileage, and more.
Learn more: Ohio auto loans for all types of credit
Refinancing with a personal loan is a great way to deal with credit card debt. Consolidating credit card debt into a single personal loan simplifies your payments and makes it easier to process your debt. Additionally, personal loans usually have lower interest rates than most credit card companies, so lenders end up saving for the long haul.
Learn more: Poor credit refinance loans for ohio
Small business loans
Many small businesses refinance their debt to increase margins. Refinancing small business loans, like other loans, result in lower interest rates and lower monthly payments, allowing small businesses to relax and focus on running their business without worrying about their debt.
5 reasons to refinance your loans
Refinancing your loans can have many benefits. Here are the top five reasons to refinance your Ohio loans and take back control of your personal finances.
1. Low interest rate
Refinancing can often lower interest rates for borrowers. When you refinance a loan or multiple loans, you have the opportunity to borrow from a new lender. This lender will reassess your income and credit history. You may be in a better financial position than when you first took out the loan, and thus qualify for a much lower interest rate.
2. Lower monthly payments
Refinancing your loan can also result in a lower monthly payment. If your primary loan has a ten-year repayment period but you refinance it to a twenty-year repayment period, your monthly payments will naturally decrease. Lower monthly payments and a longer repayment term may cost more in the long run, however, as interest accumulates.
3. Debt consolidation
Debt consolidation is a common reason people refinance their loans. Whether you have significant credit card debt or multiple student loans, you understand the pain of paying off and keeping track of multiple loans. Consolidating your debt through refinancing streamlines the process so you only have to worry about one payment a month instead of several.
4. Accelerate loan repayment
Although some people may refinance their loans so that they have more time to pay them off, others refinance their home loans to pay them off faster. Converting your mortgage from a 30-year term to a 15-year term ensures that you will pay off your loan and own your home faster. Keep in mind that this method may increase your monthly payment – weigh your options and decide what is most important to you.
5. Switch lenders
If you are not satisfied with your current lender, then refinancing your loan gives you the opportunity to switch to another lender with better service. Many student loan lenders, for example, have online payment gateways that are more efficient than their competitors and have amazing customer service support. Convenience alone may be enough for a person to switch from a traditional lender to a more modern option.
Refinancing your loans can take an enormous amount of stress off your shoulders. Refinancing can also prove to be more cost effective in the long run, more efficient, and generally better for your current situation. If you are considering obtaining a refinance loan in Ohio, contact our team today with any questions you may have. We’ve been helping Ohio families and individuals master their finances since 2004 and we’re eager to help you, too.
Are you ready to take control of your money? Apply for a refinance loan today!