3 times you should consider refinancing your student loans, according to a financial planner

• Refinancing student loans means taking out a new loan to replace your old ones, usually at a lower interest rate.
• If you have private loans with a high interest rate, if your credit score has increased since you took out your last loans, or if you need a lower monthly payment now, you might want to look at refinancing.
• However, refinancing may lengthen the number of years you make payment on your loans, meaning you'll pay more overall.
• If you have federal loans, note that refinancing will turn them into private loans, losing benefits like loan forgiveness and income-driven repayment plans.
• A financial planner can help make a plan to tackle your debt. Find one with SmartAsset's free tool »

If you have student loans, you've probably wondered whether or not you should refinance them.

Maybe you've heard that's a great way to save money. Or perhaps you know there are downsides to going this route that make the potential upside not worth as much, especially if you have federal loans.

Which is true? Both can be, so the right answer for you often depends on your situation and what you hope to accomplish through a refinance.

Here's what to think about before you decide if it makes sense to refinance student loans - or not.

1. If you have private loans with a high interest rate

The goal of refinancing your loans is to secure a lower interest rate than what you have on your original loan. The higher your current rate, the more you might be able to save by refinancing to a lower rate.

Any time you have a very high interest rate, it's worth looking into your options for refinancing. But it could be an easier decision when you have private loans, as you don't have to worry about losing borrower protections that apply to federal loans.

2. If your own credit score has changed dramatically

Another time when it might make sense to refinance? If your credit is significantly better now than what it was when you initially took out your student loans.

Even if interest rates haven't changed too much, the rate you can get might be much better than the original rate you received.

3. If you need a lower monthly payment (even if it means paying more in the long run)

Refinancing your student loans to a lower interest rate usually means a lower monthly payment. But to refinance, a lender originates a new loan to pay off your existing debt.

That new loan is what has the lower interest rate and what you will pay off going forward - and it has its own loan term. When you refinance, you essentially restart the clock on your payment period.

If you keep your original loan and make all payments in full and on time, for example, you might pay it off in 10 years.

But if you refinance, you'll likely be expanding the total amount of time that you have the debt and work to pay it off: however long you already spent paying off your original loan, and whatever the length of the term of your new loan after refinancing.

And the longer you extend the total amount of time you pay off your loan, the more money you'll pay when all is said and done.

This trade-off might be worth it if your priority is to lower your monthly payment now, to free up cash to use for other needs or goals. But make sure you do the math to understand how much refinancing could save - or cost - you over the long run.

A word of caution if you have federal loans

Anytime you consider refinancing federal student loans, it's worth pausing to consider what you're giving up. Federal student loans come with a number of borrower protections and benefits, but refinancing will turn federal loans into private ones.

That means you'll no longer have access to:

• Repayment programs
• Forgiveness programs
• More generous loan discharge options

If these are benefits you need or may want to use in the future, refinancing your federal loans might not be the best option.

It's always worth at least looking into the possibility of refinancing, because it can help you save money or make your loan payments more manageable. But it's not always the best choice or right answer.

If you want to refinance, start by running the actual numbers that apply to your situation to see the difference that refinancing could make … or not.

Eric Roberge, CFP, is the founder of Beyond Your Hammock.

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