Over the past few years, your credit may have improved, or new competitors might be eager to lend at more attractive rates. If your loans have variable rates, you may be caught by surprise if rates skyrocket in the future.
However, variable rates often start lower than fixed rates, and rates might not actually move much — only time will tell.
Before you stretch out those payments, do some quick loan calculations and compare the costs. Especially if you originally borrowed with a private lender, there may be an opportunity to cut your borrowing costs.
To determine whether or not you have the ability to repay a new loan, private lenders use a debt to income ratio.
The less you pay towards debt every month (including credit cards and car payments), the better.
Higher costs are the biggest threat when refinancing private education loans.
In addition to application and closing costs, you might pay more interest over the life of your loan if you refinance.