If there is one obstacle that prevents millions of parents from investing is the burden of refinancing parent plus student loan. This loan usually weighs down parents preventing them from seizing new financial opportunities until they clear their debts. In fact in 2015, the federal reserve bank of New York pointed out that the average outstanding parent plus loan balance was $ 50, 000 per parent. So how can you get out from this debt? In this article, we are going to give you tips on how to refinance a parent plus student loan.
1. Consolidate your loan
Loan consolidation is not the right choice for everyone, but for some parents; this option can really work. Loan consolidation actually means that you group multiple smaller loans into one big one. Loan consolidation is a good option to take especially if you are also servicing other smaller loans. Having just one loan to service will make thing easier for you.
2. Get help from your employer
Some employers are usually willing to include parent plus student loan as part of your benefits package. This benefits package is generally similar to health care benefit or signing bonuses. Most employers who assist their employees in repaying parent plus loan do it so as to reward their employees for their hard work. Bring up the idea to your boss and see how he/she will respond, in exchange for the parent plus loan repayment by your employer, you can offer incentives such us committing to stay on that particular job for a given period.
3. Choose the right repayment plan.
There are more than three repayment plans that you can choose from when you are refinancing your parent plus loan. Each repayment plan has its own pros and cons. You need to be very careful when choosing a repayment plan for this loan. Ensure that you choose a plan that corresponds to your financial ability.
4. Consider enrolling in auto debit
Enrolling in an auto debit means that your parent plus loan servicer will automatically make the deduction from your bank account each month. This option has several benefit to the parent because many lenders usually give a discount just for enrolling.
5. Reward yourself
Although paying off the loan is a reward in itself, learning to reward yourself after you have made substantial progress in loan repayment is certainly a good idea. By rewarding yourself, you will be able to motivate yourself a factor that will make you pay back the loan fast.