Terms You Need To Know For Refinancing Your Student Loans

Terms You Need To Know For Refinancing Your Student Loans http://www.thefinancegirl.com An option for you graduates with student loans is to refinance your loan in order to combine your multiple loans into one payment with a lower interest rate, which overall lowers your premiums. This process can get confusing, especially when students have never refinanced a loan before. Here are terms for students to be familiar with before going through the refinancing process. 1. Private lender  A non-institutional, or non-bank, individual or company that loans money. Normally, students get loans from a bank. 2. Borrower  The individual receiving the loan. In other words, this would be the student or graduate. 3. Interest rate An annual percentage of the outstanding balance, charged by the lender (bank or individual). 4. Cosigner An individual who claims responsibility on payments if the borrower cannot. Many college students have to have a cosigner (usually a family member) in order to get a loan, since they have not built up enough credit or even have bad credit. 5. Deferment  To postpone. By refinancing a student loan, graduates are deferring their payments. 6. Loan forgiveness  A program created for students, which cancels all or some of their federal student loan balance. Having a loan forgiven means that the student is no longer responsible for the amount owed. 7. Premium  An additional charge. This is referring to interest on a loan, since it is an extra charge to a loan.