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StudentLoanQuestion

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$17,000 Remaining Student Loan Debt - Continue Paying @ 6.55% or Re-Finance and Take Credit Hit?
Hello; I have approx. $17,000 left in Federal Student Loan Debt. I currently use Direct Debit and pay approximately $100 more/mo than the minimum. I was considering re-financing this amount to take advantage of a lower interest rate, and increase my monthly payments to pay the loan off faster. Considering that an application for a re-fi would result in a hard hit and affect my credit, are there pro's/con's to either approach? The current remaining term on the loan is 64 months. I would also be willing to increase the monthly payment.

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HI StudentLoanQuestion, without knowing some more details (the new Interest Rate and terms) it is hard to quantify the benefit to you (total interest amount reduction over the life of the loan, how much faster you would clear the balance, etc.). However, provided that you have this information on hand and know for a fact that it would save you money, I suggest pursuing the refinance. The hard credit inquiry for the refi will stay on your report for 2 years (but only affect your score for 1) - this is a small price in order to get rid of your stuent loans faster. Additionally, because your student loan balance will go down faster, you will eventually see your score rise.

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