When you choose to refinance your Columbia Business School (CBS) loan, you essentially trade in your old loan for a fresh loan with a new interest rate and term. You may elect to receive your new loan from the same financial institution that held your old student loan or refinance your loan with a new lender. You will then use your new loan to pay off your existing loan.
Benefits of Refinancing
Refinancing is associated with a range of benefits, including:
Lower Interest Rates
If the interest rate on your current student loan is higher than that associated with other loans, refinancing may be an attractive option. A small change in the interest rate of your student loan could have a positive effect on your monthly loan payments.
Improved Loan Periods
A low interest rate should enable you to not only lower your monthly payments but also shorten the length of your loan. By shortening your loan term, you could save yourself hundreds of dollars in interest payments.
As many financial institutions are offering loans with low rates of interest, you will be in the perfect position to use your negotiating skills to acquire a great deal. Under federal law, your chosen lender must provide you with an estimate of the amount of money they will charge you to complete your refinance. Following receiving your estimate, you may be able to bargain with your lender to eliminate or reduce fees such as document preparation expenses, which can add to the cost of your loan.
If you have several student loans, CBS refinancing will enable you to consolidate, or combine, your loans into a single loan. Following consolidating your loans, you will be expected to meet the cost of only one monthly loan repayment. You may also save money by paying a single low interest rate on your entire loan amount.
Reviewing Your Suitability to Loan Refinancing
If you are considering refinancing your loans, you will need to review the steps below to determine whether refinancing really is the best option for your needs.
Step 1: Review your current loan
Review your loan documents or contact your lender to determine the balance, interest rate and term on your current student loan.
Step 2: Determine your current monthly repayment amounts
Determine the exact amount of money you are paying towards your loan each month.
Step 3: Determine whether you would benefit from consolidation
If you have several loans, use a loan consolidation calculator to decide whether you would be better off consolidating your loans.
Step 4: Decide whether you would benefit from CBS refinancing
Compare your current monthly payments to the monthly payments you would have to pay out if you refinanced your loan. Ask yourself whether refinancing would decrease your monthly payments and save you money in the long run.
If you decide that CBS refinancing is right for you, you will need to check that you meet the qualifying criteria for a new loan. If you have a bad credit history, your lender may require you to raise your credit score before granting you a new loan.