Kiplinger

Smart Ways to Manage Your Student Loans

Blair Green Thielemier graduated in 2011 from the University of Arkansas for Medical Sciences with a doctorate of pharmacy and $65,000 in federal student loans. She diligently paid more than her required payments every month, but after four years her balance still stood at $35,000-primarily because a large portion of her payments went toward interest. Thielemier, 31, wanted to pay off her loans faster, so she decided to refinance with CommonBond, a private lender, which offered to reduce her 6.3% fixed rate to a roughly 2% variable rate. With more of her payments going toward principal, she was able to pay off the balance in less than two years.

Refinancing your student loans has advantages, but it also poses risks. You can streamline the repayment process by combining your loans into a single monthly payment. You may be able to lower your monthly payments by extending the repayment schedule. And some options, such as the one Thielemier chose, can lower your overall interest rate. But plans that make your payments more affordable typically increase the

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