It can be challenging to compare graduate loan options, but the right information can help you make the best decision for your situation. Here are some helpful tips and questions to keep in mind as you compare various refinancing student loans option:


Review the interest rates


Interest rates are the cost of borrowing money, and they’re based on the creditworthiness of the borrower. The amount you pay in interest depends on what kind of loan you choose and how much you borrow—so it’s important to compare rates before deciding which lender to go with.

Loan terms can range from a few years to up to 30 years, so there’s no one-size-fits-all solution when it comes to comparing options. However, some general guidelines can help you make informed choices about how much debt is right for your situation. For example, Lantern by SoFi experts says, “Estimated APR includes all applicable fees as stated under the Truth in Lending Act.”

Compare the adjustable interest rates


The best way to compare adjustable interest rates is by taking a look at the cap and floor of each option. The cap is the highest rate that can be charged on your loan, and the floor is the lowest rate that can be charged on your loan. The difference between these two numbers will give you an idea of how volatile your payments might be in the future.

For example A $10,000 student loan with a 6% fixed interest rate has a 4% cap and 2% floor. This means that if inflation goes up by more than 2%, then borrower payments will increase by 4%. If inflation goes down by more than 2%, then borrower payments will decrease by 4%. In other words, borrowers are protected against large rises in inflation while also being protected against large falls in inflation (or even small ones).

Check for forbearance and deferment fees


Forbearance and deferment fees are charged by lenders when you use the options to postpone your loan payments temporarily. Forbearance is usually a temporary postponement of payments, while deferment is usually a temporary postponement of interest payments (but not principal). Therefore, both forbearance and deferment fees can be significant and should be considered before you apply for either option.

Ask about borrowing limits


Once you’ve decided on a lender, it’s time to ask about borrowing limits.

  • The smaller the amount of money you take out in this stage of your life, the easier it will be to pay back later with more lucrative job opportunities and higher earnings potential.
  • Ask if there are any flexible options for borrowing more money if necessary. If not, do some research into other lenders who offer such an option.
  • Ask how much you can borrow each month and how long it will take for them to pay off their loans in full (this information usually isn’t included on their website).

It can be difficult to know where to start if you’re just starting out in your career and are looking for a way to pay off your grad school loans. But with the right information and tools, you can make an informed decision about whether refinancing your graduate loan is the right option for you.