While refinancing an educatonal loan may gain you if youвЂ™re getting an improved deal on a student that is private from another private loan provider, you can find drawbacks transferring federal or provincial loans to a personal lender, either through refinancing or debt consolidating:
- You will owe a bank, perhaps perhaps not the us government. In the event that you went to a bank lender if you keep the loan with the government, you may be eligible for student loan debt relief programs that wouldn’t be available to you. You are able to read more about these programs as well as your eligibility from the federal Government of Canada internet site.
- You will lose income tax deductions. Interest on student education loans is income tax deductible, providing you with savings that are annual would not be accessible with a financial loan.
- You will likely be charged a greater interest. You could just like the concept of handling only one payment, but when you yourself have bad (or no) credit rating, the bankвЂ™s interest and charges will probably be greater than the attention price the us government is charging you on your own education loan.
- You shall spend more interest as time passes. Continue reading “Drawbacks of Student Loan Refinancing or Using a Debt Consolidation Loan”