While refinancing a student loan may gain you if youвЂ™re getting a significantly better deal on a personal student loan from another personal lender, you can find drawbacks moving federal or provincial loans to an exclusive loan provider, either through refinancing or debt consolidation reduction:
- You will owe a bank, maybe perhaps not the federal 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. It is possible to find out more about these scheduled programs as well as your eligibility in the federal Government of Canada website.
- You will lose taxation deductions. Interest on student education loans is taxation deductible, promoting yearly cost savings that would not be around with a mortgage.
- You shall be charged a greater rate of interest. You could just like the concept of handling just one single payment, but on your student loan if you have poor (or no) credit history, the bankвЂ™s interest rate and fees will likely be higher than the interest rate the government is charging you. Continue reading