ATLANTA - Refinancing your home to pay off student loans might be tempting, but Channel 2’s consumer adviser Clark Howard warns it’s not for everyone.
Clark says that Americans that borrowed money for college owe way too much. In fact, student loans amount to $1.4 trillion dollars of debt in the county, which is more than automobile loans and way more than credit cards.
It’s ugly, and a huge percent of people are in default, so there is a big pinch right now in the market place for you to take student loans out.
If you own a home with some equity in it, you can do a cash out refinance to pay off your student loans, but this is not a slam dunk.
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Howard said you should consider this: If you have any private student loans, that’s when you want to take them out through a home equity finance.
On the other hand, you don’t want to do a refinance of your home loan for federal student loans.
The payment system rules in your favor with federal student loans.
If you're having trouble paying off your federal student loans, you need to know your rights under the revised pay-as-you-earn rules.
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