“Can spouses consolidate student loans?” is a common question among newlywed couples like you. Marriage may be based on an emotional connection, but in practical terms, it affects your financial situation too.
Now that you are starting a new life together, it’s understandable if you and your husband or wife are wondering if you can jointly refinance your debts to improve your finances. Read on to find out if you and your spouse can consolidate your student loans as a married couple.
Can Spouses Consolidate Student Loans?
The answer to this question is: Yes. Student loan refinancing is a viable option for couples like you, based on a Forbes article. In case you and your spouse both have student debts, you can refinance your student loans and consolidate them together.
Nevertheless, you need to be aware that not many creditors offer to refinance for married couples. On the bright side, many private refinancing lenders allow a husband or wife to co-sign the loan applications of their spouse.
These are the things that you should expect once you refinance your loans with your husband or wife:
Consolidation via financing enables you both to leverage the financial advantage of the partner with the higher income or credit score. It allows you to minimize your interest rate, reduce your monthly installments, and streamline your overall payments.
Shared Financial Responsibility
Take note that you and your partner will be sharing the responsibility for the loan payments once you become official co-signers under the new arrangement. In case one of you is not able to make the payments on time, the other person has to pay the lender.
Changes in Terms and Conditions
If you and your spouse have federal student loans, keep in mind that your new private student loan may have different terms than your government loans. Make sure to review and compare the conditions of both types of loans before you make a financial decision as a married couple.
On one hand, the private loan may have a lower interest rate compared to your federal loan. On the other hand, you may potentially lose the privileges that come with your federal student loan if you consolidate your loans with a private lender, according to the Federal Student Aid office.
Should Spouses Consolidate Student Loans?
Refinancing student loans as a married couple has both its advantages and disadvantages. The suitability of consolidation for you and your spouse depends on your individual and joint financial situation and personal preferences.
Be sure to carefully weigh the pros and cons of refinancing with your partner before you consolidate your federal student loans with a private refinancing lender. This arrangement will affect both of you so you need to make a mutual decision.
Marriage may initially be a matter of the heart, but to be realistic, it is a matter of the wallet too. Make smart financial choices to properly establish your finances as a newlywed couple.