If you’re eager to launch your new business but finances are holding you back, you’re not alone. Funding is one of the most common barriers to starting a business. As a matter of fact, most entrepreneurs have to get creative to launch their ventures. Crowdfunding, borrowing from friends and family, and applying for SBA loans are common approaches, but there are other options, as well. One avenue that many people don’t consider is refinancing their student loans.
Facts About Student Loans
Student loan balances have increased by nearly 150 percent in the last decade. As a matter of fact, Americans owed about $1.4 trillion dollars in student loan debt as of August 2017. Yes, that’s trillion, with a “t.”
The median student loan debt was around $17,000, but many Americans owe much more than that. As a matter of fact, some Americans owe as much as $40,000 in student loans, or more.
Most of these debtors are young people. According to the Pew Research Center, 53% of young adults who have a bachelor’s degree or higher also have student loan debt.
That debt is crushing peoples’ dreams. Young adults who are saddled with student loan debt often work at two jobs and still struggle financially. They delay getting married and starting a family. Naturally, their own student loans make it more difficult for them to plan for their children’s higher education.
Furthermore, young adults with an entrepreneurial bent may also delay starting their own business. They fear the risks inherent in being their own boss.
Is There a Solution?
Student loan debt in the United States is such a stumbling block that some even refer to it as a crisis. Complicating the problem are low wages and limited repayment options. Some political leaders have proposed making tuition free at state schools and colleges. However, if you’re a young graduate who is already making monthly payments on your existing student loans, this option won’t be of much help to you.
However, there is a ray of hope, but only if you take matters into your own hands.
If monthly payments on your student loans are holding you back, refinancing might be an option for you. You could refinance at a lower interest rate but keep the same repayment term, for example. If you do, you might be able to lower your monthly payments to a figure that feels more comfortable to you. If student loan payments take a big chunk of your monthly expenses, lowering that payment might be all you need to feel ready for the risks of entrepreneurship.
See If You Qualify
If you have a high credit rating, chances are good that refinancing will help you. While the federal government doesn’t make a distinction in rates between high-risk and low-risk borrowers, independent lenders do. They can often offer you a much lower rate if you have a good credit history.
The people at Health IQ have put together a quiz to help you assess how much you know about refinancing your student loan debt. Give the quiz a try to see if refinancing could help you get closer to your dreams of entrepreneurship.