Questions: Choose the best answer to the following question. Explain your reasoning with one or more complete sentences. You are currently paying off a student loan with an interest rate of 10% and a monthly payment of 380. You are offered the chance to refinance the remaining balance with a new 10-year loan with an interest rate of 6% that will give you significantly lower monthly payment. Is refinancing this way a good idea? Choose the correct answer below. A. It's always a good idea. A borrower should always seek the lowest interest rate possible. B. It may or may not be a good idea, depending on closing costs and how many years are remaining in your current loan term. Refinancing would reset the loan term to 10 years. C. It may or may not be a good idea, depending on closing costs and how many years are remaining in your current loan term. It's only a good idea if closing costs are minimal D. It's a good idea if it lowers your monthly payment by at least 100. The costs of refinancing can be high, so it's not worth it if the monthly payment won't change by a lot. E. It is always a good idea because you would save 4% each month. F. It's a good idea if it lowers your monthly payment by at least 100. Then if you pay the 100 anyway, you can pay off the loan sooner.

Transcript text: Choose the best answer to the following question. Explain your reasoning with one or more complete sentences. You are currently paying off a student loan with an interest rate of $10 \%$ and a monthly payment of $\$ 380$. You are offered the chance to refinance the remaining balance with a new 10 -year loan with an interest rate of $6 \%$ that will give you significantly lower monthly payment. Is refinancing this way a good idea? Choose the correct answer below. A. It's always a good idea. A borrower should always seek the lowest interest rate possible. B. It may or may not be a good idea, depending on closing costs and how many years are remaining in your current loan term. Refinancing would reset the loan term to 10 years. C. It may or may not be a good idea, depending on closing costs and how many years are remaining in your current loan term. It's only a good idea if closing costs are minimal D. It's a good idea if it lowers your monthly payment by at least $\$ 100$. The costs of refinancing can be high, so it's not worth it if the monthly payment won't change by a lot. E. It is always a good idea because you would save $4 \%$ each month. F. It's a good idea if it lowers your monthly payment by at least $\$ 100$. Then if you pay the $\$ 100$ anyway, you can pay off the loan sooner.