Novice question regarding interest and loans

[LizFK]

I'm trying to get some clarification here.  Is there a difference in total costs between refinancing a student loan and making additional payments/bulk payments over the life of the loan?

I was under the impression that even if you make extra payments, you are still paying the same additional interest on the original consolidated loan, and that by refinancing, the total amount of interest paid is lower.  I am thinking of refi student loans of $250000 to 4% or 4.5% (for 7 or 10 years respectively) with higher monthly payments and then make additional payments when able (bonuses, tax refunds, etc).  My husband wants to keep the consolidated loans at 4.65% for 30 years and just make higher payments towards that loan. 

Please help explain the total costs of the interest in both situations.  Thank you.

[rubybeth]

Yes, there would likely be a difference. You're just going to have to do the math. You don't mention how much extra your additional higher payments would be, so I can't do the math for you, but you just do one scenario with the extra payments on the current interest rate, and then another scenario on a lower interest rate.

Making extra payments reduces the principal on the loan, so the amount of interest you pay is lower.

A calculator like this might help: http://www.bankrate.com/calculators/college-planning/loan-calculator.aspx

[Outside the Box]

$250,000

10 yrs @ 4.5% = $60,915 interest paid, monthly payment $2,590.96
7 yrs @ 4% = $37,045 interest paid, monthly payment $3,417.20

30 yrs @ 4.65% = $214,074 interest paid, monthly payment $1,289.09
30 yrs @ 4.65% with monthly payment from 10 yr above = $63,683 interest paid, monthly payment $2,590.96
30 yrs @ 4.65% with monthly payment from 7 yr above = $44,554 interest paid, monthly payment $3,417.20

Looks like if you can afford the 7 year or 10 year, do that one (assuming no fees for closing the new loans). If not, making the extra payments on the 30 isn't a bad choice either.

Just run the numbers and decide.

[LizFK]

We have not decided how much more to pay on the existing consolidated loan, whether it would be just paying more money per month on the loan, or just paying down $50,000 more toward the existing loan.  The current payments are $1527 per month on consolidated and private combined.

The original loan of $280,000 was consolidated at 4.625% fixed, $235,000 of federal loans and $45,000 private