Discharge of student loans received popularity in 1970's. Many individuals would file for bankruptcy shortly after completing their expensive education. The goal was to discharge these student loans before they began earning money.

The wording of exception of a “hardship discharge” and what is considered a student loan has recently been broadened so that most student loans made by nonprofit groups or government are now considered student loans. This only applies to actual student and not a co-signor. So a parent signing for one of their children could not have this debt discharged. In addition, this exception does not include debts to an educational institution for tuition. If loan is nondischargeable then petition on loan is also not going to be discharged.

Maybe you want to consolidate your debts so you have better control of your money.

Perhaps a lender is urging you to refinance because interest rates are low, and he has a too-good-to-be-true deal that will shorten your current loan’s term.

Here are 6 essential questions to ask yourself before making decision to refinance.

1. What’s My Motive—and What Will It Cost Me? Before you even consider a refinance, ask yourself this fundamental question: “Why do I need it?”

“Many times, people take out a new, larger loan to pay off credit cards, automobiles or even to purchase another home,” says Norm Bour, host of nationally syndicated U.S. radio program The Real Estate & Finance Show, and an experienced mortgage lender. “Sometimes they need money to do home improvements or renovations.”

If, however, you want to lower your current loan payments or switch to a different type of loan, you must calculate benefits before going re-fi route.

“If someone is going from a fixed loan to another fixed loan, my general benchmark is to see a 1% reduction of interest rates to justify it,” says Bour, who also teaches money-management classes in Southern California. “Sometimes borrower goes from a fixed-rate loan to an adjustable to lower his payments. Sometimes he does just opposite—maybe to get away from interest-rate volatility. These are very personal decisions, specific to each individual client.”

2. How Long Will I Be in Property? You may already know—or suspect—that you will not live in your current home beyond a certain timeframe (perhaps 5 years). If this is case, why would you even consider a 30-year loan?

“Sometimes, an adjustable-rate loan or a ‘hybrid’—say, a 5-year fixed, then converting to an adjustable—makes most sense,” Bour says. 3. What Am I Worth? Do your homework before trying to qualify for a new loan. You should know:

• The approximate market value of your property, as “loan to value (LTV) is one of primary factors that control interest rate,” Bour says.

• Your credit score, which will affect your overall ability to secure a loan, as well as interest rates offered and options available to you.