Do you have a boatload of student debt you're trying to get rid of?

Financial institutions have historically been reluctant to refinance college loans, which, unlike mortgages, are essentially unsecured loans. Often, lenders have not felt comfortable modifying a loan they feel may default in the near future.

Over the past year, the government has been encouraging lenders to step up student loan refinancing, which can help borrowers lower their interest rates and monthly payments. Several institutions have begun offering such services, such as Wells Fargo and RBS Citizens Financial, in addition to some smaller lenders and credit unions.

Refinancing isn't for everyone. However, loan consolidation and obtaining a lower interest rate are the prime motivators for refinancing, and, in some cases, could save a borrower hundreds of dollars each month. Here's how to determine if refinancing your student loan is right for you.

Consolidating multiple loans: check your options
Combining several loans into one monthly payment is a real convenience, but there may be other options available than refinancing. In the case of federal loans, for example, a program already exists for multiple loan consolidation, which can also spread out loan repayment for up to 30 years.

The Department of Education warns borrowers to carefully review the terms of their loans, however, as the new loan won't include any previously agreed upon benefits that may have accompanied some of the original loans. The same warning goes with a private refinance, of course.

You will also want to check on prepayment terms. While federal loan consolidation allows prepayment at any time, this may not be true with private lenders.

Check interest rates carefully
Getting a lower interest rate is likely high on your priority list, and this is where a private refinancing can be the most helpful. Although you can probably consolidate your federal loans through the government, the interest rate will be fixed at the weighted average of the group of loans being combined, rounded up to the nearest one-eighth of a percent. In the case of older loans, interest rates could top 12%.

Unfortunately, not all refinancing products are available for federal loans. For example, RBS Citizens offers fixed-rate consolidation loans starting at 5.24%, but only for private, not federal, student loans. Social Finance, a company that refinances loans through private investors, may be an option for those with federal loans they want to consolidate into one private loan.

As the Consumer Finance Protection Bureau points out, refinancing may change your tax status, too. You'll need to check with the lender to see if the new loan will allow you to take the student loan interest tax deduction, if you had previously been doing so.

Just the beginning
Though choices are still limited, chances are excellent that other lenders will also begin offering student loan refinance programs. Banks are beginning to see the benefit of serving student loan borrowers with good credit, knowing that they will be able to sell additional services to them in the future.

States are beginning to pitch their own services as well. Wisconsin has a bill pending that will help overwhelmed students refinance their debt. Called Higher Ed, Lower Debt, the legislation will establish a Wisconsin Student Loan Refinancing Authority that will assist students with refinance options, while allowing borrowers to deduct the interest paid on their new loans from their state taxes.

A small start, perhaps -- but it's beginning to look like 2014 may be the year that options to clean up the smoldering pile of existing student debt finally begin to materialize.