Refinance Your Student Loan
Student loan refinancing can help you consolidate your existing federal and private student loans into a single loan with a lower interest rate or a lower monthly payment.
What you need to know about Student Loan Refinance
What do I need to refinance my student loan?
To be able to refinance, you will typically need a minimum of $5,000 in loan debt, as well as a FICO score above 700. A stable income is a critical element.
If your credit rating is not so great, or your income isn’t as stable as a lender might desire, you can still refinance with a co-signer who does have those things.
What are the biggest reasons to refinance my student loan?
Refinancing your student loan means:
- Saving money.
- Paying off debt quicker.
- Having one loan to manage.
What are the biggest reasons NOT to refinance my student loan?
With refinancing paying off your federal and private loans, you could be giving up:
- Federal loan deferment.
- Federal loan forbearance.
- Federal loan income-based repayment plan.
- Federal student loan forgiveness programs.
How do I know if I’m eligible for refinancing?
CLICK HERE to head over to the application to get your personalized rate. You’ll fill out some information about your schooling, your finances, and your current residence.
No need to worry: a soft-credit inquiry won’t impact your credit score, and this two-minute application form will provide you with rate and payment estimates.
Is student loan refinancing right for me?
Whether or not you should refinance your student loans will completely depend on your personal needs and situation. We know you hate that answer. Here are some questions to consider to help you make the right choice: Are you trying to save money on your monthly payment? Are you trying to decrease the amount of loan payments you have? Are you trying to decrease how much you are paying in interest?
If you answered YES to these three questions, it could benefit you to explore your refinancing options. CLICK HERE to explore them further.
Frequently Asked Questions
What does refinancing your student loans mean?
Refinancing your student loans involves finding a new loan to replace one or more existing loans in order to lower your monthly payment, decrease the total cost of the loan, change your payment terms, and other potential financial benefits. In many cases, you can consolidate or refinance your student loans and save money.
What are the consequences of refinancing your student loans?
First of all, the biggest consequence of refinancing federal student loans is that you’re removing your safety net. Federal student loan borrowers are offered many repayment plan options that make paying back loans plausible: Income-Based (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE), among others. These plans are meant to help you pay off your student loans depending on your situation. For example, their IBR plan sets up a monthly payment plan based on your income. And if you’re a borrower who uses an income-driven plan to pay back federal student loans, you may also qualify for student loan forgiveness. Of course, there are advantages and drawbacks to every program, so you should draft a pros and cons list of each one to determine your best option.
What's the difference between federal and private student loans?
There are many differences between federal and private student loans. For starters, unlike fed student loans, private loans are credit-based loans that are issued by private banks. This means that interest rates may vary based on a borrower's credit-worthiness. It can also mean that you may need a co-signer on your application if you have bad credit to be approved for private student loans. After graduation and sometimes before, you may seek to consolidate your student loans to reduce your monthly payments or overall cost. Student loan forgiveness is in the news quite a bit lately, but we don’t recommend using that hope as a repayment strategy.
When should you refinance your student loans?
This depends on your situation. If you have student loans and want to save money on interest by refinancing, you need to first evaluate your current financial situation. What benefits and protections will you lose by refinancing? Confirm that the pros outweigh the cons before jumping ship. These savings can be worth it for some borrowers, but not all.
If you have private student loans, then student loan refinancing probably makes sense. Private student loans are more likely to have higher interest rates and don’t qualify for student loan forgiveness or federal repayment plans (Forbes).
However, if you’re considering refinancing your federal student loans, then please research what protections you will lose to determine if it’s worth the risk. For borrowers who have a steady job, heavy cash reserves, and can pay off their debt in a short period of time - refinancing may make more sense. As a result, their interest payments would lower so they can pay off their debt faster. CNBC demonstrates what makes student loan refinancing so successful through real stories, but they also make it clear that this can be a major risk for federal student loan borrowers.
If you have private student loans, then student loan refinancing probably makes sense. Private student loans are more likely to have higher interest rates and don’t qualify for student loan forgiveness or federal repayment plans (Forbes).
However, if you’re considering refinancing your federal student loans, then please research what protections you will lose to determine if it’s worth the risk. For borrowers who have a steady job, heavy cash reserves, and can pay off their debt in a short period of time - refinancing may make more sense. As a result, their interest payments would lower so they can pay off their debt faster. CNBC demonstrates what makes student loan refinancing so successful through real stories, but they also make it clear that this can be a major risk for federal student loan borrowers.
What's the best place to refinance your student loans?
The best student loan refinancing option will depend on the borrowers’ specific needs and financial situation. We recommend completing an application with us and get your customized offers from multiple lenders.
Who offers the best student loan refinance rates?
We recommend that you compare your refinancing options in order to find the best student loan refinance rates. Some of the criterion that will impact your rate are your credit score, prevailing market rates, the school you attended, and your employment situation, among others.
What are the best student loan refinance companies?
To help you navigate the large amount of companies offering student loan refinancing, we strive to add more partners in our network. You may access to our partners with qualified offers once complete the applicaiton. We urge you to compare rates, repayment terms, and other variables that can have material impacts on your monthly payments and total cost.
Should you refinance your student loans?
Arguably the biggest consequence of refinancing federal student loans is that you may remove yourself from eligibility for existing federal student loan repayment programs, such as Income-Based (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE), among others.
These plans are meant to help you pay off your student loans according to your own financial situation. For example, the IBR plan allows you to create monthly payment plans based on your income.
Further, borrowers who use an income-driven plan to pay back federal student loans may also qualify for student loan forgiveness. Of course, there are advantages and drawbacks to every program, so you should carefully review and compare the top student loan refinance options to ensure you can find a better option for your financial situation.
These plans are meant to help you pay off your student loans according to your own financial situation. For example, the IBR plan allows you to create monthly payment plans based on your income.
Further, borrowers who use an income-driven plan to pay back federal student loans may also qualify for student loan forgiveness. Of course, there are advantages and drawbacks to every program, so you should carefully review and compare the top student loan refinance options to ensure you can find a better option for your financial situation.