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Student Loan Refinancing Just Got Crazy Cheaper

Student loan refinancing rates have dropped even lower.

Here’s why and what you need to know.

Student Loan Refinancing: Rates Drop Even Further

Student loan refinance rates now have dropped to as low as 2.01%.

Why? The Federal Reserve cut interest rates, and lenders have reduced student loan refinancing rates to a near-term low. That’s great news for student loan borrowers who want to refinance student loans, get a lower interest rate and save money.

Here’s how to refinance your student loans.

Student Loan Refinancing: Should I Refinance Student Loans?

Today In: Money

Many people ask: Should I refinance student loans?

If you want to save money and pay off student loans faster, student loan refinance is an effective tool. When you refinance student loans, you exchange your current student loans for a new, single student loan with a lower interest rate.

Student loan refinancing has several advantages, including:

  • lower interest rate
  • single monthly payment
  • fixed or variable interest rate
  • flexible 5-20 year loan repayment term
  • one student loan servicer
  • pay off your student loans faster
  • save money

Student Loan Refinancing: How To Apply

If you want to know how to refinance student loans, it’s important to understand how to apply. The good news: the process is simple.

Step 1: Find the best interest rate

There are multiple trusted, online lenders that can refinance student loans with low interest rates and easy, online applications. Compare the best interest rates and loan terms. Most borrowers will refinance student loans with the lender who gives them the lowest interest rate. Most lenders allow you to check your preliminary interest rate online for free within two to three minutes without any impact to your credit score.

Step 2: Use a student loan refinancing calculator 

This free student loan refinance calculator shows you how much money you can save when you refinance student loans.

For example, let’s assume you have a $100,000 student loan at an 8% interest rate and 10-year repayment term. If you refinance that student loan with a 3.0% interest rate and 10-year repayment term, you would lower your monthly payment by $248 and save $29,720 in total payments. If you are a doctor, dentist or pharmacist with a large student loan balance, your savings may be even higher.

Step 3: Apply online

You can apply online for student loan refinancing. Most applications take 10-15 minutes to complete. You can also upload any supporting documents, which may include a copy of your driver’s license, transcripts, recent paystubs or job offer letter.

Student Loan Refinance: Key Questions

1. Do I qualify for student loan refinance?

While each lender has its own underwriting criteria, the best candidates for student loan refinancing typically have the following:

  • A credit score of 65o or higher
  • Current employment or a written job offer
  • Stable, recurring monthly income
  • A low debt-to-income ratio
  • No defaults on their student loans

What if you don’t satisfy these requirements? You should apply with a co-signer with strong credit and income. Your co-signer can help you get approved for student loan refinancing and help you receive a lower interest rate. Your co-signer will be equally financially responsible for the student loan. However, some lenders allow the co-signer to be released from any financial obligations after meeting certain requirements.

You can maximize your chances of getting approved to refinance student loans by applying to multiple lenders. Each lender makes a separate decision, so getting rejected from one lender does not negatively impact your chances with another lender.

2. Can you refinance Parent PLUS Loans?

Yes. Parent PLUS Loans carry relatively high interest rates, so refinancing Parent PLUS Loans is a smart way to lower your interest rate and save money.

3. What are the fees to refinance student loans?

There are no fees to refinance your student loans. If any lender tries to charge you a fee to refinance student loans, find another lender. There are also no prepayment penalties, so you can pay off student loans anytime with no charge.

4. Should I refinance my federal student loans?

You should not refinance federal student loans if:

  • you plan to pursue public service loan forgiveness or an income-driven repayment plan
  • you want access to deferral or forbearance options

You can still refinance your private student loans and leave your federal student loans outstanding. Most lenders today offer employment protection if you lose your job and want to pause your monthly payments.

5. When should I refinance student loans? How often can I refinance student loans?

When should you refinance student loans? The answer: you should refinance student loans whenever you qualify for a lower interest rate. If you can get a lower interest rate and save more money, then it may be a smart financial move.

How often can you refinance student loans? There are no fees to apply, no fees to refinance, and no limit to how often you can refinance student loans.

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Zack Friedman is the bestselling author of the highly-anticipated, blockbuster book, The Lemonade Life: How To Fuel Success, Create Happiness, and Conquer Anything. Zack is the founder and chief executive officer of Make Lemonade, a leading personal finance company that empowers you to live a better financial life. He is an in-demand speaker and has inspired millions through his powerful insights. Previously, he was chief financial officer of an international energy company, a hedge fund investor, and worked at Blackstone, Morgan Stanley, and the White House. Zack holds degrees from Harvard, Wharton, Columbia, and Johns Hopkins.

Source: Student Loan Refinancing Just Got Crazy Cheaper

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5.🔸Sofi ($100 Bonus): sofi.com/share/2345532 4.🔸Splash Financial ($300 Bonus for $30k refi or more): https://splash-financial.sjv.io/X5YXo 3.🔸Commonbond: http://bit.ly/CommonBondTF 2.🔸LendKey ($200 Bonus): https://mbsy.co/v9bGH 1.🔸Earnest: https://earnest.pxf.io/1KGY9 *Keep in mind that any bonus can change at any time* We go over the top 5 Student Loan Refinance Companies. As well as talk about a few important things to know before doing a student loan refinance. ●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●● 🔔SUBSCRIBE ➡ ​https://www.youtube.com/trufinancials…… ●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●● Disclaimer: I am not a CPA, attorney, or financial advisor and the information in these videos shall not be construed as tax, legal, or financial advice from a qualified perspective. If you need such advice, please contact a qualified CPA, attorney, or financial advisor. Some of the links are affiliate links. Which means if you click on some of the links I will make a small commission at no additional cost to you. This helps keep me making videos and providing value. Thank you for your support!

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5 Secrets To Refinance Your Student Loans – Zack Friedman

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With interest rates rising, there’s no better time to refinance student loans.

Student loan refinancing enables to you combine your existing federal and private student loans into a new, single student loan with a lower interest rate. As a result, you can lower your monthly payment and save significantly on interest costs, which can help you pay off your student loans faster.

(You can see how much you can save through refinancing with this free student loan refinancing calculator).

Here are 5 secrets to get approved to refinance your student loans:

1. Have a strong credit score

Lenders want to refinance student loans for borrowers with a history of financial responsibility.

One way they measure financial responsibility is through your credit score (or its underlying components). To increase your credit score, make sure that you meet your financial obligations and have a history of on-time payments. Don’t skip any payments and minimize your total debt as well as your credit card utilization.

If you don’t have a strong credit score, the good news is you can apply with a qualified co-signer, which can increase your chances for approval.

Insider Tip: Aim for a credit score of 700 or higher. However, lenders will refinance student loans for borrowers with credit scores starting at about 680.

2. Have a strong income

In addition to a strong credit score, student loan lenders want to ensure that you have stable and recurring income to repay your student loans.

How do you know if you have enough income to get approved?

Review your monthly after-tax income. When you subtract your monthly student loan and other debt payments, does a sufficient amount of income remain for other essential living expenses?

Insider Tip: If you do not have sufficient income after making student loan payments, you can increase your chances for approval with a qualified co-signer who has a strong monthly income.

3. Have no or limited other debt

Student loan lenders will evaluate all your debt – not just your student loan debt.

If you have credit card debt, mortgage debt or auto debt, lenders will sum all your debt payments together to understand your total debt obligations each month. The lower your monthly debt payments relative to your income, the better.

Insider Tip: This free lump-sum extra payment calculator can show you how much money can save by paying off some of your debt with a one-time payment. Pay off some of your debt obligations before applying to refinance student loans.

4. Have a relatively small debt-to-income ratio

Student loan lenders are interested in the relationship between your monthly income and your monthly debt obligations, which is known as your debt-to-income ratio.

For example, if you have $10,000 of monthly income and $3,000 of monthly debt expenses, then your debt-to-income ratio is 30%.

Insider Tip: The lower your debt-to-income ratio, the better. You can improve your debt-to-income ratio by increasing income or decreasing debt (or both).

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5. Be employed

It’s best to be employed with 1-2 years of work experience to maximize your chances of being approved for student loan refinance.

However, if you have a written job offer when you apply to refinance student loans (even if you are in graduate school or residency, for example), you can still get approved for student loan refinancing.

If you are unemployed or do not have stable, recurring income, it will be difficult to be approved for student loan refinancing.

Insider Tip: If you are unemployed or underemployed, your best option is to apply with a qualified co-signer with a strong credit profile.

Here’s a bonus tip: Apply to refinance your student loans with multiple lenders at once, not just one. First, it will only count as a single credit inquiry, and second, you will also maximize your changes for approval.

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