Student loan refinancing just got ridiculously cheaper

Do you want to refinance your student loans? Now might be the right time.

Here’s why and what you need to know.

Student loan refinancing: rates fall again

Student loan refinancing rates have now fallen to 2.06%.

Why? The Federal Reserve has cut interest rates and lenders have lowered student loan refinancing rates to a near-term low. This is great news for student loan borrowers who want to refinance their student loans, get a lower interest rate, and save money.

Here’s how to refinance your student loans.

Student loan refinancing: should I refinance a student loan?

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

There are several advantages to refinancing a student loan, including:

  • lower interest rate
  • single monthly payment
  • fixed or variable interest rate
  • flexible loan repayment period of 5 to 20 years
  • single student loan manager
  • pay off your student loans faster
  • to 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 several trusted online lenders who can refinance student loans with low interest rates and easy online applications. Compare the best interest rates and loan terms. Most borrowers will refinance their student loans with the lender who offers them the lowest interest rates. Most lenders allow you to check your preliminary interest rate online for free within two to three minutes without impacting your credit score.

Step 2: Use a Student Loan Refinance Calculator

Once you know your new interest rate, it’s time to compare it to your current student loan rate. This free student loan refinance calculator can show how much money you can save with student loan refinancing.

For example, suppose you have a $ 100,000 student loan with an interest rate of 7% and a repayment term of 10 years. If you refinance this student loan with an interest rate of 3.0% and a 10-year repayment term, you’ll reduce your monthly payment by $ 195 and save $ 23,457 in total payments. If you’re a doctor, dentist, or pharmacist with a large student loan balance, your savings can be even greater.

Step 3: Apply online

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

Student loan refinancing: how to get approved

What’s The Best Way To Get Approved For A Student Loan Refinance?

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

  • A credit score of 65o or higher
  • Current job or written job offer
  • Stable and recurring monthly income
  • A low debt ratio
  • No default on their student loans

What if you don’t match this profile? You can apply with a co-signer who meets these criteria. Your co-signer can help you get approval to refinance your student loan and earn a lower interest rate. Your co-signer will also be financially responsible for the student loan. However, some lenders allow the co-signer to be released from any financial obligation once certain requirements are met.

Student loan refinancing: key questions

1. Can I apply to multiple student loan refinance lenders?

Yes. You can maximize your chances of getting approved by applying to multiple lenders. Each lender makes a separate decision, so rejecting one lender doesn’t negatively impact your odds 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. How much does it cost to refinance student loans?

There is no charge for refinancing your student loans. If a lender tries to charge you a fee for refinancing student loans, find another lender. There are also no prepayment penalties, so you can pay off your student loans quickly.

4. Should I refinance my federal student loans?

You should not refinance federal student loans if:

  • you are considering applying for a utility loan discount or income-based repayment plan
  • you want to access the deferral or abstention options

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

5. I already have a low interest rate on my student loans. Should I refinance my student loans?

Yes. If you can get a lower interest rate and save more money, it can be a smart financial decision. There are no fees and no limit to the number of times you can refinance student loans.

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