Student loan refinancing just got insanely cheap
Student loan refinancing rates have fallen even lower.
Here’s why and what you need to know.
Student loan refinancing: rates drop even more
Student loan refinancing rates have now fallen to 1.9% for the variable and 3.1% for the fixed.
What is driving these low rates? The Federal Reserve cut interest rates three times last year, and lenders cut student loan refinancing rates to a near-term low. This is good news for student loan borrowers who want a lower interest rate, save money, and pay off debt faster.
Here’s how to refinance your student loans.
Student loan refinancing: should I refinance a student loan?
Many borrowers ask: Should I refinance student loans? 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. Refinancing a student loan has several advantages, including a lower interest rate, a single monthly payment, a fixed or variable interest rate, a flexible loan repayment term of 5 to 20 years, a loan service student, pay off your student loans faster and save money.
Student loan refinancing: how to apply
If you want to know how to refinance student loans, here’s what to do:
Step 1: Compare the rates
There are several online lenders who can refinance student loans with low interest rates. Compare the best loan rates and terms. Most lenders allow you to check your new interest rate online for free within two to three minutes without impacting your credit score.
Step 2: Use a Student Loan Refinance Calculator
This student loan refinance calculator shows you how much money you can save when you refinance student loans.
For example, suppose you have $ 70,000 in student loans with an interest rate of 8.0% 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 $ 173 and save $ 20,804 in total payments. If you’re a doctor, dentist, or pharmacist with a larger student loan balance, your savings can be even greater.
Step 3: Apply online
You can apply online to refinance student loans in 10 to 15 minutes. You can also upload any supporting documents, which may include a copy of your driver’s license or recent pay stubs to show your income.
Refinance student loans: key questions
1. Am I eligible for student loan refinancing?
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 history of student loan defaults
If you have bad credit or do not meet these requirements, you can apply with a co-signer with good credit and good income. Your co-signer can help you get approval to refinance your student loan and earn a lower interest rate. While your co-signer will also be financially responsible, some lenders will release your co-signer from any financial responsibility after you make a minimum number of monthly payments on time. Apply to multiple lenders to increase your chances of getting approved. Each lender makes a separate underwriting decision, so rejection from one lender does not affect your odds with another lender.
2. Can You Refinance Parent PLUS Loans?
Yes, Parent PLUS loans have relatively high interest rates, so refinancing can lower your interest rate and save money.
3. Should I consolidate or refinance my student loans?
If you want compare student loan refinancing and consolidation, then you will learn that only refinancing a student loan lowers your interest rate and saves you money.
4. Should I refinance my federal student loans?
If you want a lower interest rate then yes you can refinance your federal student loans. You should not refinance federal student loans if you plan to apply for a utility loan forgiveness, income-based repayment plan, or deferral or forbearance options. You can still refinance your private student loans and leave your federal student loans in arrears. If you’re refinancing your federal student loans, the good news is that most lenders today allow you to withhold payments if you lose your job.
5. How often can I refinance student loans?
When Should I Refinance Student Loans? The answer: you should refinance your student loans whenever you qualify for a lower interest rate. There is no limit to how often you can refinance student loans. There are also no fees to apply and no fees for prepaying student loans. For example, suppose you just refinanced your student loans in the past year or even months. If you can get a lower interest rate today, refinancing a student loan can save you more money.