by Repayable | Sep 25, 2017 | Refinancing
Photo credit: Tim Gouw
Read this if you’re thinking about refinancing your student loans but are worried about the impact that could have on your credit score.
Estimated read time ~3 minutes.
Submitting formal applications for student loan refinancing shows up on your credit score. So what? How does refinancing actually impact your credit score? Read on to find out when refinancing can negatively impact your score.
The Basics of Your Credit Score
There are six main factors that determine your credit score; your on-time payments, credit usage, total accounts, average age of credit, derogatory marks, and credit inquiries.
Student loan refinancing applications count as credit inquiries and are factored in to your credit score and are reported for two years. What does this mean if you’re refinancing?
Where Student Loan Refinancing Comes In
Each formal student loan refinancing application will count as a credit inquiry.
Stick to rate estimators which run a soft credit check (which doesn’t affect your credit score) to shop for the lowest rates. When you’ve found the lowest rates select three or four companies to apply to and submit your applications in one batch.
Overall Impact
If you have a good-excellent credit score and use credit responsibly three or four inquiries from refinancing will have minimal impact on your credit score.
It is important to note that a rejected application for refinancing will also show up on your credit score. Plugging accurate information into the rate estimators found on refinancing company websites can help you understand if you’re qualified for refinancing.
In June I re-refinanced my student loans for a fixed rate of 3.37% through Earnest. I submitted formal applications to Earnest, CommonBond, and ElFi. My credit score has gone down by two points since then, which is an insignificant change.
If you’ve been avoiding refinancing because you’re worried it might tarnish your golden credit score, it’s time to take a closer look. The savings a low interest rate can land you are worth the minimal impact to your credit.
Have you refinanced? How did it impact your score? Let me know in the comments below or on the Repayable Facebook Page.
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by Repayable | Sep 18, 2017 | Refinancing
Photo credit: Ben White
Read this article if you’ve heard about refinancing but you think it’s too good to be true. Estimated read time ~4 min.
So you’ve heard about refinancing and you’re pretty sure it’s a super scam. Either you’re going to get your identity stolen Haha suckers, you can have my negative net worth! or you’re pretty sure you’ll lose some major federal benefit you need and get effed bad! Like c’mon what if someone like Bernie Sanders comes in and wipes the slate clean… then what?! Although I can’t be sure about a glorious white knight saving our country from student debt I can guide you to legitimate companies and help you avoid a scam and make sure you only refinance if it’s the right choice for you.
Red Flags
Any company that charges a fee for applying to refinance or actually refinancing your loan. There is never a fee for refinancing your student loans. If you see one it’s a scam.
Get What You Need
Make sure you get what you want out of the deal, that’s why you’re refinancing in the first place, for your own benefit! I have a full post on this topic you can read here. But here’s the quick list.
- If you’re counting on loan forgiveness then refinancing is not for you. It will make you ineligible for most types of loan forgiveness.
- Do you need loan forgiveness if you die or do you have enough life insurance to cover your debt? Some refinancing companies offer forgiveness some don’t.
- Do you need flexible monthly payments? If so refinancing may not be your best choice. The federal government has the most flexible payment options.
- Do you need periods of forbearance (i.e. paused payments but interest still accumulates)? Some refinancing companies offer forbearance and some don’t.
Legit Companies
Here’s a list of vetted companies. Some of the links are referral links which means I’ll get paid and you will too if you use that link and end up refinancing your loans.
Earnest Perks: $200 for you and $200 for me.
RISLA Perks: none
Laurel Road Perks: $250 for you and $250 for me.
SoFi Perks: $100 for you and $300 for me.
CommonBond Perks: $0 for you and $250 for me.
Elfi Perks: $100 for you and $400 for me.
So what’s holding you back from refinancing? What keeps you wondering if it’s the right choice for you? Leave a comment below or post on the Repayable Facebook Page. I’m here to help you make the smartest choice for your financial situation.
Additional Resources
How to Choose the Student Loan Benefits You Need
Sign-up for to get the Refinancing Master List as soon as it’s ready!
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by Repayable | Sep 11, 2017 | Money Matters, Refinancing
Image by: Mari Helin-Tuominen
Read this if you’re getting ready to refinance your student loans and want the process to go as quickly as possible. Estimated read time ~5 minutes.
Once you’ve figured out the benefits you need for refinancing, picked out the companies that offer those benefits, and chosen the three companies with the lowest interest rate estimates it’s time to submit formal applications.
Loan applications can be time consuming because they require a reasonable amount of supporting information. Here’s what you’ll need to get together for most refinancing companies. Prepping ahead means you can simply upload the documents and hit submit when you’re ready to apply!
1. Official identification
- This is typically a driver’s license, passport, or birth certificate
- Time-saving tip is to snap a pic of it with your cellphone for quick upload
2. Supporting income documents
- Recent pay stubs, often the last two paychecks or 30 days worth
- W2
- Time-saving tip is to go straight to the pay information on your employers website if they give you electronic access to your paystubs etc.
3. Documentation of assets
- 401k/IRA statements
- Bank statements
- Time-saving tip is to link your account information online if the refinancing company offers that option so you don’t have to provide statements
4. Documentation of other debts
- Loan balances and monthly payments for any other outstanding debt you may have like car loans, mortgage, and credit card debt
- Time-saving tip is to link up these online accounts to the refinancing company website to save time
5. Student Loan statements
- Most recent monthly statement that contains your name, account number, payoff amount, and payment mailing address
- 30 day payoff statement that contains your name, account number, payoff amount, and payment mailing address
6. A license to practice
- If you’re a licensed professional you may have to provide a copy of that license (i.e. pharmacist, physician, dentist, etc.) to the refinancing company to show that you’re eligible to practice in your state of employment
To Save Time Organize
- Put all this documentation in a folder you can quickly and easily access.
Here’s to a stress-free application process because you’ve got it together! When you refinance let me know how it goes. What did you do to expedite each application? Comment below or on the Repayable Facebook Page. Here’s to a better interest rate and feeling like a student loan refinancing champ!
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by Repayable | Sep 4, 2017 | Getting started, Money Matters
Image By:Nelson Roth
The solar eclipse is far behind us and if you followed the rules you don’t have any lasting eye damage. Unfortunately following the rules in college doesn’t necessarily prevent you from having lasting financial damage in the form of student loan debt.
But never fear, Repayable is here to help you figure out the strategy that’s right for your financial situation so you can beat back your debt.
Read this if you’ve been too nervous to look at your student loan balance but you’re ready to try to do something about it. Estimated read time ~3 min.
If You’re in College and Have Federal Loans
The best way for you to see your total federal loan amount while you’re still in college is to go to the National Student Loan Data System (NSLDS). They’re your one stop shop for all your federal loan amounts. NSLDS collects their information from the Direct Loan program, schools, and the Department of Education. This information is a little older (about 120 days) so isn’t the best resource if you’re actively in repayment but works great while you’re still in college.
If You Have Private Loans or If You’ve Already Graduated
You can find out who your lender is by checking your credit report, your lender will be listed, or by asking your college’s financial aid office for help. Private loans aren’t listed in the NSLDS so this is the best place to find private loan balances. Your current loan servicer will have the most accurate and up-to-date information on your loan balance which is what you need if you’re in repayment.
So How’d it Go?
You looked at your balance, you stared right at it, you empowered yourself with a real number. So what’s the verdict? Is it more, less, or about the same amount you thought it was? I remember when I graduated I thought I had borrowed $118,000 then realized $10,000 of interest had accrued on my unsubsidized loans… it was such a bummer but very quickly helped me realize the financial burden of interest! Right now I owe $71,150.10. Share your experience with owning your number on the Repayable Facebook Page or in the comments below!
Additional Resources
NSLDS FAQ
How Much Do I Owe in Student Loans Article
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