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.
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.
Read this if you’re ready to refinance your student loans and looking for the lowest interest rate.
Estimated read time < 5 minutes.
You’ve decided refinancing is right for you, congrats on taking back your financial power! With that new found dominion it’s time to start making the executive decisions needed to get the most out of your refinance.
First you’ll want to choose the borrower benefits you need so you’re only trusting your money with companies that give you the goods. Go back and read How to Choose the Refi Benefits You Need if you haven’t done this already.
The next step is to shop around for the best deal. You’re entering the world of competition for your loans. That means companies have to offer you the best to get your loan. Doesn’t it feel so good to be in control? So how do you start shopping around for the lowest interest rate without having a million credit checks? You use the rate estimators on the refinancing company website.
1. Go to the websites for all the refinancing companies you’re considering.
Here’s a handy list to get you started. Please note that some of these links are referral links which means we both get paid if you end up refinancing through the link.
Read this if you’re considering refinancing your student loan debt.
Estimated read time ~5 minutes.
Student loan refinancing is all I’ve been talking about lately. Why? Refinancing your student loans is the easiest way to make your student loan payments go farther and it doesn’t require any sacrifice, other than a little time to explore your rates and submit applications. So why don’t more borrowers do it? Maybe people are afraid it’s a scam, maybe they’re worried about the impact on their credit score, maybe they’re worried about losing important federal benefits. Whatever the reasons for avoiding it, today’s review of the benefits of refinancing your student loans should give you a reason to consider refinancing.
You can save a ton of money
Depending on your current interest rate and your remaining loan balance you can save major money, we’re talking thousands to tens of thousands of dollars. Interest rates are starting to creep up right now but they’re still good for borrowers with good credit. The best rates go to those with good credit scores, generally >750 but the higher the better. The minimum required credit scores are generally around 680. You can potentially leverage the excellent credit of someone else by having them co-sign your loan to get a better rate, however this can detract from your personal sense of financial freedom.
By lowering your interest rate, refinancing enables you to get out of debt faster without having to sacrifice to make a higher payment.
You can get better customer service
The customer service of many federal loan servicers is terrible. Sometimes the customer service is not only terrible but potentially unethical. Such is the case with Navient who is being sued by the Consumer Finance Protection Bureau (CFPB) with allegations of mishandling payments and failing to direct borrowers to the best repayment plans. Most refinancing companies have far better customer service and are readily accessible via email or a quick phone call.
You can choose a more aggressive repayment term and monthly payment
Many refinancing companies offer terms as short as 5 years. If your goal is to aggressively repay your student loan debt and you can afford a 5 year term you can get better interest rates. Some borrowers like the shorter term and higher required monthly payment because it holds them accountable to an aggressive repayment schedule. However other borrowers prefer a longer term so they have lower required montly payments and more cushion in their budget. This gives them flexibility to allocate extra funds to student loans when able. Whichever approach you choose some companies, such as Earnest, offer flexible terms based on the specific monthly payment you select.
You can consolidate federal and private student loans
Having multiple individual student loans can be a lot to keep track of, all the different interest rates, multiple loan balances, making payments on different websites for federal vs private loans.. agh! If that seems chaotic, inefficient, or just plain annoying refinancing can eliminate it. When you refinance, all your refinanced loans become one single private loan with one interest rate and one loan servicer. A side note here, you may not want to refinance all your individual loans if some of your loans have a lower interest rate than the rate you will get when you refinance.
You can take charge of your debt by putting it on your terms
Have you noticed how much decision making power you get when you refinance? You choose your company, you choose your term, you choose your monthly payment. All of this contributes to a sense of power and ownership of your student loans. Rather than feeling like a helpless victim you get to feel like a financially savvy freedom fighter for your debt free dream. Your student loan debt is yours to tackle and refinancing is one the tools that puts some power back in your hands.
Refinancing has a lot of benefits for the right borrowers. If you’re not sure if refinancing is right for you check out Is Refinancing Right for You? to get started. Prefer to watch? Check out Repayable on YouTube.
rawpixel.com Read this article if you’re considering refinancing your student loans and aren’t sure which company to choose. Estimated read time ~ 15 minutes. Student loan refinancing, it’s something to consider if you’re looking to repay your...
Read this if you’re considering refinancing your student loans. Estimated read time ~5 minutes.
If you have student loan debt you may have heard whispers about refinancing for a lower interest rate. But you might be wondering if that’s legit, it definitely sounds like a scam. Essentially you give all your income and debt information to a company in the form of a loan application and they approve you and offer you a reduced interest rate. What’s in it for them? Interest on a $1.4 trillion market.
So how do you decide if refinancing your student loans is a smart financial move for you? Read on for straightforward questions and answers to help you decide.
How Predictable is Your Income?
Federal student loans have by far, the most flexible monthly payments. They’re designed to meet the needs of young borrowers inexperienced with debt and landing entry-level positions that may not pay incredibly well. While some refinancing companies offer monthly payment flexibility and the possibility for deferment, many refinancing companies don’t. Borrowers with predictable income are better suited to refinancing.
How Good is Your Credit?
Many student loan companies require minimum credit scores of 660-680. The better your credit score, the better your interest rate. Even if you use a company like Earnest who doesn’t have a minimum required score, a low score may not actually snag you a better interest rate than you currently have. Refinancing is best suite to borrowers with good to excellent credit scores but is worth looking into even if your score is lacking.
Do You Have Federal and Private Loans?
Student loan refinancing allows you to pick and choose the loans you refinance and consolidate them all into one loan. It’s important to note that if you have some loans at a better interest rate than your refinanced rate you can keep those with your current servicer and refinance only the higher interest rate loans. If you’re looking to simplify many loans with different interest rates into one loan with one interest rate, refinancing is a good fit.
How Quickly Do You Want to Repay?
Student loan refinancing shouldn’t be used to extend the term of your loan repayment. Many companies offer terms from 5-15 years. The goal of refinancing is to pay less interest. If you extend your loan term you could wind up paying more. The speed with which you intend to repay your loans can help you decide if a fixed or variable interest rate is right for you. Fixed rates tend to appeal more to those who plan to take awhile to repay and lower starting variable rates appeal to those who want to repay quickly.
What are Your Other Financial Goals?
Less interest = more bang for your buck. You’ll be out of student loan debt faster making the same monthly payment. Do you want to buy a home, max out your 401K contributions, max out your IRA, make additional investments, start a side hustle, drop down to part time at work, change careers, travel? Refinancing will help you get out of student loan debt faster so you can go all in on these goals guilt-free. However, some borrowers don’t want to delay these financial goals and may want more of their money right now. If that’s you, you may not be the right candidate for refinancing.
Will refinancing get you to your debt free dream? Is there a category that you struggle with? Let me know in the comments below or on the Repayable Facebook Page. You can always send me an email jeni@repayable.org with any questions you have about whether refinancing is right for you or not.
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