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What do people require to refinance student loans?

I’ve heard many positive reviews of loan refinancing and most people claim that the process helps you to save a lot of money. What I don’t know is how to actually refinance student loans. Does it require any certain papers? What are the conditions that help you to save money? Does it depend on the types of student loans? I have a regular federal unsubsidized student aid and I am pretty satisfied with it. This is one of those low interest student loans that people are looking for. However, the money is still huge and it would be great to save some of it. Will refinancing help get a student loan that is more affordable?

Jan Berry

in Student Loans

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Kevin Sutter on March 16, 2018

Refinancing is one of those few methods that can help get student loans that are more bearable. Of course, this is not forgiving a part of your debt; however, smart use of refinancing will lower your interest rates.

Basically, this is the process of borrowing additional money on affordable interest rates to repay your loan. When combined with your previous debt, the general interest rate will be lower. Sometimes, people save thousands of dollars by refinancing. People who study expensive majors sometimes save a hundred thousand dollars.

There is a great chance you will be approved to refinance a student loan if you have a good credit score and the lender believes you will be able to repay the debt. There are a few tricks that will help you ensure the success of this process.

First of all, you may want to check your credit score. Make sure that you meet the required financial obligations and have a good history. Aim for score 700 and higher.

In addition, you have to have sufficient income to show the lender you can repay the debt and won’t leave them without their money. Show them the papers that prove the consistency and stability of your income. Also, choose a right co-signer for student loan refinancing to make your chances better.

Then, get rid of other debts you may have or, at least, decrease the amount of money you owe. Lower your debt-to-income ratio. Finding a better-paying job is also a key to refinancing success.

Student loans with low interest rates are not as great for refinancing as the process can hardly decrease something that is already very affordable. That is why you have better chances if you have an expensive loan.

To avoid refusals, you can apply to multiple lenders and constantly search for better options.

A student loan refinance calculator will help you to estimate the amount of monthly payments you will have to make. There are many of them available online, but I suggest you to use this one by Nerd Wallet https://www.nerdwallet.com/blog/loans/student-loans/student-loan-refinance-calculator/ The results are quite precise and show you enough information to be able to understand whether you need to undertake this step or not.

Many people think that refinancing is useless and you just have to select the right type of student loan. However, they miss the opportunity to save their expenses just because they are lazy to check the option.
Grasp the opportunity, don’t waste it.

Larry Warren2 years ago

I’d like to add a couple of things to the answer. All banks have a minimum lending amount that you have to check before accepting the offer. Also, some of them have a maximum lending amount as well. Of course, people rarely reach this number, but it can’t hurt to know all details about their offers.  

Some lenders work exclusively with the residents of certain states. So, looking for a good bank, make sure that it provides its services to your place.

Here is a great list of banks to refinance a student loan:  https://studentloanhero.com/5-banks-to-refinance-your-student-loans-0092/ Look at the options here. Don’t forget to scroll down to the comparison part to see the differences between these offers. Some of them are minor and don’t change anything, others matter a lot and can influence your decision.

Anyway, the main rule about student loan refinancing is to keep calm and research. Don’t hurry to make a decision.


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