Wondering if you should refinance student loans? The student loan crisis is worse than ever, with a rising number of college grads falling behind on repaying their loans. More than 1 million Americans a year are defaulting on their federal student loans, according to the Consumer Federation of America.
One option that many student loan borrowers don’t consider is refinancing high-interest student loans.
In this article, we will discuss why people should consider refinancing student loans and the best companies to use.
Why Should You Refinance?
It’s simple to check your rate and can save you a lot of money: There are a lot of competing student loan companies and that’s good for you. That means you can get the best possible interest rate which can save you a lot of money. The average user saves $18,668 when refinancing. You can check your rate for all of the lenders here in under 2 minutes.
If you have a high-interest rate on your student loans: Fortunately, for many graduates, refinancing can be a great opportunity to help with loan payments. If you have federal or private student loans with an interest rate over 4%, then refinancing them will save you a lot of money. Student loans with 6.8% interest rates mean that you’ll need to pay $586 a month in interest alone for every $100,000 you owe. You could also refinance your student loans to a longer term to help lower your monthly payments.
If you don’t qualify for public student loan forgiveness: Public student loan forgiveness (PSLF) was created in order to encourage graduates to pursue full-time work in public sectors including nonprofits and government organizations. If you are working in one of these fields, and have been consistent with your payments, it’s best to weigh your options and see if refinancing or PSLF will save you more money over the life on your student loan.
How Do You Check Your New Rate?
If you are interested in refinancing student loans, it’s simple to check. Here are our top 5 picks for refinancing student loans. You can get your new rate in under 2 minutes by visiting the lender to check your rate (doesn’t affect your credit score):
Would You Qualify?
Now in 2018, more than ever, various private lenders are helping student loan borrowers refinance at lower rates and save thousands of dollars in interest — that is, borrowers with good credit.
Before you decide if student loan refinancing is right for you, you should check to see if you would qualify.
Here are some common eligibility requirements:
Must have a good credit score: Each lender will have a different credit score requirement, but typically you’ll want to have a credit score of 700 or above.
You should be employed or have a job offer: Most lenders require that you are employed or have sufficient income from other sources, or have an offer of employment to start within the next 90 days.
Good Repayment history: You’ll want to be current on your bills, credit cards, and other loans, including student loans.
|*Once you have determined that refinancing your student loans is right for you, we would recommend reviewing your credit report. You can get your credit report for free by using AnnualCreditReport.com or Credit Sesame. If there are any discrepancies on the report, dispute them. This could improve your score and, in turn, improve the terms of the loan.|
Best Companies to Refinance Student Loans?