Refinancing My Student Loan

If you’re like me, your student loan payments are likely one of the largest monthly expenses in your budget right now. Refinancing can help you save money over time by reducing interest rates and extending your repayment period. But is refinancing the right move for you? Let’s find out.

What is refinancing?

Refinancing a student loan is the process of taking out a new loan to pay off an existing loan. This is not the same as consolidation, which involves combining all your federal loans into one new loan with one fixed interest rate. Refinancing can be done through private lenders like SoFi or CommonBond, who offer fixed rates for variable repayment plans that range from 3-year to 15-year terms.

CommonBond offers two kinds of refinancing:

• Fixed rate private refinancing for existing student loans with flexible repayment options and no origination fees (if you pay off within 12 months)
• Variable rate personal loan for up to $50K with no origination fee

How do I know if this is the right move for me?

• Check your credit score. Your credit score is the average of all of your recent credit scores, and it will determine how much you pay for a loan. If you have a high enough score, then refinancing may be worth pursuing.
• Compare interest rates on different loans. You want to make sure that you’re getting the best rate possible before refinancing—a few percentage points can make a big difference in both the amount saved and how quickly it gets paid back! Ask yourself: “Am I paying more than my current loan? Is this new one better or worse?” You should also consider whether this new loan comes with an introductory period where its interest rate is lower than normal (this might be helpful if you have plans to refinance again before then).
• Calculate how much time it will take for me to save money by refinancing my student loans at Lending Tree using my estimated monthly payment and current interest rate on my existing debt as input variables into their calculator tool—it takes about ten seconds!

Should I consider other options first?

To determine if consolidating is the right choice for you, you’ll want to consider some other options first. Here are some things you can do:

• Refinance with a bank or credit union. Many banks and credit unions offer lower interest rates than private lenders. If your current student loan provider isn’t offering competitive rates, check out those offered by local banks or financial institutions.
• Refinance with a parent or family member. If your parents have good credit scores and would be willing to co-sign on your loan, this could potentially save you money on interest over time because both parties’ names will be added as obligors on the new contract between lender and borrower (this means that both parties would be liable for paying off the debt).

What credit score do I need to refinance student loans?

Your credit score will determine the interest rate you get and whether or not you are approved for refinancing. If you have a high credit score, your lender will offer a low interest rate on your loan. The lower your score, the higher the interest rate; however, after just one year of making payments on time and paying off some of your loan balance through biweekly or monthly repayment plans, it is possible to raise that score again.

For example: A lender may consider offering a fixed 5% APR if your score was above 720 and an unsecured variable APR of up to 12% if it was below 600 (with no history).

Who can help me refinance my loans?

If you have good credit and a steady income, refinancing is likely to be a good option for you. Refinancing can save you money over time by getting you a better interest rate on your student loans.

You can refinance your student loans with a private lender through LendingTree.com or via our Student Loan Refinancing marketplace (it’s free to join!). If you have federal or private student loans, we can help guide you through the process of finding the best rates on those specific types of loans.

We’ve helped thousands of borrowers lower their monthly payments through refinanced student loans and saved them tens of thousands in interest payments.* If you want more information about how refinancing works and whether it’s right for your situation, please contact us!

SoFi vs. CommonBond vs. Earnest vs. LendKey vs. Splash Financial vs. Citizens Bank

When you’re shopping around for a lender, the most important thing to look at is the interest rate and fees.

• Compare rates. Student loan refinance rates vary depending on your credit score and other factors, but generally speaking most lenders offer a range of 5% to 8%. The APR (annual percentage rate) is what you would pay if you make only minimum monthly payments each month.
• Compare features. Look through all the refinancing offers and compare their features. You’ll want to make sure they have an application process that’s fast and easy to navigate so that you can get approved as soon as possible. You’ll also want to see what kind of customer service options are available in case anything goes wrong or takes longer than expected.
• Compare customer service & resources: To find out how easy it will be for them to help with any issues after they’ve been approved, call or email customer service representatives from each option with specific questions like “How long will it take my student loan refinance application process?”

You may be able to refinance your student loan with a private lender, and save money over time.

You may be able to refinance your student loan with a private lender, and save money over time.

Many people who have graduated from college or trade school find themselves struggling to make payments on their student loan debt. Refinancing is an option that allows you to get a lower interest rate on your existing student loans, which can help you make more affordable monthly payments. If you have good credit and consistent income, refinancing might be a good option for you.

When refinancing your student loan(s), it’s important not to change the terms of the original contract (like changing the length of repayment). When you refinance with a private lender, they will sell off these loans and use that money as collateral for their own investments in other companies or projects. Doing this gives them less risk than if they were simply lending out someone else’s money without getting anything back in return if something went wrong – like defaulting on a payment!

If you have student loans, it’s worth taking the time to learn about refinancing. You might be able to save money by refinancing with a private lender, and get better terms on your loan.