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Author: it-teaam

  • What’s the Difference Between Subsidized and Unsubsidized Loans?

    What’s the Difference Between Subsidized and Unsubsidized Loans?

    When you pay for school with federal student loans, the loans are either Direct Subsidized Loans or Direct Unsubsidized Loans. What’s the difference between Subsidized and Unsubsidized Student Loans?

    Subsidized loans do not accrue interest while you’re in school, and the federal government pays any interest on your behalf. In contrast, unsubsidized loans accrue interest while you’re in school. Therefore, if you qualify, you can save more money with subsidized student loans than with unsubsidized loans.

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    In this guide, we will discuss:

    What is a Direct Subsidized Loan?

    Direct Subsidized Loans are federal student loans that do not accrue interest while you’re in school because the federal government pays the interest for you. Subsidized loan are available to undergraduate students with financial need. Your school determines the amount of subsidized loans that you can borrow based on your financial need.

    For subsidized student loans, the U.S. Department of Education will pay the interest on a Direct Subsidized Loan:

    • When you are enrolled in school at least half-time;
    • For a “grace period” of six months after you leave school; and
    • When you defer, or postpone, student loan payments

    For example, let’s assume you borrow $10,000 of subsidized student loans during school. When you graduate, you will owe $10,000 of subsidized loans. This is because no interest is added to your loan balance while you’re in school and for six months after during your grace period. Once your grace period ends, you will start to make payments and will owe interest.

    Direct Subsidized Loans: Advantages

    • The U.S. Department of Education pays the interest on your loans so long as you’re enrolled half-time and have financial need.
    • No payments are due until six months after graduation or after your leave school.
    • The federal government pays your interest during forbearance and deferment.

    Direct Subsidized Loans: Disadvantages

    • You have to demonstrate financial need.
    • Annual loan limits are lower compared to unsubsidized loans.
    • You must be an undergraduate to qualify.

    What is a Direct Unsubsidized Loan?

    Direct Subsidized Loans are available to both college and graduate students, and interest accrues while you’re in school and during grace periods. You don’t have to demonstrate financial need, and your school determines how much you can borrow based on the cost of attendance and the amount of financial need that you receive.

    If you choose not to pay the interest while you’re in school, during grace, forbearance or deferment periods, then your interest will be capitalized, meaning that your interest will be added to your principal balance.

    Direct Unsubsidized Loans: Advantages

    • Both undergraduate and graduate students can receive Direct Unsubsidized Loans.
    • You don’t have to demonstrate financial need to qualify.
    • You can borrow higher loan limits compared with Direct Subsidized Loans.

    Direct Unsubsidized Loans: Disadvantages

    • You have to pay interest during school, grace periods, and during forbearance and deferment.

    What’s the difference between subsidized and unsubsidized loans?

    Subsidized and unsubsidized loans are both student loans that are issued by the federal government. However, there are critical differences that could impact how you borrow for college and graduate school.

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    Here are the primary differences between subsidized loans and unsubsidized loans:

    How much can you borrow for subsidized vs. unsubsidized loans?

    Your school will determine how much of subsidized and unsubsidized student loans that you can borrow each academic year.

    Both subsidized and unsubsidized loans have annual loan limits and annual aggregate limits. The amount you can borrow each year may be limited by your year in school and whether you are considered dependent or independent for tax purposes.

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    How interest accrues on subsidized and unsubsidized loans

    Interest of your subsidized and unsubsidized loans accrues differently depending if you are in school, in a grace period, or in deferment.

    Here is how interest accrues on subsidized and unsubsidized student loans:

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    How to get subsidized and unsubsidized loans

    The best way how to get subsidized and unsubsidized student loans is to complete the FAFSA, or the Free Application for Federal Student Aid. This is the form that the federal government, states, colleges and universities use to award financial aid.The FAFSA is free to complete and is required to borrow federal student loans, including subsidized and unsubsidized loans.

    If you qualify, you want to borrow the maximum amount of subsidized loans before you borrow unsubsidized loans because the federal government will pay the interest for you while you’re in school, a grace period or deferment. Maximize your scholarships and grants as well. If you need additional funds to pay for school, private student loans are another option. If you don’t have a credit history, you can apply with a qualified cosigner.

    A qualified cosigner with good to excellent credit and stable income may help you get approved for a private student loan and receive a lower interest rate. Private student loans are different from federal student loans, so make sure to compare lenders, interest rates and loan terms before borrowing. Often, private student loans have lower interest rates than federal student loans, including compared to PLUS Loans.

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  • SoFi Student Loan Refinancing Review

    SoFi Student Loan Refinancing Review

    SoFi® is a leading student loan refinancing lender that was the first company to offer student loan refinancing for federal and private student loans together. SoFi caters to borrowers with excellent credit and a history of financial responsibility.

    In this SoFi student loan refinance review, we will discuss:

    SoFi student loan refinance: Rating

    Best For: SoFi is best for borrowers who want good customer service and additional benefits.

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    SoFi student loan refinance: Pros and Cons

    Pros:

    • Ability to check new interest rate for free before you apply
    • Refinance Parent PLUS Loans in your child’s name
    • Student loan refinancing available in all 50 states and Washington, D.C.

    Cons:

    • Refinancing not available if you didn’t complete your degree
    • No cosigner release option
    • Higher minimum loan balance for California residents

    SoFi student loan refinance: Overview

    SoFi, also known as Social Finance, is a market leader that helped pioneer the technology-driven private student lending market. Based in San Francisco, SoFi positions itself as the “anti-bank” and focuses on borrowers with excellent credit. While there is no minimum income, many borrowers who refinance with SoFi have graduate degrees. In addition to student loan refinancing, SoFi offers its members several perks such as customer support seven days a week and free SoFi events.

    Advantages of Refinancing With SoFi

    Here is what we like about refinancing with SoFi:

    Drawbacks of Refinancing With SoFi

    SoFi can improve in these key areas:

    • Offer co-signer release.
    • Offer more than 12 months of forbearance.
    • Refinance student loans for borrowers without a degree.

    SoFi student loan refinancing review: Details

    How to refinance student loans with SoFi

    You can check your new interest for free in two minutes with no impact to your credit score. If you like your interest rate, you can apply online to refinance your student loans with SoFi. The application comes about 10-15 minutes to complete.

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    Is SoFi right for you?

    SoFi is a trusted student loan refinancing lender that offers competitive rates and terms. Refinancing with SoFi may be right for you if:

    • You have a credit score of at least 650
    • You have stable and recurring monthly income
    • You have a higher interest rate than what SoFi offers
    • You don’t plan to use income-driven repayment or federal student loan forgiveness

    SoFi targets borrowers with good to strong credit scores and high income who have a lower risk of becoming unemployed. Many SoFi members have a graduate degree and credit score over 700. If you have a low credit score, you can apply to SoFi with a qualified cosigner with a good to excellent credit score and income. A qualified cosigner may help you get approved and get a lower rate.

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  • Navient Customer Service: Overview and How to Contact

    Navient Customer Service: Overview and How to Contact

    Navient is a leading student loan servicer that services federal student loans and Parent PLUS loans for the U.S. Department of Education. Navient also services private student loans and loans made under the Federal Family Education Loan Program (FFELP). Navient, which spun off from Sallie Mae, says its federal student loan customers are 35% less likely to default on their student loans.

    Here’s what you should know about Navient to maximize your customer service experience, if Navient is your student loan servicer. In this guide, we will discuss:

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    What is a student loan servicer?

    A student loan servicer collects and manages your student loan payments. If you have federal student loans, the U.S. Department of Education assigns you a student loan servicer when your student loan is disbursed to your college or graduate school. A student loan servicer may be different than your lender. You borrow a student loan from your lender, but you make payments to your student loan servicer.

    Student loan servicers can help you with student loan payments, but they are not necessarily acting as your financial advisor. Therefore, it’s important to understand all your repayment options because your student loan servicer may be acting in its own best interest rather than in yours.

    Navient offers several student loan repayment options:

    Standard Repayment Plan: A standard repayment plan lasts up to 10 years. If you consolidate your federal student loans, you can repay for up to 30 years. The payments are fixed amounts with a minimum of $50 per month.

    Graduated Repayment Plan: A graduated repayment plan starts with a low monthly payment and increases usually every two years. The repayment term is 10 years (and may be up to 30 years for a Direct Consolidation Loan).

    Extended Repayment Plan: An extended repayment plan give you up to 25 years to repay your student loans.

    You can also enroll in an Income-Driven Repayment plan, which lowers your monthly payment based on your discretionary income. With an income-driven payment, your monthly payment may be as low as $0. There are four types of income-driven repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) and Income-Contingent Repayment (ICR). Navient also offers an Income-Sensitive Plan (ISP) for FFELP Loans.

    How to make student loan payments to Navient

    The best way to pay Navient for your student loan payment is on the Navient website. You can use your Navient student loans login. When you register on the Navient website, you will create an ID and password. Make sure to sign up for auto pay so that your student loan payments are automatically withdrawn from your bank account each month. This will help ensure that you don’t receive any late fees or negative impact to your credit score.

    If you face financial hardship or lose your job, Navient offers several deferment and forbearance options. Forbearance and deferment can help you pause or postpone your payments for a temporary period.

    Unemployment Deferment: This postpones payments for up to 36 months if you lose your job or work less than 30 hours per week.

    Economic Hardship Deferment: This postpones payments for up to 36 months if you face financial hardship.

    Education Deferment: This postpones your payments if you are in a graduate fellowship, medical or dental residency, medical or dental internship or related educational program.

    In-School Deferment: This postpones your student loan payments while you are enrolled in school at least half time.

    Parent PLUS Deferment: This postpones payments for Parent PLUS Loan borrowers with a child enrolled in school.

    Military Service Deferment:There are various options for borrowers serving active military duty or in the National Guard. The Servicemembers Civil Relief Act (SCRA) caps the interest rate on both federal and private student loans for borrowers and cosigners. During periods of active duty, interest rates are capped at 6% for loans obtained prior to active duty military service.

    Be aware that even though you can pause payments through forbearance, interest still accrues on your loans during the forbearance period.

    How to contact Navient customer service

    There are various ways to contact Navient customer service:

    Navient Phone Number: 1-800-722-1300

    Navient Hours of Operation: Monday – Thursday 8 am – 9 pm and Friday 8 am – 8 pm E

    Navient Email: Log in and access the “Email Us” feature in the Help Center

    Navient Social Media: Navient Facebook and Navient Twitter

    Navient Fax Number: 1-866-266-0178

    Navient Website: navient.com

    Navient Customer Login: navient.com

    Navient Mailing Address For Loan Payments:

    Navient – U.S. Department of Education Loan Servicing

    P.O. Box 4450

    Portland, OR 97208-4450

    Navient Mailing Address For General Correspondence:

    Navient – U.S. Department of Education Loan Servicing

    P.O. Box 9635

    Wilkes-Barre, PA 18773-9635

    How to file acomplaint against Navient

    If you want to complain about Navient customer service or file a complaint against Navient as your student loan servicer, you have several options. First, you can file a complaint with Navient’s Office of the Consumer Advocate. You can contact the Office of the Consumer Advocate at advocate@navient.com or by calling 1-888-545-4199.

    You can also file a complaint against Navient with:

    You should maintain written communication between you and Navient. This may include your monthly statements, records of communication with a Navient customer service representative, emails and other correspondence.

    You may also contact the U.S. Department of Education Ombudsman:

    Phone: 1- 877-557-2575

    Mailing Address:

    U.S. Department of Education

    Federal Student Aid Ombudsman Group

    P.O. Box 1843

    Monticello, KY 42633

    Make sure to complete the Federal Student Aid (FSA) Ombudsman Information Checklist as well.

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  • Is Student Loan Refinancing Worth It?

    Is Student Loan Refinancing Worth It?

    “Is student loan refinancing worth it?” may be a question on your mind. If so, then you should know that student loan refinancing is a smart financial strategy because you can get a lower student loan interest rate, lower monthly payment and pay off student loan debt faster.

    As with any financial decision, it’s important to weigh the advantages and disadvantages to make sure if student loan refinancing is the best decision for you.

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    Here is a helpful framework to determine if student loan refinancing is worth it for you.

    1. What are my goals for refinancing student loans?
    2. What interest rate can I get with student loan refinancing?
    3. Does refinancing student loans cost money?
    4. Does refinancing student loans save money?
    5. What are the advantages of student loan refinancing?
    6. What are the disadvantages of student loan refinancing?
    7. Do I need a federal student loan repayment plan?
    8. What credit score do I need to refinance my student loans?
    9. What income do I need to refinance my student loans?
    10. Do I need a cosigner to refinance my student loans?

    1. What are my goals for refinancing student loans?

    Start with understanding your goals for refinancing your student loans. There are many reasons to refinance student loans. You can get a lower interest rate, lower your monthly payment, simplify student loan repayment and pay off debt faster. Once you determine your goals, you can then decide which student loan works best for you. When you refinance student loans, you can choose a fixed or variable interest rate and a loan term from five to 20 years.

    2. What interest rate can I get with student loan refinancing?

    Most people refinance their student loans to get a lower interest rate. A lower interest rate means you will pay less each month, which helps save money and pay off your student loans faster. Your new interest rate is based on several factors, which may include your credit score, income, debt-to-income ratio and monthly cash flow.

    When you refinance your student loans, you will receive a new student loan with a lower interest rate. Your new student loan is then used to pay off your old student loans.

    You can check out the latest rates for student loan refinancing, including both fixed and variable interest rates.

    3. Does refinancing student loans cost money?

    There are no fees to refinance student loans. That means no origination fees, no application fees, no third-party fees, no funding fees and no prepayment fees. Before your refinance your student loans, you can check your interest rate for free in about two minutes. This way, you’ll know how much you’ll owe each month and how much you can save. Once you’re ready, you can apply online in 10-15 minutes.

    As with any loan, you’ll owe interest on your new student loan once you refinance.You also may owe a late fee if you make a late payment.

    4. Does refinancing student loans save money?

    The main goal of student loan refinancing is to save money. There are several ways to save money with student loan refinancing. First, when you refinance student loans, you receive a lower interest rate on your student loans, which means you’ll pay less interest.The lower your new interest rate compared to your current interest rate, the more money you can save.

    Second, you can choose a fixed or variable interest rate. If you think interest rates will rise, a fixed interest rate can save you money because you’ll always the pay the same fixed interest rate. If you think interest rates will decline, a variable interest rate may be your best option so that your monthly payment decreases over time.

    Third, with student loan refinancing, you can choose a loan term that best matches your financial situation. For example, you can choose a shorter student repayment period such as five years or a longer student loan repayment such as 20 years. If you choose a shorter repayment period, your monthly payment will be higher, but you will pay less interest over the course of your loan term.

    How much money can you save when you refinance your student loans? Let’s assume that you have $100,000 of student loans at a 7% interest rate and a 10-year repayment term. If you can refinance your student loans at a 3.00% interest rate, you could lower your monthly payment by $195 and save $23,457 total.

    This student loan refinancing calculator shows you how much money you can save when you refinance student loans.

    5. What are the advantages of student loan refinancing?

    Student loan refinancing has many advantages. There are several reasons why you should refinance your student loans:

    • Lower interest rate
    • Change your loan terms
    • Change your student loan servicer
    • Pay off student loans faster
    • Simplify student loan repayment

    Lower interest rates

    The primary reason to refinance student loans is to save money. The best way to save money on your student loans is to get a lower interest rate. When you refinance student loans, a lender can give you a lower interest rate based on your credit score, income, debt-to-income ratio and other criteria that demonstrate a history of financial responsibility. A lower interest rate means you can pay less interest each month and save money.

    Change your loan terms

    If you want new student loan terms, student loan refinancing is a helpful solution. When you refinance student loans, you can choose new loan terms that may be different than your current loan terms. For example, if you have federal student loans, you have a fixed interest rate with a standard repayment plan of 10 years.

    Student loan refinancing has more flexible student loan repayment terms. For example, unlike federal student loans, you can choose a fixed or variable interest rate. You can also choose your repayment period from 5 to 20 years. These flexible options can help you meet your financial goals.

    Change your student loan servicer

    Want a new student loan servicer? Student loan refinancing can help change your student loan servicer and lender. When you refinance your student loans, you choose a new lender and student loan servicer. Your new lender will issue you a new student loan and pay off your old student loan, which cuts ties with your previous lender and servicer. A new student loan servicer could mean better customer service and less stress.

    Pay off student loans faster

    If you want to pay off your student loans faster, student loan refinancing is an excellent tool. Student loan refinancing helps you lower your interest rate, lower your monthly payment and get out of debt more quickly. With a lower interest rate, you’ll owe less money each month.

    With flexible repayment options, you can pay off your student loans faster by choosing a shorter repayment period, such as five years. While your monthly payment increases, your will owe less total interest, save money and pay off your student loans faster.

    Simplify student loan repayment

    Student loan refinancing simplifies student loan repayment because it helps you organize all your student loan repayments into a single student loan. Currently, you may pay different student loan lenders different monthly payments with different interest rates with different due dates.

    When you refinance, you can consolidate your existing federal student loans, private student loans or both into a new, single student loan. Your new student loan has one interest rate, monthly payment and student loan servicer.

    6. What are the disadvantages of student loan refinancing?

    Your personal situation may dictate whether student loan refinancing is right for you. Most disadvantages for student loan refinancing relate to federal student loans. In particular, some borrowers ask: “Should I refinance my federal student loans?”

    Here are some examples when you may not want to refinance your federal student loans:

    • You work in public service
    • You need an income-driven repayment plan
    • You want forbearance or deferment

    You work in public service

    The Public Service Loan Forgiveness program, for example,forgives your federal student loans if you work full-time in a qualified public service role for the government or non-profit organization and meet certain requirements. When you refinance your student loans, you receive a new, private student loan which is used to replace your old student loans.

    Therefore, if you refinance your federal student loans, you will no longer have federal student loans and will not be eligible for this program.

    You need an income-driven repayment plan

    An income-driven repayment plan can lower your monthly student loan payment based on a percentage of your discretionary income. There are four income-driven repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) and Income-Contingent Repayment (ICR).

    You can get federal student loan forgiveness on your remaining loan balance after 20 to 25 years of on-time student loan payments. However, you are liable for income tax on the amount forgiven.

    If you refinance your federal student loans, you will not be eligible for income-driven repayment. While income-driven repayment can lower your monthly student loan payment, interest will accrue on your student loans. Therefore, with an income-driven repayment plan, you may owe more money in interest payments compared with student loan refinancing or the standard repayment plan.

    You want forbearance or deferment

    Forbearance and deferment are two benefits that come with federal student loans. Both enable you to pause your student loan payments if you face financial hardship.

    Forbearance allow you to pause student loan payments, but interest still accrues on your federal student loans during forbearance. Deferment also allows you to pause student loan payments, but interest will not accrue on your student loans. When you refinance your federal student loans, you receive a private student loan and will no longer have federal student loans.

    The good news is that many private lenders offer options to pause your payments for up to 12 months if you face financial hardship or lose your job. So, it’s important to weigh how important forbearance and deferment are to you and if they are worth paying a higher interest.

    In either case, you can still refinance your private student loans because private student loans do not offer forbearance and deferment through the federal government (although they may have similar options).

    7. Do I need a federal student loan repayment plan?

    If you are struggling to repay student loans, you are unemployed or underemployed, or your financial situation is messy, then student loan refinancing may not be right for you.

    A federal student loan repayment plan may be a better option for you. When you refinance with a private lender, the lender pays off your federal student loans with a new private student loan. That means you won’t have access to certain benefits that come with federal student loans.

    There are many options for federal student loan repayment, and this student loan repayment guide can help. For example, you will need a federal student loan repayment plan if you decide to participate in the Public Service Loan Forgiveness program. You also may choose an income-driven repayment plan – another type of federal student loan repayment plan – if you have trouble paying off your student loans. With an income-driven repayment plan, you could receive federal student loan forgiveness after 20 to 25 years of on-time monthly payments.

    There are disadvantages of having a federal student loan repayment plan. First, you may qualify for a lower interest rate through student loan refinancing. If you don’t refinance, you may pay more for your student loans. Second, all federal student loans have a fixed interest rate that does not change. If interest rates drop, you will not receive a lower interest rate unless you refinance.

    When you refinance, you can also choose a fixed or variable interest rate, which provides more flexibility. Third, a federal student loan repayment plan may ultimately be more expensive. While your monthly payment may be less, be careful to note that interest will accrue on your student loans. This can make your student loans more expensive over time because you may ultimately owe more interest.

    Weigh these advantages and disadvantages of federal student loan repayment plans to make sure that student loan refinancing is right for you now and in the future.

    8. What credit score do I need to refinance my student loans?

    Your credit score is a central component that private lenders will evaluate when you refinance your student loans. Lenders want borrowers with a demonstrated history of financial responsibility, meaning you pay on time, don’t skip payments and manage your debtresponsibly.

    If you have good credit, you will have a higher likelihood of being approved to refinance your student loans. Most lenders require a good or excellent credit score when refinancing student loans. The minimum credit score is at least 650, although typically the higher the credit score you have, the lower the rate you canreceive.

    You can check your new interest rate for free in about two minutes with most lenders. This is a soft credit check, so it will not impact your credit score. You can check your new rate with multiple lenders and then compare which rate is best for you.

    If you don’t have good credit, you can apply with a qualified cosigner with good to excellent credit who can meet the other requirements as well. A qualified cosigner can help you get approved for student loan refinancing and may help you qualify for a lower interest rate.

    9. What income do I need to refinance my student loans?

    Most lenders do not require a minimum income. However, lenders want to ensure that you have stable and recurring income to make your monthly payments and pay off your student loans. Lenders require that you are employed, or you have a written job offer to start employment typically within six months. Lenders like stable and recurring income because it gives them confidence that you have sufficientmonthly cash flow to pay your student loans each month.

    In addition to credit score and income, lenders will also evaluate your other debt obligations. For example, if you have a mortgage, credit card debt, car loan or personal loan, lenders will evaluate your other debt in addition to your student loan debt. Lenders want to determine how much you owe relative to your monthly income. This is called a debt-to-income ratio, which is the relationship between your monthly debt payments and income.

    Most lenders prefer a debt-to-income ratio of 30% or lower, with a lower percentage being better than a higher percentage. The goal is to ensure you have sufficient monthly cash flow for living expenses, student loan payments and other debts you owe.

    10. Do I need a co-signer to refinance my student loans?

    A co-signer is not required to refinance your student loans. Many borrowers meet the requirements for student loan refinancing and get approved on their own. So long as you have good to excellent credit, stable and recurring income, a low debt-to-income ratio and strong monthly cash flow, you’re a good candidate to get approved for student loan refinancing.

    If you don’t meet these requirements, have bad credit, you are unemployed, underemployed or generally struggling with your finances, a cosigner may help you get approved. A cosigner will have equal financial responsibility for your student loans, so a parent, spouse or other close family member is a good choice. As discussed, acosigner can help you get approved for student loan refinancing and may help you get a lower interest rate.

    A cosigner is also a good option if you have been rejected for student loan refinancing. Don’t worry – you can apply again. There is no limit to how often you can apply to refinance your student loans. With some lenders, you can also apply for a cosigner release, which means your cosigner no longer will have financial responsibility for your student loans.

    For example, let’s assume you were approved for student loan refinancing with a cosigner. Now, you have good credit and stable income and want to remove that cosigner from your student loan. You can refinance your student loan to remove a cosigner and receive a new student loan that doesn’t include your cosigner. This is another way that student loan refinancing can help.

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  • Does Student Loan Refinancing Affect Your Credit Score?

    Does Student Loan Refinancing Affect Your Credit Score?

    Student loan refinancing is one of the best ways to save money and pay off student loan debt faster.

    When you refinance your student loans, you get a lower interest rate and can simplify your monthly payment through student loan consolidation. You also can choose new student loan terms and get a new student loan servicer.

    Many borrowers ask: “Does student loan refinancing affect your credit score?”

    The short answer is that student loan refinancing temporarily and minimally impacts your credit score. Here’s what you need to know to refinance student loans and keep your credit score intact.

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    Here are some important topics to understand about your credit score when you refinance student loans:

    Will student loan refinancing hurt my credit score?

    Student loan refinancing won’t really hurt your credit score.

    When you choose to refinance student loans, the first step is to compare the latest student loan refinancing rates. You can check your interest rate for free with each lender with no impact to your credit score. This is only a soft credit check and takes about two minutes. Once you decide to apply for student loan refinancing, you can apply to multiple lenders to increase your chances for approval. A student loan refinancing application takes only 10-15 minutes to complete.

    At this point, a lender will perform a hard credit pull, which may impact your credit score by about five points or fewer.

    What is a hard credit inquiry?

    A hard credit inquiry, or hard credit check, is when a lender pulls your credit report as part of the normal underwriting process. If you apply to multiple lenders within a short time frame such as one to two weeks, it may only count as one credit inquiry. A hard credit pull remains on your credit report for only up two years.

    Will student loan refinancing help my credit score?

    Student loan refinancing may not immediately boost your credit score, but one goal of student loan refinancing is to improve your credit score over time. Why? Student loan refinancing helps you get a lower interest rate, which can help make your student loan payments more manageable. When you have more manageable student loan payments, you can pay off your student loans faster. As you pay off debt, your credit score may improve over time.

    Do you need a good credit score to refinance your student loans?

    The minimum credit score to refinance student loans is 650. Most lenders prefer an even higher credit score to ensure that you are a responsible borrower and have a history of demonstrated financial responsibility. Why? Lenders want to ensure that you can repay your student loan on-time and in full.

    Which credit score will lenders review for student loan refinancing? Lenders will evaluate your FICO score, which ranges from 300-850. The lowest credit score is 300 and the highest credit score is 850. FICO is the standard credit score that is used for all types of consumer loans, including mortgages, personal loans, auto loans and student loans.

    What credit score is considered good credit?

    There are five categories in the FICO credit rating scale; the higher your credit score, the better:

    • Exceptional: 800-850
    • Very Good: 740-799
    • Good: 670-739
    • Fair: 580-669
    • Poor: 300-579

    How is my FICO score calculated?

    You may wonder: “How is my FICO score calculated?” Your credit score is determined by five main components:

    • Payment history: 35%
    • Amounts owed: 30%
    • Length of credit history: 15%
    • Credit mix: 10%
    • New credit: 10%

    Therefore, 65% of your credit score – or nearly two-thirds – is based on your ability to make full, on-time payments and manage your student loan debt balance. If you can do those things well, you may be able to increase your credit score. A higher credit score means you may qualify for lower interest rates for student loans, which can save you money. A lower interest rate can help make student loan payments more manageable, which can improve your payment history.

    Should I keep making payments while refinancing?

    Make sure you keep making student loan payments while refinancing. Simply applying for student loan refinancing, or waiting for your application be processed, does not mean you should stop making payments on your old student loans. If you applied for student loan refinancing, you’re still responsible to pay your old student loans until your new student loan is funded. If you miss a payment, your credit score could be hurt.

    Once your new student loan is funded, keep making payments on your new student loans. Missed or late payments can impact your credit score, so make sure to stay focused on developing a positive payment history. If you make any over payments on your old student loans while you’re waiting for your new one, your old lender will refund you the difference.

    What are the best ways to increase your credit score?

    What is the best way to increase your credit score? There are several ways to increase your credit score and maximize your changes to get approved for student loan refinancing and get a lower interest rate. Here are a few helpful strategies:

    • Make on-time payments.
    • Don’t skip payments.
    • Use auto-pay.
    • Pay off your principal balances, not only interest.
    • Contact your lenders in advance if you think you’ll have a financial problem.
    • Minimize your revolving credit balance such as a credit card.
    • Don’t close multiple credit cards at once.
    • Don’t open multiple credit cards at once.

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  • Is There A Downside To Student Loan Refinancing?

    Is There A Downside To Student Loan Refinancing?

    Many borrowers choose student loan refinancing to lower the interest rate on their student loans, save money, and pay off student loans faster. There are many reasons why you should refinance student loans.

    However, student loan refinancing may not be the best choice for every borrower. Based on your individual circumstances, it’s important to understand the upside and downside to student loan refinancing.

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    Before you refinance your student loans, understand whether of any these situations may apply to you. If so, you may want to remain on your current student loan repayment plan. If they don’t apply, then you may be a good candidate for student loan refinancing.

    1. You don’t have stable and recurring income.
    2. You have a low credit score and don’t have a qualified cosigner.
    3. You’re working toward public service loan forgiveness.
    4. You plan to use federal student loan benefits such as income-driven repayment.
    5. You want to change your repayment plan in the future.

    1.You Don’t Have Stable and Recurring Income

    When you refinance student loans, you can get a lower interest rate, lower monthly payment, or both. Your new lender will pay off your old student loans and issue you a new student loan with better terms. With student loan refinancing, you also can say goodbye to your old student loan servicer and get a new student loan servicer instead.

    Lenders approve borrowers who can pay back their student loans and who won’t default. Therefore, lenders prefer borrowers with stable and recurring monthly income so that lenders can lower their risk. This enables lenders to ensure that borrowers have sufficient monthly income to pay off their student loans. Some private lenders allow you to pause loan payments if you lose employment or face financial hardship.

    If you are unemployed, underemployed or don’t get paid regularly, you may want to wait to refinance your student loans.

    2. You Have a Low Credit Score and Don’t Have a Qualified Cosigner

    In addition to income, lenders will evaluate your creditworthiness to ensure that you have a demonstrated history of financial responsibility. Most lenders require a minimum credit score of at least 650. If you have a higher credit score, this may increase your chance of approval. If you have a lower credit score, you can apply with a qualified co-signer. A qualified co-signer is another person such as a parent, spouse or close relative who has good income and credit and is willing to become equally financially responsible for your new student loan. A qualified cosigner can help you get approved for student loan refinancing and even receive a lower interest rate.

    3. You’re Working Toward Student Loan Forgiveness

    If you have federal student loans, the federal government offers several types of student loan forgiveness programs. Examples include the Public Service Loan Forgiveness program and Teacher Loan Forgiveness. These two programs offer forgiveness of your federal student loans after you meet certain requirements.

    If you refinance your federal student loans, you will no longer be eligible for these federal student loan forgiveness programs. The reason is that student loan refinancing results in you receiving a new private student loan, and these programs are for federal student loans only.

    If you are working toward student loan forgiveness, you may decide not to refinance federal student loans. The good news is that you can still refinance your private student loans since private student loans are not eligible for federal student loan forgiveness.

    4. You Plan to Use Federal Student Loan Benefits Such as Income-Driven Repayment

    Student loan refinancing is only available through private lenders. If you refinance your federal student loans, you will no longer have federal student loans outstanding. Your new student loan will be a private student loan. As a result, you will not have access to certain federal benefits such as income-driven repayment plans.

    If you’re struggling to pay your student loans, income-driven repayment plans can lower your monthly payment. There are four income-driven repayment plans:

    • Income-Based Repayment (IBR)
    • Pay As You Earn (PAYE)
    • Revised Pay As You Earn (REPAYE)
    • Income-Contingent Repayment (ICR)

    Income-driven repayment plans such as IBR, PAYE and REPAYE cap your monthly payments to 10% – 15% of your discretionary income. After 20 to 25 years, you can receive student loan forgiveness on your remaining student loan balance. However, you are liable for income tax on the amount forgiven.

    Private lenders don’t offer income-driven repayment. However, many lenders allow you to pause payments during periods of economic hardship or unemployment. Before you decide to refinance your federal student loans, make sure you won’t need an income-driven repayment plan.

    5. You Want to Change Your Repayment Plan in the Future

    The standard student loan repayment term is 10 years. When you refinance your student loans, you have more flexibility to choose your student loan repayment term. Most lenders offer repayment terms from 5 to 20 years. A shorter repayment term such as 5 years means higher monthly payments, but you will save interest and pay off your student loans faster. A longer repayment term will lower your monthly payment, but you’ll have higher total payments. Once you choose your repayment term, your student loan payment term cannot be changed until you refinance your student loans again. Before you refinance your student loans, make sure you choose the right repayment term.

    Determine if Student Loan Refinancing Is Right for You

    Your personal and financial circumstances are unique. That’s why it is important to understand all your options so you can make a fully-informed decision. Student loan refinancing is best for those with good credit, steady and recurring income, and a low debt-to-income ratio. You also must be employed or have a written job offer.

    Why refinance your student loans? Student loan refinancing can reduce your interest rate, monthly payment, or both. Refinancing is best for those not pursuing income-driven repayment or federal student loan forgiveness programs. If you’re struggling to make student loan payments, you may want to wait to refinance student loans.

    If student loan refinancing is right for you, you’ll also get additional benefits. For example, when you refinance student loans, you can choose a fixed or variable rate, access multiple student loan repayment options, and change your student loan servicer.

    [related_posts post_1=’318′ post_2=’333′ post_3=’357′]

  • Earnest Student Loan Refinancing Review

    Earnest Student Loan Refinancing Review

    Earnest is one of the most reputable and well-known student loan refinancing lenders. Earnest is best for borrowers with good credit who want student loan payment flexibility as well as flexible loan terms.

    In this Earnest student loan refinance review, we will discuss:

    Earnest student loan refinance: Rating

    Best For: Earnest is the right choice for borrowers who want to customize their student loan repayment so they can pay off student loans faster.

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    Earnest student loan refinance: Pros and Cons

    Pros:

    • Customize your student loan payments and loan terms.
    • Fast approval process.
    • No late fees.
    • Ability to skip one student loan payment every 12 months.
    • Refinance even if you have an incomplete bachelor’s or associate’s degree 

    Cons:

    • Student loan refinancing not available in Kentucky and Nevada.
    • No option to apply with a cosigner.

    Earnest student loan refinance: Overview

    Earnest is a leading, innovative student loan lender based in San Francisco. Earnest allows you to choose your own student loan interest rate matched to your loan term. Earnest also offers industry-leading repayment flexibility on its student loans. For example, you can choose your exact minimum monthly payment and student loan terms. You can also increase your payments and make extra payments to pay off your student loans faster.

    Earnest prefers borrowers with a history of financial responsibility, stable income and minimal credit card or personal loan debt. Earnest’s underwriting process evaluates more than your credit score. Earnest also incorporates savings, education and earnings potential.

    Advantages of Refinancing With Earnest

    Here is what we like about Earnest:

    • Customize your student loan payments and loan terms.
    • You can choose to make bi-weekly payments to save money on interest.
    • You can increase your payment anytime to pay off your student loans faster.
    • You can skip a payment and make it up later.
    • Earnest looks beyond credit score to approve you for student loan refinancing, and will incorporate savings, education and earnings potential.

    Drawbacks of Refinancing With Earnest

    Earnest can improve in these key areas:

    • Expand student loan refinancing to all 50 states.
    • Allow borrowers to apply with a cosigner.

    Earnest student loan refinancing review: Details

    Is Earnest right for you?

    Earnest has an excellent reputation and is a trusted student loan refinancing leader. Earnest caters to borrowers with good to excellent credit and high income. The average Earnest member earns enough income to pay student loans, other debt obligations and monthly living expenses. 

    Finally, Earnest wants to ensure that you make all your student loan payment each month on-time, and do not have any delinquencies or bankruptcies. Earnest members need to have a strong financial and credit profile, since you can’t apply with a co-signer.

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  • First Republic Student Loan Refinancing Review

    First Republic Student Loan Refinancing Review

    Company Overview: First Republic

    First Republic is a leading private bank with exceptional, personalized customer service and solid commitment to building long-term relationships with its customers. Founded in 1985, First Republic offers among the lowest student loan refinancing rates in the student lending industry. To qualify for these low student loan refinancing rates, you have to meet certain income and credit qualifications. You also need to live near one of First Republic’s physical branches. First Republic has locations in California, Connecticut, Florida, Massachusetts, New York and Oregon.

    How First Republic Compares: Key Benefits For Student Loan Refinancing

    Here are some of the reasons that First Republic borrowers love First Republic student loan refinancing:

    • Significant Savings: Given that First Republic offers among the lowest student loan refinancing rates, the average First Republic borrower can save substantial interests costs on their student loans.
    • Federal & Private: First Republic allows you to refinance and consolidate both federal and private student loans into a new, single student loan.
    • Interest Rebate: If you repay your student loan in full within 4 years,First Republic gives you back the interest paid against your student loan, up to 2.00% of the original student loan balance.
    • Personal Banker: First Republic gives you your own dedicated financial professional known as a personal banker to help with your financial needs.
    • No ATM Fees Worldwide: First Republic provides you with an ATM Rebate Checking account,which offers no access fees at virtually all ATMs worldwide. Even better, any access fees charged by other banks are rebated to you.First Republic will ask that you set up direct deposit and automatic student loan payments in this account, and also maintain a minimum balance.

    Eligibility Criteria

    To apply for First Republic student loan refinancing, you need to meet the following eligibility criteria:

    Requirements To Apply For First Republic Student Loan Refinancing

    Minimum Age: At least age of majority in your state

    Citizenship/Residency: U.S. citizen or permanent resident (applies to co-signer too, if any)

    Employment: You are currently employed

    Eligible Schools: You graduated from a Title IV accredited university or graduate program

    Generally, First Republic lends only to borrowers with good to excellent credit. Loan approval may depend on a number of additional factors, including, but not limited to, your financial history, employment experience and debt-to-income ratio.

    Bottom Line: Is First Republic right for you?

    First Republic has a top reputation for student loan refinancing and for customer service. There are a few things to keep in mind with First Republic student loan refinancing.

    Remember, First Republic caters to borrowers with good to excellent credit and high incomes. Typically, First Republic borrowers have FICO scores of at least 750, and work experience in the same field for at least 2 years.

    First Republic also wants to see strong, stable monthly income and cash flow that is sufficient to cover your life expenses and any other debt obligations. First Republic also likes to see that you have significant savings. Finally, First Republic wants to ensure that you make all your student loan payment each month on-time.

    First Republic may be right for you if you like having a full-service experience, complete with a personal banker. You will have access to First Republic, which offers other types of personal financial products such as small business loans, wealth management and mortgages as well. You will meet with a personal banker to complete your student loan refinancing application, and your personal banker can answer any questions that you may have.

    To qualify for student loan refinancing with First Republic, you need to live near a physical First Republic branch. Therefore, you must be a resident of San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich or New York City.

    Bottom Line: Is First Republic right for you?

    It’s easy to apply for student loan refinancing with First Republic. There are 4 easy steps:

    1. Find your rate

    The good news is that you can check your personalized student loan rate online with First Republic before you complete the full application. This way, you’ll know whether you can be approved for First Republic student loan refinancing. Therefore, First Republic will provide you with a student loan refinancing rate estimate. The pre-approval is only a soft credit pull so there is no impact to your credit.

    2. Connect with a personal banker

    A dedicated financial professional will contact you to discuss your student loan refinancing options, and to answer any questions.

    3. Complete your application online

    • Your most recent pay stubs
    • Your most recent student loan billing statements
    • Driver’s license or passport (or other form of government-issued identification)
    • Transcript or diploma to verify your degree

    4. Enjoy the benefits

    If your student loan refinancing application is approved, you’ll meet with your personal banker to complete the account opening paperwork and start enjoying the benefits.

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  • Sallie Mae Student Loans Review

    Sallie Mae Student Loans Review

    Company Overview: Sallie Mae

    Sallie is a leading student loan company that originates all types of student loans, including, but not limited to, undergraduate student loans, MBA student loans, dental school and medical school student loans, medical residency loans, dental residency loans, health professions graduate loans, bar study loans and general graduate school student loans. Founded in 1973, Sallie Mae is a publicly traded company.

    How Sallie Mae Compares: Key Benefits For Student Loans

    Here are some of the reasons that Sallie Mae borrowers love Sallie Mae MBA student loans:

    • Loan Customization: Sallie Mae helps you customize your student loans to find an optimal loan term length, interest rate and repayment plan.
    • Lower Rate With Cosigner: If you apply with a creditworthy cosigner, Sallie Mae may give you a lower interest rate compared to the interest rate you could get on your own.
    • Deferment and Forbearance: Sallie Mae may allow borrowers to pause their student loan payments if you return to school at least part time. Sallie Mae may also let you pause your student loan payments through a forbearance in three-month increments for a total of 12 months due to economic hardship or illness.
    • Repayment Flexibility: Sallie Mae offers multiple, flexible repayment plans so you can determine which student loan repayment plan is right for you.
    • Cosigner Release:Sallie Mae offers cosigner release after 12 months of consecutive payments. That means if you have graduated and your credit is strong, your cosigner can be released from your student loans once you have made 12 months of consecutive student loan payments. Once your cosigner is released, you will be solely responsible for payment of your student loans.

    Eligibility Criteria

    To apply for Sallie Mae student loans, you need to meet the following eligibility criteria:

    Requirements To Apply For Sallie Mae Student Loans

    Minimum Age: At least age of majority in your state

    Citizenship/Residency: U.S. citizen or permanent resident (applies to co-signer too, if any)

    Education: Attend school at least half-time at a qualifying school

    Loan approval may depend on a number of additional factors, including, but not limited to, your (or your cosigner’s) financial history, credit profile, and monthly income vs. expenses.

    Sallie Mae Repayment Plans

    Sallie Mae provides several flexible repayment plans for your student loans while you are in school:

    1. Interest-Only Payment: Pay the interest only each month for 12 months after your grace period ends. This results in moderate in-school payment.
    2. Flat Payment: Make $25 payments each month while in school to reduce your accrued interest. This yields the lowest in-school payment.
    3. Deferred Payment: No in-school payments required, and you defer your student loan payment until six months after you leave school. You will pay more in interest over the life of your student loan. This yields no student loan payment while you are in school, but will result in the highest overall cost.

    Next Steps: How To Apply To Sallie Mae

    Sallie Mae has an excellent reputation in the student loan industry. The minimum credit score for Sallie Mae student loans is 640, although many borrowers have a credit score above 700. If you cannot get approved on your own, you can apply with a qualified, creditworthy cosigner. The good news is that most people who apply for Sallie Mae student loans apply with a cosigner, which can increase your likelihood of approval.

    Next Steps: How To Apply To Sallie Mae

    You can apply for a Sallie Mae student loan in 3 easy steps.

    Step 1: Check your personalized student loan rate in just 2 minutes.

    Step 2: Complete application and upload documents.

    Step 3: Accept loan terms and get funded.

    The good news is that you can check your personalized student loan rate online with Sallie Mae in 2 minutes. This way, you’ll know whether you can be approved for Sallie Mae student loans before you complete the full application. Therefore, Sallie Mae will provide you with a personalized student loan rate estimate. The pre-approval is only a soft credit pull so there is no impact to your credit.

    If you have been pre-approved, the online application only takes 10-15 minutes to complete.

    Applying is super easy – get your personalized rate in 2 minutes

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