Key Inquiries to Consider Prior to Refinancing Student Loans: 7 Essential Questions

It’s natural to ask, ” Do I need to refinance my student loan??”

It’s a good question, but there’s no easy answer. Sometimes refinancing your student loan is the best option, but in other cases it’s better to keep them.

Before you proceed, you should ask yourself some important questions. Asking these questions, and answering them honestly and openly, will help you decide whether or not to refinance student loans right now, in the future, or continue with your current repayment schedule.

1. How does your credit score appear?

You should know your credit score before refinancing student loans. There are many free, fast, and simple ways to check your score online.My Fundrise Returns 2022 – 4 Years Later!

Be aware: Your credit score plays a major role in the amount of student loans you receive.

You’ll have better chances of being approved for refinancing student loans if you have a good credit score, or a score of FICO 670 or more. You may need some extra help if your credit score falls on the lower end.

2. Do you require a cosigner for your loan?

If you have a low credit score, having a cosigner who has good credit will help you qualify for better rates and terms on re-finance loans.

You can ask a loved one to sign on your behalf to get you approved or to get a lower rate.

3. How have you managed to negotiate the best price?

You should not go with the very first company that offers student loans. You should compare interest rates and fees from different lenders before applying. Both student loans and refinancing student loans are covered by this rule.

Consider College Ave Student Loans. Refinancing is available to reduce monthly payments or even the cost of your loan. Other benefits include:

Low interest rates
There are no application fees or origination charges.
Discount on Autopay

Here are a few benefits to consider when researching potential lenders.

To determine your chances of approval without having to make a hard credit inquiry, use the free pre-qualification tool before refinancing your student loans. This can help you determine whether or not you qualify for refinancing student loans with or without cosigner, and what type of rate that you might qualify for.

4. How safe is the job you do?

Before refinancing, determine how stable your income is. You will lose federal options for income-based repayment or forgiveness if you refinance your federal student loans through a private lender.

Student loan refinancing is best for those who are able to pay off their loans faster and on their terms. Refinancing could be a good idea if your job or income is uncertain.

5. What can I gain from refinancing my home?

You’ll need to know whyy before you refinance. Refinancing should primarily result in a substantial gain, such as a lower rate of interest, a smaller total amount charged, a more affordable monthly payment, a better repayment schedule, or other benefits.

You can use a student refinance calculator to determine if refinancing is the right option for you. It can be used to compare the new loan options you are considering (including your monthly payments and interest rates) with what you currently have.

6. How do I plan to repay this debt?

When you decide how you will pay back your student loans, it is easier to compare the student loan companies. You can then determine what repayment plan you should be looking for and what next steps you should take.As you look for new loans, determine the monthly payment that you can afford. This can help you determine which loan term gives you the monthly payment that you want.

7. Want to access loan forgiveness plans?

You should check if you qualify for forgiveness of student loan debt in the future if you have federal loans. Since federal student loans are the only ones eligible for forgiveness programs like Public Service loan Forgiveness or Teacher’s Loan Forgiveness.

income driven repayment plans are also available. These plans allow you to pay a certain percentage of your income over a period of 20-25 years, before your remaining student loans are forgiven.

Refinancing is not necessary if you want to be eligible for forgiveness under one of these plans. Refinancing is a good option if you plan to pay your student loans off over a set period of time and want a lower rate or a smaller monthly payment.