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These include the strength of your credit score, loan amount limits and whether you have a stable job.
What Happens When You Refinance a Student Loan?
Usually, people switch because they want to lower their interest rates or change the loans repayment length.
Credit Score Impacts
Refinancing a student loan incurs a hard inquiry into your credit history.
Is Refinancing Student Loans a Good Idea?
Pros and Cons
Refinancing student loans is a good idea in theory, but its not a one-size-fits-all option.
There are some pros and cons that you must consider before switching to refinancing.
Deciding when to refinance student loans means reviewing your financial circumstances to determine the best time to act.
Gauge your financial situation honestly and review your payment and income history.
If your credit score and income are steadily improving, thats the first indicator that refinancing is an option.
Another factor to consider is interest rates and whether they have dropped significantly.
Suppose you took on a federal student loan.
Refinancing removes those benefits and obliges you to pay a fixed amount regardless of your situation.
Comparison: Federal Loans vs.
Refinanced Private Loans
How To Refinance Student Loans: 7 Steps
1.
Check Your Credit Score
Your credit score affects the interest rates offered to you on the new loan.
Aim for a credit score of 670 or higher for the best rates.
Compare Lenders
You have multiple student loan refinancing options, so dont skimp on the research.
Compare offers for the lowest rates, flexible terms, and minimal-to-no fees.
Gather Necessary Documents
Keep proof of income, loan details and credit history information on hand for easy access.
Apply
You must fill out your personal information and undergo a credit check once submitted.
Once you decide, accept the offer that best suits your circumstances.
This consolidation lets you keep the federal benefits of your loan, but doesnt lower your interest rate.
Income-driven repayment plans are a lifesaver when you have an unstable income or your familial situation changes.
Employer Repayment Assistance Programs
Some employers have programs that help you pay off your student debt.
Should You Refinance Your Student Loan?
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