Let’s start with defining what student loan refinancing is. When you refinance student loans, you take out a new loan to pay off your old loans. Now, you’re probably thinking, ‘why take out another loan when I can’t pay off the one I have?’ Well, you could snag a lower interest rate and possibly choose new repayment terms.
How to Qualify
Refinancing your student loans can you save money by replacing existing debt with a new lower-cost loan. To qualify for refinancing student loans, you’ll need a credit score in the high 600s and steady income — if you fall short on these you might need a cosigner. Along with your credit score, some lenders might look at your savings and debt-to-income ratio. Blow the dust off your transcript or diploma — sometimes lenders want proof of graduation.
Benefits to Refinancing Student Loans
Refinancing student loans can be an excellent strategy for managing student loan debt. If you qualify for a new lower rate and are comfortable with giving up the federal student loan benefits, refinancing your student loans might be the right decision. There are some significant potential benefits when you refinance student loans.
- Save money with a lower interest rate
- Adjust monthly payments to match your financial goals
- Removing your cosigner from your debt
Aside from speeding up or slowing down your repayment, refinancing puts you back in control. You can choose a lender and consolidate your debt.
Are There Any Downsides?
As we’ve mentioned above, when you refinance student loans, you give up the federal student loan benefits. This means you’ll lose access to federal programs and protections. If you’re willing to give up those benefits, refinancing could be a wise way to pay off your loans.
How to Refinance Student Loans
There are many lenders out there that offer student loan refinancing. This ranges from traditional banks, to credit unions to online lenders. Here at DEXSTA, we offer loans to help you achieve your financial goals. If you need to consolidate high-interest rate balances, we can help you. Our loans are simple interest with no prepayment penalties. Decisions are made at the branch, so you can have money in your account the same day you contact us.