01 Oct Tips for Refinancing Your Student Loans
Are you trying to cut the cost of your ridiculously priced student loan? We have a solution for you: refinancing. With refinancing you could save up to thousand dollars in interest over the life-span of your loan. There is more to this than meets the eye, with that being said, here are four things to think about when refinancing your student loans.
Fixed vs. Variable Rates
A fixed rate loan is loans that come with an interest rate, but it doesn’t change over time with succeeding interest rates. The fixed rate is a common term that can pertain to different types of loans for various uses such as, student loans, mortgages and auto loans. Variable rates, on the other hand, are loans that have an interest rate that differs over time with surging interest rates. It is important to know the difference between these rates.
Credit Score
Having a high credit score is very crucial when trying to refinance your student loans. You’ll want to try and aim for a credit score of 700 or higher to increase your chances for approval from lenders. Your credit score allows lenders to see if you are financially responsible and can keep up with your payments. If you have a decent credit score, you will be able to qualify to receive a loan.
Steady Income
The first question to ask yourself is if you were to deduct your proposed student loan payments for the month, does an adequate quantity prevail for other vital living expenses? You’ll want to have a steady income before lenders give you a loan. Lenders want to see that you have a monthly income coming in and that you will be able to afford to pay off your loans later on. Make sure to inspect your pay stubs and indicate your monthly after-tax income.
Other Debt
If you have other debt along with your student loans, things like mortgage, credit card or auto debt, will most likely impact underwriting your student loan. If you do have other debt responsibilities, lenders will report and account your total monthly debt payments and include this to the underwriting process. You will want to try and pay off these debts before applying to refinance your student loans.
We understand it can be a lot to figure out when it comes to refinancing student loans, but we are here to help. Please don’t hesitate to contact us through our website or by calling us at 843-549-2265 if you have any questions.
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