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Student Loan Refinancing Made Simple.

Discover our low rates and fast, no-fee application process for refinancing your student loans or financing your college education.

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You deserve great rates and flexible terms.

Student loan terms range from 5-15 years*, with student loan refinancing terms ranging from 5-20 years*. Our parent loans offer flexible terms from 5-10 years*. All student loans have the option of low fixed or variable rates, and best of all, you can prequalify in minutes. Go ahead, empower your future.

Student Loan Refinancing
Undergraduate Loans
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Simple. Smart. Secure.

There’s a smarter way to manage your student loans. At ELFI, we offer a simple online application process paired with guidance from a Personal Loan Advisor who’s here to help every step of the way. Best of all, you can prequalify in minutes, without it impacting your credit score.

With ELFI, You Won’t Pay:

• Application fees
• Origination fees
• Prepayment penalties

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Pre-qualification does not affect your credit score

1

PREQUALIFICATION

See personalized rates in minutes, without affecting your credit score.

2

APPLY

Explore options and choose which plan has the best rates, terms and payments for your student loan needs.

3

UPLOAD & SIGN

Upload screenshots or smartphone photos of your documents. Then sign your paperwork electronically!

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We believe in rewarding financially responsible borrowers by providing some of the lowest student loan rates available.

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Our ELFI management team has over 30 years of expertise in student loans and student loan refinancing.

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Secure your personalized student loan or refinancing options in just a few short minutes.

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Our award-winning customer service team will guide you every step of the way.

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ELFI private student loans and student loan refinancing are available across the entire U.S. and Puerto Rico.

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Together we can empower a brighter future. Beyond those we serve through our private student loans and student loan refinancing, we are honored to give back to our community through financial literacy programs and academic scholarships that have impacted over 20,000 students.

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Student Loan Refinancing & Private Student Loan Resources

Learn the basics of student loan repayment, student loan refinancing, and other strategies for achieving financial freedom.
2019-11-07
Student Loan Refinancing Basics

You’ve graduated and have a great job! You’re flying high and loving your post-grad life. But then your dreaded student loan bill comes. If your high-interest, scattered monthly payments bring you dread, you should consider student loan refinancing. Not sure what it is or if it’s right for you? Don’t worry! We’ve gathered all the most important information so that you can make the decision that is best for you and your wallet.

 

What is student loan refinancing and why should I consider it?

Student loan refinancing allows you to obtain a new interest rate by refinancing your current student loans into a new loan. Both private and federal student loans are eligible to be refinanced. Parents, if you took out student loans for your child, PLUS loans are also eligible for refinancing.

 

Oftentimes, when students first apply for private student loans, they have a lower credit score and, as a result, don’t obtain the best interest rate. Let’s say when you were 18 you signed up for private student loans with an interest rate of 9.5%. Now you have a steady income and a healthy credit score, qualifying you for a lower interest rate around 6%. Refinancing your student loans is how you can obtain that lower interest rate, and as a result, put more money in your pocket. To illustrate how much we really mean, get this: Our customers reported saving an average of $309 every month and an average of $20,936 in total savings¹. That’s a nice chunk of change!

 

Want to see just how much money you could save? Plug your info into our student loan refinance calculator to get your estimated rate and monthly payment*.

 

Is student loan refinancing the same as consolidation?

People sometimes confuse refinancing with consolidation. Consolidation is for people who have multiple federal student loans and want to combine them under one monthly payment. Consolidation does not lower your interest rate, it just makes the payment process easier by streamlining your loans into one payment. When you consolidate your federal student loans, you will receive a new interest rate. This new rate is the weighted average of your previous loans and rounded up one-eighth of a percent. If you want to lower your interest rate, you need to consider student loan refinancing. One added benefit of student loan refinancing, in addition to the lower interest rate, is that it can give you one single monthly payment.

 

How to know if refinancing student loans is a good fit for you

Refinancing your student loans can be incredibly beneficial for student loan borrowers, but it’s not right for everyone. Here are three signs refinancing is a good fit for you right now:

  1. You are gainfully employed - It’s best to consider student loan refinancing only after you have graduated, secured a job, and have a steady income.
  2. You have a strong credit score - Aim for at least a 680 before applying. The higher the credit score, your rates will likely be better.
  3. You don’t have a high debt-to-income ratio - Your debt-to-income ratio reveals how much debt you have in relation to your monthly income. A great DTI is 20% or lower, but in some cases you can qualify with a DTI of 40%. Obviously the lower the better! You can calculate your DTI with this formula: DTI = (Total of your monthly debt payments/your gross monthly income) x 100.
 

Of course, refinancing is not going to be the right option for everyone. Here are a few situations when refinancing may be a bad idea.

 
  1. You are giving up other benefits - If you qualify for student loan forgiveness through the federal government, then refinancing your student loans may not be the best fit for you because it will disqualify you from receiving this benefit. It’s worth mentioning that more than 99% of people who have applied for Public Service Loan Forgiveness (PSLF) have been rejected.
  2. You only have a few thousand dollars or a couple of years left on your loan - Most companies, including ELFI*, require a minimum dollar amount to refinance. For example, if you only have $3,000 left on your student loan, refinancing probably isn’t a viable option. To refinance student loans with ELFI you must have at least $15,000 in student loan debt.
  3. You already have a low rate and are satisfied with your monthly payments - Do your research to make sure your low rate is truly as low as it can be. If it is, why mess with a good thing?
 

If you don’t qualify for student loan refinancing on your own, you can apply with a creditworthy cosigner. If you choose to do so, your cosigner will need to have many of the same requirements as stated above.

 

How to refinance your student loans

Congrats! You’ve decided that refinancing your student loans is the best fit for you. Luckily, the application process with ELFI is quick, easy and 100% online. Remember, when researching student loan refinance providers, be on the lookout for application fees, origination fees, and prepayment penalties. With ELFI, you won’t pay any of these fees.

 

Here are the steps you need to take to refinance your student loans.

  1. Get prequalified - Getting pre-qualified will allow us to provide you with preliminary rates with just a soft credit inquiry that won’t affect your credit score.
  2. Gather your documents
    1. If you’re applying alone, you’ll need:
      1. Recent paystubs documenting the last 30 days of employment
      2. Previous year W-2
      3. Government-issued Identification
      4. Account information to make payments online
      5. Current Billing Statement or payoff letter for each eligible loan
    2. If you’re applying with a cosigner, they’ll need:
      1. Recent paystubs documenting the last 30 days of employment
      2. Previous year W-2
      3. Government-issued Identification
  3. Apply - Explore your options and select the plan with the rates and terms that best fit your needs. Each situation is unique so an ELFI Personal Loan Advisor can help advise you on the best options for you. For example, when applying you’ll have the option of selecting a fixed or variable interest rate.* You’ll want to review and discuss these options before signing on the dotted line.
  4. Send your documents electronically - We make it easy for you! Just send us screenshots or upload photos from your smartphone then sign the paperwork electronically.
 

Conclusion

If you’re eager to lower the amount of money you’re putting towards your student loans, refinancing your student loans is a great option. Refinancing can help you lower your interest rate and adjust your repayment terms. Ready to get started? Find out more here.

 
 

¹Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon several factors.

 

*Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. Terms and conditions apply. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed.

 

Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.

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2019-10-08
Student Loan Refinancing vs. Public Service Loan Forgiveness
Graduates seeking enriching careers like doctors, nurses, and pharmacists can often graduate from school with a large amount of student loan debt. Student loan debt can be especially burdensome during residency.    Many healthcare professionals look to Public Service Loan Forgiveness (PSFL) for relief. Public Service Loan Forgiveness is a federal government program under the U.S. Department of Education's Direct Loan Program offered to forgive qualified candidates of their Federal Direct Loans. The PSLF program can be a good option for healthcare professionals, but it is vital to understand the qualifications.     According to USA Today, the PSLF program has had 41,000 submissions, and only 206 applicants have qualified. When choosing how to proceed with your student loan debt, it is essential to be well informed and have all the facts before making a decision.   Let's review the requirements of the Public Service Loan Forgiveness program, take a look at student loan refinancing, and review the qualifications of both programs to see which option could be right for you.  

Facts About Public Service Loan Forgiveness

If you are a borrower of student loan debt and you work within the public or non-profit sector, you have probably heard of the PSLF program.    If you ever played the game "telephone" as a kid, you'll know that word-of-mouth from multiple individuals can get information and facts mixed up. According to Federal Student Aid, a division of the U.S. Department of Education, the "PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer."    To fully understand this Act, let's review the legislative history.    The program created under the College Cost Reduction and Access Act of 2007 (P.L. 110-84) was designed to encourage student loan borrowers to remain and pursue careers in the non-profit and public sectors, as salaries in the private sector tend to be higher.  

Loans Eligible for Public Service Loan Forgiveness

Certain federal loans are eligible for PSLF. The eligible loans for PSLF are non-defaulted loans under the William D. Ford Federal Direct Loan Program.    You may know this as the Direct Loan Program or Direct Loans. According to the Department of Education, the loans provided under this program are:   

Direct Stafford

Undergraduates, vocational, or graduate students. Must be enrolled half-time in participating schools.  

Direct Unsubsidized Stafford 

Undergraduates, vocational, or graduate students. Must be enrolled half-time in participating schools.   

Direct PLUS 

For parents of dependent students accepted for enrollment half-time in participating schools. As of July 1, 2006, graduate students are eligible.  

Direct Consolidation 

Individuals with student loans that have defaulted but have made satisfactory arrangements to repay the loans.  The Federal Family Education Loan Program and the Federal Perkins Loan Program, don't qualify on their own for the PSLF program. However, if you have a loan within one of these two programs and consolidate them into a Direct Consolidation Loan, they can qualify. Now that we understand the type of eligible loans we'll take a look at some qualifications.  

Qualifying Repayment Plan

Borrowers seeking the PSLF program must have federal Direct Loans and be on a "qualified payment plan" known as an Income-Driven Repayment Plan (IDR).    The 10-Year Standard Repayment Plan qualifies for PSLF, but to have a balance remaining, you must enter into an Income-Driven Repayment plan. If you do not enter an Income-Driven Repayment Plan, you won't have a loan balance left to forgive since you will have paid it off by the time you qualify for PSLF.  

Income-Driven Repayment Plans

Income-Driven Repayment plans base your monthly federal student loan payment on your income. Income-Driven Repayment Plans Include:    

Revised Pay As You Earn Repayment Plan or REPAYE Plan 

Bases the monthly payment on you (and spouse's) adjusted gross income, family size, and state of residence.  

Pay As You Earn or PAYE 

Monthly payments are based on your adjusted gross income and family size. You must be experiencing a financial hardship to qualify. You must also be considered a "new borrower" as of 10/1/2007 or after, or be someone who received an eligible Direct Loan disbursement on 10/1/2011 or after.  

Income-Based Repayment or IBR 

Monthly payments based on your adjusted gross income and family size. Must be experiencing a financial hardship to qualify.  

Income-Contingent Repayment or ICR 

Based on your monthly adjusted gross income and family size. Typically chosen if an individual can't qualify for the Pay As You Earn Plan or Income-Based Repayment.Any changes to your income or your spouse's income will affect your student loan payment. For example, if your salary increases, your student loan payment will as well. If you are married, both your income and your partner's income are combined. Two combined incomes will increase your total income, likely increasing your monthly payment.    Keep in mind: On an Income-Driven Repayment plan, be aware of the overall loan balance. A review of the total debt amount will take place when applying for a mortgage, credit card, or auto loan. A standard evaluation process for financial institutions is reviewing a borrower's debt-to-income (DTI) ratio. Borrowers who have high DTI ratios may receive higher interest rates on their loans because financial institutions view these borrowers as higher risk. Your federal student loan balance could end up costing you in terms of higher interest rates on other types of loans.   

120 Qualified Payments

If you are on a qualified repayment plan, the next step is making 120 qualifying payments. If the total student loan balance is of concern and you plan on paying extra monthly, do so with caution. When paying over the minimum amount you will need to contact the loan servicer. For example, a common federal student loan servicer is FedLoan Servicing. When you contact the federal student loan servicer, you have to request that the extra amount paid is not applied to cover future payments. To qualify for PSLF, you cannot receive credit for a qualifying Public Service Loan Forgiveness payment if no payment is due. You will also need to pay the full amount on the bill for it to be considered a qualified payment.    A common misconception about the PSLF program is that payments need to be consecutive. Payments do not need to be consecutive to count as qualifying in some circumstances. For example, if you work for a qualifying employer and made qualified payments, but then begin to work for a non-qualified employer, you will not lose credit for the qualified payments made before working for the non-qualifying employer.1   It is essential to know that your payment cannot be any later than fifteen days after your due date to be considered a qualified payment. On loans placed into an in-school status, grace period, deferment, or forbearance, you cannot make a qualifying monthly payment. If your loan is in deferment or forbearance to make a qualified payment, you must contact the servicer and request the status waived. According to the federal government, the best way to ensure that you are making on-time payments is to sign up for direct debit with your loan servicer. You need to be working full-time for a qualified employer while making payments on the loan.   1 https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service#qualify  

Qualified Institution/Employer

Your employer plays a vital part as to whether or not you can qualify for PSLF. A qualifying employer should be a government agency or certain types of non-profit organizations. If PSLF is important to you and part of your financial plan, it is imperative that you verify this internally. If at any point your employer is no longer a qualified institution, they are not responsible for notifying you. For example, in the healthcare industry, it is not uncommon for hospitals to convert from a non-profit to a for-profit institution.    To qualify for PSLF, you need to be working full-time for a qualifying employer. Requesting the Employment Certification Form annually from your qualified employer can keep you on track for the program.   

Applying for Public Service Loan Forgiveness

The Public Service Loan Forgiveness program is common among borrowers with federal student loans, but the qualifications are not well-known. For that reason, we have gathered some documents and information for you. First, you should complete and submit the Employment Certification Form for Public Service Loan Forgiveness annually. If you change employers, you should also have this form completed by your new employer. If you do not submit your Employment Certification Form yearly, you will need to submit it when you apply for the PSLF program. When applying for the PSLF program, you will need to submit one for each employer where you worked while making qualified payments. If you are looking for the Employment Certification Form you can download it here.   You can download the PSLF application here. Once you've completed your forms, you have three options for submission. Forms can be mailed, faxed, or submitted through your student loan servicer. Mail your completed application to:   U.S. Department of Education  FedLoan Servicing  P.O. Box 69184  Harrisburg, PA 17106-9184    To fax your information use 717-720-1628. The last option provided for submitting your Public Service Loan Forgiveness is uploading the application to the servicer.   

The Reality of Public Service Loan Forgiveness

The PSLF program only allows forgiveness for certain types of federal loans as described above. To date, the Public Service Loan Forgiveness program has rejected 99% of applicants2. If you want to qualify for PSLF successfully, you must pay close attention to the detailed eligibility requirements of the program. Many of the requirements of the PSLF program can be difficult to understand or even find. To the benefit of those who refinance, student loan refinance companies are obligated by law to disclose information regarding their offerings. Some would say that student loan refinancing has a straightforward process when compared to the PSLF program. Not only is student loan refinancing transparent and held to a number of standards, but it can also really empower borrowers with options. Borrowers who previously had little control over their student loans can now choose what repayment plan works best for their financial future.   There is no “one-size fits all” answer. You need to know your options for managing your student loan debt. Whether you choose to pursue Public Service Loan Forgiveness or refinance your student loans is your decision. Understand that if you choose to pursue PSLF, there is a possibility you will not qualify. Remember, according to an analysis done by USA Today, only 1 percent of student loan borrowers who applied for the PSLF program have qualified.    When deciding what path to take, consider what your financial goals are and what sets you up for the most success in the future.    2 https://ifap.ed.gov/eannouncements/091918FSAPostsNewReportstoFSADataCenter.html  

Student Loan Refinancing 

Student loan refinancing has gained popularity within the last five years. Private companies are offering student loan refinancing as a way to make student loan debt more manageable. Many benefits can be achieved when qualified borrowers refinance their student loans. Most notably they can change repayment terms to fit their financial goals and lifestyle, and combine multiple federal and private loans into one single loan with a simple monthly payment, while likely reducing the amount paid over the life of their loans.    The new interest rate provided is based upon a borrower’s credit history and credit score, in addition to other eligibility criteria, depending on the financial institution. Overall, refinancing student loans can have an impact on a borrower’s interest rate, repayment terms, and benefits.   

Interest Rates

When you take out federal studentloans, all borrowers receive the same interest rate on a given Federal Direct Loan.    The federal government does not review a borrower’s or cosigner’s credit history or credit score. When you refinance your student loans, the private company will take a look over your credit history and credit score. The private student loan refinance company will also review additional information, like income.    Many companies that refinance student loans will offer both variable and fixed rate loans. If you previously had a variable rate loan and qualify to refinance, you can select a fixed rate loan instead and vice versa.   Refinancing provides qualified borrowers the opportunity to make changes to existing student loan terms.  

Repayent Terms & Cosigners

Federal student loans do not provide borrowers with an option regarding the repayment terms on the loan. Some federal loans provide a 10-year standard repayment plan, but other federal loans can span 25 to 30 years. When refinancing your student loans, you can select from the repayment terms offered by the company. Many companies offer repayment terms of 5, 7, 10, 15, and 20 years.    Can you imagine paying off your student loan debt in five years? Many borrowers find that repaying their student loans faster has helped them to save money on interest. Having the ability to select repayment terms can allow borrowers the flexibility to reach other financial goals in their life. Generally, the repayment term selected will affect the interest rate on your new loan after you refinance.   If you took out a private loan for college, it is likely you may have needed a cosigner. When you refinance student loans, you could potentially remove the cosigner from the loan if you have established the necessary credit to take out a loan on your own. Removing a cosigner relieves the cosigner from the financial burden and responsibility of student loan debt and frees up the cosigner’s credit. Be prepared when refinancing your student loans in case there is a loss of benefits.  

Loss of Benefits

Federal loans offer benefits for borrowers that may not be available through a private lender like a student loan refinance company. It’s imperative to read the guidelines and fully understand them before moving forward with refinancing your student loans. One of the biggest setbacks of student loan refinancing is that once you’ve refinanced your student loans through a private company, you no longer qualify for the PSLF Program.   When you refinance your federal student loan, the debt is paid off by the student loan refinance company, and a new loan is issued to you by the refinance company. Therefore, there is no federal student loan anymore. Since that loan is now paid off, there is no balance to forgive, and in turn, you cannot utilize PSLF. This is not the only drawback of refinancing.   Many student loan refinance companies offer different benefits regarding deferments or forbearances and make decisions on a case-by-case basis. Benefits that may have been utilized while repaying your federal student loan may no longer be available through a private lender.  

Public Service Loan Forgiveness or Student Loan Refinancing? Which is Right for You?

Now that you have an understanding of the options available to you as a healthcare professional, consider what makes the most financial sense for your situation.   Student loan refinancing may be a better option if you want to pay off your debt quickly since student loan refinancing allows you to change repayment terms and may have lower interest rates. Changing repayment terms can allow you to pay down your debt faster or even extend repayment.    Another situation where refinancing may be a more attractive offer is if rates achieved by refinancing are lower than rates on your federal loan or your private loans. By achieving a lower interest rate, you will be paying less interest over time. If you are not planning on applying for PSLF for your federal loans, or you have private student loans that carry high-interest rates, you should look into the options available for refinancing student loans.    However, by refinancing your federal student loans you will lose many benefits and protections available to federal student loan borrowers. Keeping your federal protections may be more beneficial than refinancing your student loans.    Whether you choose to pursue PSLF or student loan refinance, you should be knowledgeable about the requirements and the pros and cons of each option.   

See How ELFI Can Help You Refinance Your Student Loans

   
    Subject to credit approval. Terms and conditions apply.   NOTICE: Third Party Web Sites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments. 
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Couple reviewing student loan payment
2019-02-22
Understanding Student Loan Payments
There are many options when it comes to paying student loans, and just as many questions! Questions like what these terms and situations can mean for a borrower. If you have questions about your student loans or want to learn more about how you can manage your repayment, check out these tips on understanding student loan payments.  

What is a student loan servicer?

  Your student loan servicer is the company collects your payments. According to Consumer Financial Protection Bureau, they typically handle most administrative task associated with your loan. Servicers do things like, answer customer service questions and enforce regulations provided by your lender related to your loan. You pay them for your loan and they give you options for repayment and deferment. It’s likely you’ll take out a student loan with one company and end up getting a different servicer. Your servicers can change too if your loan is transferred.  If you choose to consolidate or refinance with a company that gives you lower payments, better interest, or quicker payoff you’ll probably receive a different servicer.  

When should you start making payments?

  Start making loan payments whenever you can. Most student loans allow a period of non-payment while you are in school, known as a grace period.  On average most student loan lenders require payments to be made when the borrower is at less than half-time status for six months. You don’t have to wait until six months after graduating to make payments, though! If you can make payments while in school, you will save on interest and cut the time it takes you to pay off your student loans.  

What’s a student loan grace period?

  The grace period is typically a 6 month period that occurs after graduating, dropping below half-time enrollment status, or leaving school. During the grace period, you are not required to make payments on your student loans. Grace periods will vary based on the student loan lender that you have. Know what your grace period is so you aren’t caught off guard with late payments.  

Can I pay extra on my student loans?

  Yes! There are no prepayment penalties for federal or private student loans. Prepayment penalties are fees charged for reducing your loan balance or paying the entire loan off early. Many other types of debt like mortgages can have a prepayment penalty. Prepayment penalties were created to limit early payment of a debt, but no need to worry about that with your student loans. Instead, pay attention to how additional payments are applied to your loan.   If you make payments online some loan servicers allow you either pay extra on the principal or apply the additional toward interest on the next payment. Basically, if you choose to pay over the minimum depending on who your lender is, you may need to specify the amount that is a prepayment. Prepayments on your loans go towards the principal balance.  You should aim to make prepayments sometimes referred to as overpayments because it lowers the total amount of the loan. When the principal balance decreases it reduces the amount of interest you’ll pay in the long term. The next monthly payment will usually remain the same. Since you’re not applying additional money toward your next payment if you choose this option.  

Check Out This Prepayment Calculator

  Not all loan servicers will direct prepayments towards the principal of your loan unless specified by the borrower. Some lenders will count the prepayment as a payment towards your next monthly payment.  That can make it seem like your extra payments are hardly affecting your balances at all.   Instead, try to direct additional payments toward one loan’s principal. For example, if you have several loans through the same servicer, but one is $1,000, you can pay that off within a year. If you pay an extra $100 per month on that one $1,000 loan principal- it will be gone faster! If you’re not allocating prepayments strategically, you won’t see this same kind of progress.  

What if I can’t pay my student loans?

  There are limited options available when you can’t pay student loans. Weigh your options carefully. When making student loan decisions make sure you’re not adding stress to your future. First, contact your servicer immediately. You’ll have more flexibility if you stay on top of repayment before you start making late payments or missing payments. Avoid missing or late payments at all costs! Not only will late or missed payments damage your credit they put you at risk for extra fees. In addition to damaging your credit, risking additional fees, you could lose benefits available to only those who pay on time.   Repayment Options (Not a Long Term Solution) Look at repayment options. If you can’t pay with the plan you’re currently on there may be a better repayment option. If you are able to select another repayment option that lowers your payment you will want to consider doing so temporarily.  Doing this quickly will avoid you being late on future payments. It’s important to note that repayment plans are not a long-term solution to paying back student loan debt. We wouldn’t recommend for the long term because in more income contingent repayment plans the monthly payment isn’t covering the interest that is accruing during that period. Therefore, you can make a payment every month but the overall loan balance remains the same or could even increase!   Consolidating Student Loans If you’re in good standing on your loans, but want to reduce your payments student loan consolidation might be a good idea. Consolidation can make it easier for you to manage paying all of your loans, open you up to other repayment options, and reduce fees. It’s not a sure thing, but it doesn’t hurt to investigate this option and see if it is right for you.   Deferment or Forbearance: Use with caution! The last options to consider are deferment or forbearance. If you can avoid these options like changing repayment or consolidating, do it! Usually, borrowers have to be in financial hardship to qualify for deferment or forbearance. That doesn’t mean you’re off the hook because you’re in a tough financial spot. Depending on the loan you have, your interest might be added to the principal balance. This is really not ideal because it means your balances will grow. When you start paying again, your balances will be higher than where they are today. This is called capitalized interest—it equates to paying “interest on interest” and can get out of control fast if you use deferment or forbearance for longer-term hardship.   Most people don’t qualify for loan forgiveness because they are having a hard time paying their loans, but be aware that is possible. If you have developed a disability that precludes you from using your education or went to a school that has since shut down you might be eligible for forgiveness. Don’t count on this as an option, and don’t delay if you can’t pay your loans. Start investigating what’s available to you as soon as possible.  

What are income-based repayment options for student loans?

  Private loans may have options available that will lower your payments if you have a lower income, but the standard income-driven repayment plans apply to federal loans. Your monthly loan payment is calculated on your income. Your income is based on some stipulations and it may be taken into account things like your family size.   Income-Based Repayment The standard income-based repayment plan adjusts your payment if your loan payments are more than 10% of your discretionary income. Based on when you took out your loans, there may be other benefits or stipulations to meet in order to qualify. Regardless, you’ll have to calculate your loan payments based on your income and family size through your servicer.   Income-Contingent Repayment This type of repayment limits payments to 20% of discretionary income. The income will be based on income and family size. It is the only option available to Parent PLUS loan borrowers and requires PLUS borrowers to consolidate their loans to qualify.   Pay As You Earn and Revised Pay As You Earn There are limits on which form of this repayment plan you can qualify for. These qualifications are based on when you took out your loans. On the Pay, As You Earn plan you’ll have payments that correlate to 10% of discretionary income. The payment will be based on how much money you’re making and limiting the term of the loan to 20–25 years depending on whether you were a graduate or undergraduate borrower.  

Learn More About Parent Loan Refinancing

   

How does refinancing change my student loan payments and payback?

  Refinancing opens you up to lots of different options. Some qualifications to refinance include illustrating a responsible credit history. People often look into refinancing when interest rates are high, they have a steady income and good credit. Refinancing could help borrowers qualify for lower interest rates. Sometimes people refinance in order to get new loan terms and pay off their loans sooner. Shortening the loan terms on your loan can help you to pay less interest over the life of the loan. Borrowers will refinance to a longer term that allows them to continue the loan payments for a similar or longer period of time.  

9 Signs It’s Time to Refinance Student Loan Debt

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*The interest rate and monthly payment for variable rate loans may increase after closing. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. To qualify for refinancing or student loan consolidation through Education Loan Finance, you must have at least $15,000 in qualified student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary Education Loan Finance institution. Education Loan Finance Parent Loans are limited to a maximum of the 10-year term.