×

9 Signs It’s Time to Refinance Student Loan Debt

October 15, 2018

When is it time to swipe right on a refinance of student loan debt? It can be a tough question because everyone’s situation is so unique, and your goals or your motivation might be totally different from someone else. That’s why we’ve put together a simple explanation of signs that refinancing might be a good option for you. Here are nine signs it might be time to refinance student loan debt:

 

You have a good credit score.

If you don’t have a good credit score, now is probably not the time to try to refinance. You will not get as favorable of interest rates and you might even be turned down outright. Check your credit score and go over your credit report asap. If there’s anything that needs to be fixed, do it. If your score could be better or if your credit history isn’t very long, look into ways to improve it. You can get your score up and clean up your report, but it takes work. That needs to be in order before you choose to refinance student loan debt.

 

You’re up to date on your loan payments.

Have you been making your payments no problem? Great! If not, now is probably not the time to refinance. You might need a new payment plan instead of refinancing, but you will not look like as good of a borrower if you are behind on payments or have had trouble paying. Get up to date and make your payments on time for a while before trying to refinance. If you’re having trouble coming up with the money, be sure to reach out to your servicer to see what your options are.

 

You are employed with a steady income.

If you are unemployed or your income is spotty, refinancing will likely be difficult or impossible. The best time to refinance is when you land a good main gig that has a consistent paycheck. You’ll have to report your income, so you may want to postpone your refinancing now if you aren’t already making a decent income. If you are self-employed, try giving yourself a few months of solid income before proceeding.

 

You have a good debt-income ratio.

This one can be kind of a bummer because a lot of millennials are saddled with a fair amount of student loan debt (and maybe other kinds of debt) along with being underemployed. To get a hold on some of this debt, you might be looking to refinance. The problem is rates may not be as favorable or you may not qualify—if your debt to income ratio is too high. Look at options for gaining more income or reducing some debts you currently have, like cutting out credit cards and paying down those other debts.

 

You are not planning on student loan forgiveness for public service work.

If you’re in public service and know you’ll qualify for loan forgiveness after the ten-year mark, refinancing can interrupt that and disqualify you for loan forgiveness. If you’re counting on loan forgiveness we’d recommend you don’t refinance your loan with a private vendor, but be sure to verify that you qualify for loan forgiveness.

 

You know which loans to refinance and why.

If you’re not sure about which loans you want to refinance and why check out our guide to student loan refinancing. We help explain why you might not want to refinance federal loans, and which private loans are best to be refinanced.

 

Loan benefits don’t apply to your situation.

If you are not going to qualify for loan forgiveness or if you don’t need benefits like income-based repayment plan options that you’re currently taking advantage of, it might be cool to refinance. Know what special plans you’re using with your current lender before you refinance because you don’t want to lose those in the process.

 

You could save a boatload on interest or loan terms.

People usually think about refinancing when they are looking at a super long-term payment plan that they want to shorten or when they realize that their interest rate is high and they might be able to do better. If you aren’t sure how good your interest rate is, ask a friend or Google current rates. Start comparing. You’ll get an idea. And that will help you understand whether you can keep the same payment and shorten the length of time you pay, too, because this is also tied to interest rates.

 

You know how to find a good lender.

Even if you don’t know how to find a good lender, you can figure it out! We encourage you to reach out and get in touch. With ELFI, applicants get their own Personal Loan Advisor who will stick with you throughout the application and setup if you decide to refinance, making the process simple and straightforward.

 

What To Know Before Refinancing Student Loans

Leave a Reply

Your email address will not be published. Required fields are marked *

2019-09-22
5 Common Questions About Student Loan Refinancing

Deciding to refinance your student loans is a big step in your financial journey. As with any big step, there are often questions that arise. We’re sharing some of the most common questions our Personal Loan Advisors hear from borrowers looking to refinance their student loans. 

1. Will my refinanced student loan have a variable or fixed interest rate?

Either! Education Loan Finance offers both fixed and variable interest rates, giving you the freedom to choose.  Fixed interest rates will not change from year to year, but variable interest rates will fluctuate based on the
LIBOR index and may increase or decrease over the life of the loan. Read our blog about variable and fixed interest rates to learn more.  

2. How long will the application process take?

You’ll be done before you know it! The application process is quick and easy. After providing some information about yourself and your student loans, you’ll upload documents and submit the application. If you refinance your student loans with ELFI, you’ll receive a Personal Loan Advisor who will be your point of contact throughout the process – one person who’ll be with you step-by-step.

3. Can I consolidate both federal and private student loans?

Yes! ELFI allows you to consolidate federal student loans as well as private student loans from multiple lenders. As long as they are student loans, ELFI can consolidate them. However, only student loan debt can be consolidated – no other consumer debt, such as credit card, auto, or mortgage can be included, even if it was used to pay education expenses. 

4. Can I consolidate my student loans with my spouse’s student loans?

While spouses are eligible to serve as a cosigner on an application, we cannot consolidate student loan debt among multiple borrowers – even if they are hitched! 

5. Will the application process affect my credit score?

We’ll run a “soft credit inquiry” during the pre-qualification phase of refinancing in order to provide you with preliminary rates that you may qualify for. A Soft credit inquiry won’t affect your credit score. However, once you choose your loan product and submit your application, we’ll need to view your full credit report – this will show up as a hard credit inquiry. These inquiries are common among student loan refinancing lenders.   Hopefully this short Q&A gave you some helpful insight about what to expect when refinancing your student loans. If you have questions about the student loan refinancing process, you can check out our full list of frequently asked questions or contact ELFI at 1-844-601-3534 to speak with a Personal Loan Advisor. 

Learn More About Student Loan Refinancing

  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.
Happy couple working on budget
2019-09-20
How to Know When It’s Time to Refinance Your Student Loans

There are plenty of milestones in life that give us reason to celebrate– high school graduation, marriage, the birth of child, paying off student loans. Yes, seeing your debt decrease and your savings increase for many people are a time worth remembering. And truth be told, being further out of debt can make those other milestones much more enjoyable. This blog is designed to help you reach that debt-free milestone quicker by refinancing your student loans. After all, getting them under control and adjusting the repayment terms to something more favorable could help make a dent. Here’s how to know it’s time to refinance your student loans:

You Earn Good Money

No one wants to see their hard-earning income fly out the window. If we’re talking about milestones, we would argue that the 15th and 30th of the month are recurring ones that give us plenty of joy, albeit short-lived. When we see money deposited we want to hold on to it and protect it. However, your debt doesn’t go away. Even though you’re earning good money you will have to face the music and pay off the education that helped get you to the position you’re in. Refinancing your student loans often means a better interest rate and the option to choose a better term.

You’re Credit-Worthy

Many people simply aren’t aware that federal interest rates are not dependent on your financial circumstances. There are a few factors involved, but the credit history of the borrower isn’t one of them. If you’ve been on-time with your credit card, mortgage, car loan, or any other debt, and maintained a good balance between the money you earn versus what you owe in debt, you’ve likely got a high credit score. When you refinance your student loans with a private lender that credit score helps determine your interest rate, and that in return can help save some money.

You Love One Payment

One of the added benefits of refinancing your student loans often means consolidating your loans. While it’s true you can still refinance partial loans, lumping them all together with a nice bow on top not only helps you feel empowered to pay them off, but also reduces the likelihood you’ll miss a payment due to the sheer number of them floating around out there.

You’re incentivized at Work

A growing number of companies are taking a long, hard look at the benefits they offer their employees. Gone are the days of sticking with one job from graduation to retirement. Today, it’s all about working for an employer that offers great benefits, compensation and work/life balance. And because of that, repayment part of an employee’s student loan obligations are becoming the norm. If you’re in this category, it may be wise to refinance your student loans, consolidate them, and watch your employer help pay down your debt. If you can check these boxes chances are you’re ready to refinance your student loans and are one step closer to that all-important milestone of getting out of debt. Speak with one of our Personal Loan Advisors to help walk you through the process.   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 web sites 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.
2019-09-16
What I Would Have Told Myself in College: Barbara Thomas

  Barbara Thomas, Executive Vice President of Education Loan Finance (ELFI) provides some financial advice to college students based on her own experiences in college.   Hello, I’m Barbara Thomas. For most, like me, my college days were a great experience that lead to incredible personal growth. I had a marvelous sense of freedom and made many new friends. However, I have spent much time reflecting on what I would do differently if I could begin my college life all over again, given what I know now. Hindsight is a wonderful thing, isn’t it? So here’s my advice to all of you who are preparing to enter college, or are currently in your freshman or sophomore years.

Choose an Affordable College

When looking for the right college, don’t get beguiled by a famous name and a beautiful campus. And, while a state-of-the-art fitness center or an Olympic-size swimming pool might be important if you’re an athlete, most of the time you will be paying for them in higher college fees. Instead, make sure to keep your eyes on finances, as affordability should be a top concern. Considering the fact that many students end up taking on sizeable student loan debt, keep in mind that you (most likely) won’t be living on that beautiful campus in your late 20s or 30s.

Rethink Your Path to the Best Education.

Just because a college is more expensive, doesn’t
necessarily mean that it’s better than one that costs less. You should look upon college as an investment in your future. Consider what the return on investment (ROI) from your college education will look like. In other words, analyze which college is likely to provide you with the most bang for your buck. Here’s a report from U.S. News & World Report that gives you the ROI of different colleges.

Look at Alternatives to a Four-Year College.

If you find out that college is not the best path for you, it can turn out to be an expensive mistake. Keep in mind that dropping out of college won’t make your student loans disappear. So before you enroll in a college, consider these alternatives:
  • Take a gap year to earn money to put toward going to college and give yourself more time to decide what you want to do.
  • Consider attending a trade school to learn a valuable skill with high earnings potential.
  • Spend two years at a community college. Attending a community college can help you save on tuition. However, if you plan to transfer to a college of your choice, be sure to do some checking. Find out how many transfer students are accepted and how many of your community college credits can be used.
Do your research and crunch the numbers to make sure you’re making the best choice.

Earn More While in School

A survey of millennials found that earning money while in college was the number one thing that participants wished they had done (or done more of). This reflects the increasing financial cost that goes along with obtaining a college degree. The College Board estimated that in 2017 (updated figures are available), the average student loan debt upon graduation was $28,500. Keep in mind that a heavy debt load is going to affect your financial future – your ability to buy a home, start a family, and save for retirement. Apart from financial considerations, there is no better way to acquire real job skills than to hold down a job and learn about its demands firsthand. Employers know this, which is why previous work experience is the most popular measure to assess job candidates, even those straight out of college.

Research Ways To Lower Your Monthly Student Loan Payments

So, you’ve done everything right - you chose the higher education path that was right for you, and you have landed an interesting job. Now, what about those student loan payments? Are they weighing you down and preventing you from leading the life that you had envisioned after college? ELFI has a solution to your problem – it’s called refinancing. You can close out your original loan and take out a new one with a lower interest rate and/or a longer term. This can significantly lower your monthly loan payments. Get in touch with us to see how we can help you!  

Learn More About Student Loan Refinancing With ELFI

  Terms and conditions apply. Subject to credit approval.