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Student Loan Refinancing

A Nurse’s Guide to Student Loan Refinancing

May 14, 2020

As the COVID-19 pandemic has highlighted, nurses play a critical role in our healthcare system, caring for patients, coordinating treatments, and keeping detailed records. 

 

By Kat Tretina
Kat Tretina is a writer based in Orlando, Florida. Her work has been featured in publications like The Huffington Post, Entrepreneur, and more. She is focused on helping people pay down their debt and boost their income.

 

The demand for skilled nurses is only going to grow. According to the U.S. Bureau of Labor Statistics, the job outlook for registered nurses is projected to increase by 12% by 2028, much faster than average. And, nurses can command high salaries. As of 2019, the median salary for registered nurses was $73,300 per year, significantly higher than the median wage for all occupations, which is just $39,810. 

 

While you likely had to take out student loans to pay for your nursing education, your higher-than-average income makes you a strong candidate for student loan refinancing. Consolidating your debt can allow you to save money and pay off your loans sooner so that you can focus on your other financial goals. 

 

Why you should refinance student loans after nursing school

Becoming a registered nurse typically requires only a bachelor’s degree. But if you want to become an Advanced Practice Nurse, nurse administrator, or nurse educator, you’ll need a master’s degree

 

Graduate student loans tend to have higher interest rates than other types of education loans, causing more interest to accrue and your loan balances to grow over time. For example, the interest rate on federal Grad PLUS Loans disbursed between July 1, 2019, and July 1, 2020, is 7.08%. 

 

If you have high-interest debt, refinancing can help you tackle your loans and lower your interest rate. With a solid income as a nurse and a good credit history — or a cosigner willing to apply for a loan with you — you can qualify for a lower rate and save money over the life of your repayment term. In fact, our customers reported that they saved an average of $272 every month and should see an average of $13,940 in total savings after refinancing their student loans with ELFI. 

 

How to refinance nursing school loans

You can refinance your nursing school loans in just five steps: 

 

1. See if you meet the lender’s eligibility requirements

Refinancing lenders all have their own borrower criteria, so it’s a good idea to review their requirements ahead of time to ensure you’re eligible for a loan. At Education Loan Finance, you must meet the following conditions: 

  • You must have at least $15,000 in student loans
  • You must earn at least $35,000 per year
  • Your credit score must be 680 or higher
  • Your credit history must be at least 36 months old
  • You must a bachelor’s degree or higher from an approved college or university
  • You must be a U.S. citizen or permanent resident
  • You must be the age of majority — 18 years old, in most states — or older 
  • You must have a debt-to-income ratio low enough that you can afford your monthly loan payments

 

2. Consider asking a cosigner for help

When you apply for a refinancing loan, the lender will perform a credit check. If you don’t have an extensive credit history, or if your credit score is too low, you may not be able to qualify for a loan on your own, or you may not qualify for a competitive interest rate. 

 

However, there is a workaround — you can add a cosigner to your loan application. A cosigner is a parent, relative, or friend with good credit who signs the loan application and assumes responsibility for the loan if you fall behind on the payments. Having a cosigner increases your odds of the lender approving you for a loan and qualifying for a lower rate. 

 

3. Get a rate quote

To find out what kind of loan terms you can get, use ELFI’s Find My Rate tool. By entering basic information about yourself, you’ll get an estimated rate in just a few minutes without affecting your credit score.* 

 

You can see how different factors, like loan term and choosing a variable or fixed interest rate, can affect your monthly payment and total repayment amount. 

 

4. Gather documentation

Once you find a loan that works for your budget, you can move forward with the loan documentation. To speed up the process, make sure you have the following documents on hand: 

  • Recent pay stub or proof of employment
  • W-2 forms
  • Tax returns (if self-employed)
  • Government-issued ID, such as a driver’s license
  • Loan account information, such as loan servicer name and account number
  • Current loan billing statement or payoff letter

 

5. Submit your loan application

To complete the application, you’ll have to enter personal information about yourself, including your address, birthdate, and Social Security number. You’ll also have to include information about your employer and income. 

 

Once you submit the application, ELFI’s team will review the form and contact you with either an approval or denial. Until the loan is approved and disbursed, continue making payments to avoid late fees and penalties. 

 

6 other options for managing your loans

While student loan refinancing can be a smart way to pay down your loan balance and save money, it may not be right for you. If you decide against refinancing your education debt, there are alternative strategies for managing your loans. 

 

1. Nurse Corps Loan Repayment Program

Under the Nurse Corps Loan Repayment Program, the Health Resources and Services Administration (HRSA) will pay up to 85% of your unpaid nursing education debt. In exchange, you must commit to working for at least two years in a critical shortage facility or serve as nurse faculty in an eligible school of nursing. For more information, visit the HRSA website

 

2. Public Service Loan Forgiveness (PSLF)

If you work for the government or a non-profit organization, such as some hospitals, you may be eligible for loan forgiveness through PSLF. Under PSLF, the government will forgive your federal loans after you work for an eligible employer for ten years while making 120 qualifying monthly payments. 

 

To find out if your employment and loans are eligible for loan forgiveness, use the PSLF Help Tool

 

3. State student loan repayment assistance programs

To recruit nurses to work in areas with shortages of healthcare workers, some states offer student loan repayment assistance programs in return for work commitments. 

 

For example, registered nurses in Kentucky can receive up to $20,000 in tax-free loan repayment assistance if they agree to work for two years at a location in a rural and underserved area. 

 

In Florida, nurses can receive up to $4,000 for every year they work at a designated employment site or facility. Eligible nurses can participate in the program for up to four years, and get up to $16,000 in loan repayment assistance. 

 

To find out if your state offers a similar program, visit your state’s department of health or education websites. 

 

4. Income-driven repayment plans

If you took out federal student loans to pay for your undergraduate or graduate degrees and can’t afford your current monthly payments, you might be eligible for an income-driven repayment (IDR) plan. With an IDR plan, your loan servicer will extend your repayment term and base your payment on your family size and discretionary income. 

 

Federal loan borrowers can apply for an IDR plan online. 

 

5. Use your sign-on bonus to make extra payments

Depending on your location, you may be eligible for a sign-on bonus. In some areas, nurses are in high demand, and understaffed hospitals and healthcare companies offer sign-on bonuses to attract talented nurses to work for them. You could qualify for a bonus of $10,000 or more on top of your regular salary. 

 

According to AdventHealth, a major hospital network, sign-on bonuses for nurses aren’t usually issued as upfront payments. Instead, they’re broken up into installments over a service period, such as four payments over two years. But if you use those payments to make extra payments on your student loans, you can save money on interest and pay off your debt early. 

 

You can find nursing jobs that offer sign-on bonuses on Indeed

 

6. The Student Loan Forgiveness for Frontline Health Workers Act

On May 5, 2020, Rep. Carolyn Maloney, a Democrat in New York,introduced the Student Loan Forgiveness for Frontline Health Workers Act. If passed, this bill would discharge all federal and private loans belonging to healthcare workers who interacted with COVID-19 patients, including doctors, nurses, and technicians. 

 

The bill’s future is unclear, but it does signal that there is growing pressure on lawmakers to help healthcare workers — especially those on the frontlines of the pandemic — pay down their student loan debt. 

 

Repaying your student loans

As a nurse, your career is taxing enough; don’t let your student loans weigh you down. Student loan refinancing can give you significant relief from your debt. You can save money, pay off your debt, and even lower your monthly payment. 

 

To find out how much you can save, use the student loan refinance calculator.*

 


 

*Subject to credit approval. Terms and conditions apply.  

 

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2020-10-28
Refinancing Private Student Loans

Many individuals take out private student loans to finance their undergraduate or graduate school education. Once they have obtained their respective degrees and graduated, student loan payments will begin coming due, typically following a grace period. While many individuals will pay their student loans to their original lender with the same interest rates and terms as when they obtained their loans, many choose to refinance their private student loans to reduce their monthly payment, save on interest, or pay off their loans faster.   Refinancing private student loans is the process of taking a new loan out with a private lender, often with a different interest rate and loan term. This page will provide an overview of refinancing private student loans to help you determine whether you should consider it.  

Should I Refinance Private Student Loans?

Refinancing private student loans is very similar to the process of consolidating student loans, which is when you combine multiple student loans into one loan with a weighted average interest rate. However, there are several potential benefits of refinancing private student loans that student loan consolidation does not offer. Here are a few of the
benefits of student loan refinancing.  

Lower Private Student Loan Refinancing Rates

Above all, the primary benefit of refinancing student loans is the potential to save money by lowering your interest rate. When you graduated from your respective program, the interest rates on your private student loans may have been higher than what private lenders currently offer to refinance student loans.   For example, if you took our $50,000 in private student loans at a 6.0% interest rate for a 20-year term, your monthly payment would be $358.22 per month, and you would pay a total of $85,971.73 over your loan term if all payments were made on time, with approximately $35,971.73 of that total being paid on interest alone. If you refinanced your $50,000 private student loans to the 20-year term with a 4.5% interest rate, your monthly payment would drop to $316.32 and you would pay just $75,917.93 over your loan term, with approximately $25,917.93 of that total being paid in interest. You would save $41.90 per month and $10,053.80 in interest costs.   The interest rate that is offered to you depends on a variety of factors that are typical when taking out a loan, such as your credit score, credit history, debt-to-income ratio, among other factors. Raising your credit score 50 or 100 points could make a considerable impact on how much you could save by refinancing private student loans. See how much you could potentially save by using our student loan refinancing calculator.*  

Adjusting Your Repayment Terms

In addition to lowering your interest rate, refinancing private student loans also allows you to adjust the length of your loan term to fit your goals and budget. Typically, shorter loan terms come with lower interest rates, allowing you to save on interest over your loan term, while longer loan terms come with slightly higher rates, but allow you to save on your monthly payments. Here are three ways that adjusting your repayment can help you better manage your student loans.
  • Simplify repayment by combining loans. When you refinance your private student loans, you can consolidate or combine multiple loans into a single loan with a single monthly payment. This can help you better track your total loan balance and get a clearer look at your repayment timeline.
  • Extend your loan term to save on monthly payments. By extending your loan term, you can spread out your payments over a longer period of time, often allowing you to reduce the amount you pay monthly. Having this extra cash can allow you to use that money for other financial goals, such as saving for retirement or purchasing a home.
  • Shorten your loan term to save on interest and pay off your loan faster. Oppositely of extending your loan term, shortening your loan term can often allow you to lower your interest rate and will shorten the amount of time that interest accrues, allowing you to save on interest and pay off your loans faster.
 

Choosing a New Lender

Another benefit of refinancing private student loans is the opportunity to switch to a new lender who may have additional benefits, such as forbearance options in the case of financial hardship or superior customer service. For example, with Education Loan Finance, if you are unable to repay your loan because of financial hardship or medical difficulty, Education Loan Finance may grant forbearance for up to 12 months. Additionally, Education Loan Finance offers superior customer service in the form of readily available Personal Loan Advisors who can help you through each step of the refinancing process and guide you toward the right repayment plan. Keep in mind that refinancing student loans for the sole purpose of switching lenders may not be the best decision, especially if it costs you money. If you're interested in refinancing student loans, learn more about Education Loan Finance.  

Reasons Not to Refinance Private Student Loans

Refinancing private student loans can be beneficial to many people, however, there are certain circumstances in which this may not be the case. It's important to understand whether refinancing private student loans will help you save on your student loans or pay them off faster.   For example, if you attempt to refinance private student loans and the interest rate you qualify for doesn't either help you save in total interest paid, nor helps you lower your monthly payments, you may want to wait some time and improve your borrowing credentials before refinancing. In some situations, even if you are able to lower your monthly payments, but will be paying a significant amount more in total interest costs, you may want to consider if it's the best solution. Likewise, if you are saving in total interest, but your monthly payment will be unmanageable, you may be at risk of missing payments or, even worse, defaulting on your loan. Additionally, refinancing with a new lender may cost you certain benefits that your current lender offers.  

Consolidating Private Student Loans vs Refinancing

When you are attempting to adjust your student loan repayment terms, you may come across student loan consolidation options. While student loan refinancing and consolidation are similar in that you are combining multiple loans into one loan with a single lender, the two are not exactly the same. Learn more about the difference between student loan consolidation vs. refinancing.  

Can I Refinance My Private Student Loans?

Anyone with private student loans can refinance them as long as they qualify by meeting a private lender's specific eligibility requirements for refinancing student loans.   For example, in order to refinance with Education Loan Finance*, you must meet the following criteria at a minimum:
  • be a U.S. citizen or permanent resident alien without conditions and with proper evidence of eligibility.
  • be at the age of majority or older at the time of loan application.
  • have a minimum loan amount of $15,000.
  • have earned a Bachelor’s degree or higher.
  • have a minimum income of $35,000.
  • have a minimum credit score of 680.
  • have a minimum credit history of 36 months.
  • have received a degree from an approved post-secondary institution and program of study.
  In conclusion, refinancing private student loans can be very helpful to individuals who qualify and are interested in saving money in interest or lowering their monthly payments. Learn more about student loan refinancing with ELFI to see if it's right for you.
2020-10-20
Engineering School Student Loan Refinancing

Student loan refinancing is a fantastic option in many high-earning professions, and engineering is no exception. Most engineering students pursue bachelor’s degrees, and the average engineer’s student debt falls roughly in line with the national average of $35,173.    While engineers work hard to earn their degrees, the payoff is oh, so worthwhile. The average entry-level salary for engineers is $57,506, and the average salary across all experience levels is $79,000. This varies by the type of engineering you choose, as well. Big data engineers are among the highest-paid in 2020, with a median salary of $155,000.   Engineering students are often top candidates for student loan refinancing because of their low debt-to-income ratios. Here are a few more things you should consider refinancing your engineering student loans:  

Benefits of Student Loan Refinancing for Engineers

Student loan refinancing is a strategy that can help engineers better manage and pay off debt. When you refinance your engineering student loans, a private lender will “purchase” your debt from your original lenders. You can request rate quotes from several different lenders, then refinance with the one that offers you the most competitive rate. Decreasing your interest rate means you’ll pay less over the life of the loan.   Here are just a few of the benefits of student loan refinancing for engineers:
  • Ability to consolidate student loans into one monthly payment
  • Option to choose between fixed and variable student loan refinancing interest rates 
  • Chance to earn a lower interest rate, potentially lower than federal student loans 
  • Opportunity to change your student loan repayment term
  To see how much you could save by refinancing your engineering student loans with Education Loan Finance, try our Student Loan Refinance Calculator.*  

How to Refinance Engineering Student Loans

Refinancing your student loans is normally a quick and simple process, and you can apply in minutes at home. If you’re curious about the process of refinancing, take a look at our student loan refinancing guide.   Researching lenders has very few downsides. Most lenders prequalify applicants using a soft credit check, which won’t hurt your credit score. Just know that before you can officially refinance your loans, your lender will likely need to do a hard credit check.   Here are the next steps to take if you’re thinking about refinancing your engineering student loans:
  • Figure out which how much or which loans you’d like to refinance. 
  • Make sure you meet student loan refinancing eligibility requirements.
  • Shop around and compare pre-qualified rates from multiple lenders. 
  • Submit an application to refinance your student loans 
  • Finalize the loan application by reviewing the loan terms & signing the documents provided by the lender. 
 

Alternatives to Pay Off Engineering Student Loans

If student loan refinancing doesn’t seem like the right fit, you have plenty of alternatives to explore. From student loan assistance to student loan forgiveness, engineers may qualify for a variety of repayment options.  

Student Loan Forgiveness for Engineers

  Select engineers may qualify for Public Service Loan Forgiveness (PSLF). If you do qualify, you’ll make payments for a specified amount of time, normally 10 years, then the remaining balance will be forgiven. You will, however, still have to pay taxes on the forgiven amount.   Here are a few ways in which engineers may qualify for Public Service Loan Forgiveness:
  • Working in areas of national need could provide up to $10,000 in loan forgiveness over five years of service
  • Working for a non-profit, government agency, or other eligible employers could provide loan forgiveness after 120 payments (10 years)
  • Working as a teacher could provide up to $17,500 in loan forgiveness if working at a low-income school or other eligible agencies
  If you aren’t sure which is right for you, research student loan refinancing vs. PSLF. While both may help decrease your debt, it’s important to know how they compare before taking the next steps.  

Income-Based Repayment Plans

If you don’t qualify for Public Service Loan Forgiveness, you may also choose to pursue an income-based repayment plan. These types of plans set a monthly payment as a percentage of your income. Income-based repayment may be a good fit for entry-level engineers who are still working toward higher salaries.   Here are a few types of income-based repayment plans available to engineers:
  • Pay-as-You-Earn (PAYE): PAYE plans are based on a percentage of your adjusted gross income and family size. They are available to individuals who borrowed after 10/1/2007, or those who received eligible Direct Loan disbursements after 10/1/2011.
  • Revised Pay-As-You-Earn (REPAYE): REPAYE plans are similar to PAYE plans, but do not have date restrictions on the loans. They do take your state of residence into consideration, however.
  • Income-Based Repayment (IBR): IBR plans require you to be experiencing financial hardship. If you qualify, they are based on a percentage of your adjusted gross income and family size.
  • Income-Contingent Repayment (ICR): Many individuals who can’t qualify for PAYE or IBR plans apply for ICR. These start as a percentage of your adjusted gross income, then grow as your income grows.
 

State Student Loan Assistance Programs

Engineers are highly valued in the professional world. Some states and private organizations have created student loan repayment assistance programs for STEM professionals, with the goal of encouraging students to pursue these careers.   If you’re an engineer looking for student loan assistance, here are a few examples of state-driven programs you may be eligible for:
  • Harold Arnold Foundation
  • Wavemaker Fellowship
  • North Dakota DEAL Loans
 

Employer Student Loan Repayment Assistance Programs

Some employers provide student loan repayment assistance as a job benefit, which operates similarly to a 401(k). You designate a certain dollar amount to your student loan payments each month, and your employer matches your contribution up to a cap amount. These types of benefits can help improve employee retention rates while supplying necessary financial aid.  

Refinance Your Engineering Student Loans with ELFI

If you’re ready to refinance your engineering student loans, ELFI can help. By refinancing your engineering student loans with ELFI, you’ll enjoy benefits including:
  • No application fees 
  • No origination fees
  • No penalty for paying loans off early
  • If approved for refinancing, ELFI has a referral bonus program
  Ready to get started? Learn more about student loan refinancing with ELFI and apply today: https://www.elfi.com/student-loan-refinancing/.*  
  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.   *Subject to credit approval. Terms and conditions apply.
Woman struggling with student loan refinancing misconceptions
2020-10-16
7 Common Student Loan Refinancing Misconceptions

Refinancing is kind of like leveling up. After months or even years of working hard to become debt-free, you then gain access to a higher tier of borrowing - better terms, a lower interest rate or a smaller monthly payment. Many people have misconceptions about student loan refinancing, however, which keep them from taking advantage of the benefits that student loan refinancing has to offer.   If you're new to borrowing, it's easy to get scared of changing anything about your loan repayment process - even if that means losing out on the money that refinancing can save you. Here are some of the most common student loan refinancing myths - and what you need to know instead.  

Refinancing Student Loans Takes Too Long

Don't fall prey to the misconception that student loan refinancing is a lengthy, tedious process. In fact, refinancing student loans is usually very straightforward. You fill out an application and wait a couple of days for the lender to run your credit report and verify your personal information. Once that’s been completed, you’ll be presented with the refinance offers you qualify for.   The total length of time from beginning to end should take a couple of weeks. This also depends on how quickly you respond to questions from the lender and provide any additional forms or information they request.  

Student Loan Refinancing Has Expensive Upfront Costs

Unlike mortgage refinancing, student loan refinancing has no upfront costs like application or origination fees. That’s also why there’s no downside to applying for a student loan refinancing multiple times.   Plus, most lenders don’t charge a prepayment penalty, which is a fee for repaying the loan ahead of schedule. The only fee you’ll pay is the stated interest rate. You may owe a late fee if you make a payment after the due date, but that can be avoided if you set up automatic payments.  

You Need a High Income to Refinance Student Loans

While some lenders require that borrowers have a high income to qualify for student loan refinancing, others are more lenient. All lenders, however, care about the debt-to-income (DTI) ratio, which is your monthly debt payments divided by your gross income. Most lenders want a DTI percentage below 50%.   To calculate your DTI, add up your monthly debt payments including mortgage, car loan, personal loan, credit card payment and any other loans. Include a rent payment if you don't own your property. Then, divide that total figure by your gross or pre-tax monthly income.   If your DTI is below 50%, then you’re likely a good student loan refinancing candidate. If it’s higher, then you need to increase your income, decrease your monthly housing payment or pay down some of your debts  

You Need a Perfect Credit Score to Refinance Student Loans

Another misconception about student loan refinancing is that you need an excellent credit score to qualify, but lenders often accept borrowers with credit scores as low as 660. This is great news for young borrowers who haven’t built a strong credit history yet, or who ran up some credit card debt in college.   What may hurt your chances of being approved are any recent late payments, bankruptcies, defaults, liens or recent applications for other loans or lines of credit. Before applying to refinance your student loans, check your official credit report at AnnualCreditReport.com.   About one in five people have a mistake on their credit report, which can lead to an application being denied. Look at your credit report from all three credit bureaus - Experian, Equifax and TransUnion - and make sure you recognize all the accounts.   If you notice a mistake, file a dispute directly with each of the credit bureaus. It may take a few weeks to have it removed from your credit report. Make sure to follow up and verify that it’s been deleted.   You can check your credit score for free through a bank or credit card provider, or a service like Credit Karma. If your score is 660 or higher, you can feel free to apply for student loan refinancing.   You can increase your shot of being approved by applying with a cosigner. A co-signer is someone who agrees to assume legal liability for your debt if you stop making payments and default. The loan will also show up on the cosigner’s credit report.   Even if you can be approved to refinance by yourself, you may receive lower interest rates if you apply with a cosigner.  

You Can Only Refinance Once

A common misconception is that you have only one opportunity to refinance your student loans. In reality, however, there’s no limit on how many times you can refinance. Many choose to refinance every time the Federal Reserve decreases interest rates because they can get a better deal on their student loans.   The only thing that might affect how often you can refinance is your credit score. If your credit dips below a certain threshold, then a lender may not approve your application. Also, you may be denied if you lose your job or your income drastically plummets.  

You Refinance All Your Student Loans

Many borrowers have a mix of federal and private student loans and assume they have to refinance all those loans at the same time.   But borrowers can choose to refinance the loans they want. They can keep their federal loans as they are and only refinance their private loans. If they have a private loan with a low interest rate and one with a high interest rate, they can choose to only refinance the latter.   In some cases, borrowers may have a better chance of being approved if they only refinance some of their loans instead of all of them.  

Student Loan Refinancing is a Confusing Process

When you apply to refinance with ELFI, you’ll be matched to a member of the Personal Loan Advisor team. Every time you call ELFI, you can speak to that same person. This minimizes the confusion and frustration involved with the refinancing process.   As of 10/19/2020, ELFI has a 4.9 rating on Trustpilot with more than 1,200 reviews. More than 90% of those are five-star reviews. ELFI also has an A+ rating from the Better Business Bureau.  
  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.