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Student Loan Refinancing

A Physical Therapist’s Guide to Student Loan Refinancing

July 30, 2020

As a physical therapist, you play a critical role in people’s lives. You help them manage their pain, improve their range of motion, and recover from serious injuries. It’s a serious profession that requires specialized education, so it’s no wonder that its job outlook is expected to grow much faster than the typical career. 

 

By Kat Tretina

 

According to the U.S. Bureau of Labor Statistics, physical therapists’ median salary is $89,440, far higher than the national median wage for all occupations. However, debt is a major problem for new physical therapists since the field requires advanced degrees and professional licenses. 

 

The American Physical Therapy Association reported that nine out of ten physical therapy graduates have education-related debt, with an average balance of $116,000. Graduate and professional degree loans tend to have high interest rates. But since you have a higher-than-average income, you’re a prime candidate for student loan refinancing. 

 

Why student loan refinancing makes sense for physical therapists

While student loan refinancing* can be an effective tool for managing debt for many borrowers, it can be especially useful for physical therapists for the following reasons. 

 

1. You may not qualify for loan forgiveness

With Public Service Loan Forgiveness (PSLF), federal loan borrowers can qualify for loan forgiveness if they work for an eligible non-profit for 10 years while making 120 monthly payments under a qualifying payment plan.

 

While some physical therapists work for non-profit organizations or hospitals, many choose to work in private practice because it may offer more earning potential. 

 

If you work for a private practice, you aren’t eligible for PSLF. Refinancing your loans would cause you to lose your eligibility for PSLF, but if you’re in private practice and ineligible for it anyway, that’s not a drawback you have to consider. 

 

2. You likely had to take out private student loans

With such an expensive degree, you likely hit the borrowing cap on Direct Unsubsidized Loans and had to take out PLUS Loans, which have higher interest rates, or you used private student loans to finance your education. 

 

With private loans, you don’t have access to benefits like loan forgiveness or income-driven repayment plans. When you refinance private loans, you won’t lose any federal benefits. In fact, you may even get a servicer that offers more benefits. For example, ELFI offers forbearance for up to 12 months for borrowers facing financial hardships. 

 

3. You may have high-interest debt

Graduate and professional degree loans tend to have the highest interest rates. For example, Grad PLUS Loans issued before July 1, 2020, had an interest rate of 7.08%. Over time, that high rate can cause you to pay thousands more than you initially borrowed. 

 

Benefits of refinancing your debt

As a physical therapist, there are many advantages to refinancing your student loans. 

 

1. You can save money

Since you likely have a substantial amount of student loan debt, you can save a significant amount of money by refinancing your loans. If you have good credit, or a cosigner willing to apply for a loan with you, you can qualify for a loan with a lower interest rate. Over time, that lower rate will allow you to save thousands of dollars. 

 

For example, let’s say you graduated with $116,000 in PLUS Loans at 7.08% interest and a 10-year repayment term. By the end of your repayment term, you will repay $46,198 in interest charges on top of what you originally borrowed. 

 

If you refinanced your loans and qualified for a 10-year loan at 4.75% interest, you’d pay just $29,948 in interest charges. By refinancing your student loans, you’d save $16,249 over the life of your loans. 

 

chart displaying original vs. refinanced loan

 

Use the student loan refinance calculator to find out how much you could save by refinancing your loans with ELFI.* 

 

2. You can pay off your student loans sooner

When you refinance your loans, you can choose a new loan term. In general, the lowest interest rates are reserved for shorter loan terms. If you want the lowest rate possible, opt for a rate of five or seven years rather than ten, 15, or 20 years. 

 

With a shorter term and a lower rate, you’ll save more money over your repayment term. And, you’ll be out of debt years earlier. With your loans paid off, you’ll be free to pursue your other financial goals, like saving for a house or boosting your retirement nest egg. 

 

3. You can reduce your monthly payments

If you refinance your loans and qualify for a lower interest rate or extend your repayment term, you can significantly reduce your minimum monthly payment. If you’re struggling to make ends meet right now, especially when you’re just starting out in your career, the ability to get a smaller payment can be a significant relief. It can give you some breathing room in your budget for rent or other necessities.

 

As your career progresses and you get more financially secure, you make extra payments on your loans. Or, you can even pay them off early without a prepayment penalty. 

 

Managing your student loan debt

For a physical therapist, student loan refinancing can be a smart strategy for tackling debt. You likely had to take on six-figures of student loan debt to pay for school, so refinancing your loans can help you secure a lower rate and save money over time. You can use ELFI’s Find My Rate tool to get a quote without affecting your credit score.*

 


 

*Subject to credit approval.

 

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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pharmacist smiling after refinancing student loans
2020-08-06
A Pharmacist’s Guide to Student Loan Refinancing

Becoming a pharmacist can be a lucrative career decision. However, it requires a significant amount of education. According to the U.S. Bureau of Labor Statistics, the typical entry-level education requirement for pharmacists is a doctoral or professional degree. To get the necessary degrees, you likely borrowed a significant amount of money. In fact,  the Pharmacy Times reported that the average student loan debt for pharmacists is over $163,000.    By Kat Tretina   Despite the hefty student loan burden, your career path comes with high earning potential. As of 2018, the median salary was $126,120 per year. With such a large income, student loan refinancing is a smart strategy, especially if you work in the private sector.   

Why you should refinance pharmacy school loans

If you work in the private sector as a pharmacist — meaning you work for a pharmacy like Walgreens or CVS rather than a non-profit hospital or health organization — you’re ineligible for Public Service Loan Forgiveness, even if you have federal student loans. If you have high-interest student loan debt, that means you’re a prime candidate for student loan refinancing.    Student loans for graduate and doctoral degrees tend to have the highest interest rates of any education loan. Even Grad PLUS Loans, a form of federal loan, have sky-high interest rates. For loans disbursed after July 1, 2019, and before July 1, 2020, the interest rate is a whopping 7.08%. With such a high rate, your loan balance can quickly balloon out of control.    With student loan refinancing, you take out a loan from a lender like ELFI* for the amount of your combined existing debt. The new loan has completely different repayment terms, such as length of repayment and interest rate. Your old loans are consolidated together, so now you’ll have just one loan and one easy monthly payment.   

Benefits of refinancing pharmacy school loans

There are two main benefits to student loan refinancing  

1. You can save money

With a pharmacist’s salary and good credit, you could qualify for a lower interest rate when you refinance your debt, allowing you to save a significant amount of money.    For example, let’s say you had $163,000 in student loan debt at 7.08% interest and a 10-year repayment term. Over the course of your repayment, you’d pay back a total of $227,915; interest charges would add $64,915 to your loan cost.    But let’s say you refinanced your debt and qualified for a 10-year loan at just 5% interest. You’d pay back a total of just $207,464. Refinancing your loans would allow you to save $20,451.    Use the student loan refinance calculator to find out how much money you can save.*   

2. You can reduce your monthly payment

If you have a large amount of student loan debt, your monthly payments may be more than you can afford. If that’s the case, student loan refinancing can help make your payments more affordable.    When you refinance your debt, you can opt for a longer repayment term. With a longer term, you may pay more in interest, but the tradeoff may be worth it to give yourself more breathing room with your cash flow.    Let’s say you had $163,000 in student loan debt with a 10-year repayment term. At 7.08% interest, your minimum monthly payment would be a whopping $1,899 per month. If you didn’t qualify for a lower interest rate, but extended your repayment term to 15 years, you’d reduce your monthly payment to just $1,472 per month, freeing up $427 from your budget.  

How to refinance pharmacy school loans

To refinance your loans, follow these four simple steps:   

1. Find out if you meet the eligibility requirements

Each refinancing lender has its own eligibility criteria. At Education Loan Finance, borrowers need to meet the following requirements: 
  • Must be a U.S. citizen or permanent resident
  • Must have at least $15,000 in student loans
  • Must have a bachelor’s degree or higher
  • Must have a minimum income of $35,000
  • Must have a credit score of at least 680
  • Must have a minimum credit history of 36 months
  • Must have received a degree from an approved post-secondary institution
 

2. Ask a friend or relative to cosign the loan

If you don’t meet the minimum credit or income requirements, consider asking a friend or relative with good credit and reliable income to cosign the loan application with you. A cosigner shares responsibility for the loan with you, lessening the lender’s risk. Having a cosigner on the application increases your chances of getting approved and qualifying for a lower interest rate than if you applied on your own.   

3. Request a loan estimate

Before submitting a loan application, get an estimate so you know what interest rate and loan term to expect. With ELFI, you can get a rate quote without affecting your credit score so you can select the right loan that works for you.*   

4. Submit your loan application

Once you find a loan that matches your needs, you can complete the loan application. You’ll be asked to enter information about yourself, including your name, address, Social Security number, employer, income, and current loans.   

4 other options for managing your loans

While student loan refinancing can be a smart idea for pharmacists, it’s not for everyone, especially if you don’t work in the private sector. If you decide against refinancing your loans, you may be able to get some help with your student loan debt in the form of loan forgiveness, reduced payments, or repayment assistance.   

1. Income-driven repayment plans

If you have federal student loans and can’t afford your payments, you may eligible for at least one of the four income-driven repayment (IDR) plans. Under these plans, the federal government extends your loan term to 20 to 25 years and caps your monthly payments at a percentage of your discretionary income. Depending on the repayment plan, your income, and your family size, you could significantly reduce your monthly payment. Some borrowers even qualify for $0 payments.   

2. Public Service Loan Forgiveness

If you have federal Direct student loans and work for a government agency or non-profit organization, you may qualify for loan forgiveness through Public Service Loan Forgiveness (PSLF). With PSLF, the government will forgive the remaining loan balance after you work for an eligible employer for 10 years and make 120 qualifying payments.   

3. Substance Use Disorder Workforce Loan Repayment Program

The National Health Service Corps (NHSC) operates the Substance Use Disorder Workforce Loan Repayment Program. Under this program, eligible pharmacists can receive up to $100,000 in student loan repayment assistance. In exchange, you have to make a service commitment to work in a substance use disorder site with a health professional shortage area as designated by the NHSC. For more information, visit the NHSC website  

4. National Institutes of Health Loan Repayment Program

Highly qualified pharmacists willing to commit to biomedical or biobehavioral research careers can receive up to $50,000 in student loan repayment assistance. In return, you must commit to working in a research area in an approved subject. Visit the National Institutes of Health website for more information.   

Repaying your student loans

If you’re a pharmacist with education debt, you should know that you’re an excellent candidate for student loan refinancing. Whether you want to save money or lower your monthly payments, refinancing your loans can help you achieve your goals.*   
  *Subject to credit approval. Terms and conditions apply.   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.
young woman researching student loan refinancing requirements
2020-08-03
Income, Credit Score, and Credit History: Which is Keeping You From Refinancing?

If your goal is to become debt-free as quickly as possible, student loan refinancing can be a powerful tool for managing your loans. ELFI customers reported that they save an average of $272 per month, and should see an average of $13,940 in total savings after refinancing their loans with Education Loan Finance.1   By Kat Tretina   Unfortunately, not everyone qualifies for refinancing the first time they apply. When you submit your loan application, refinancing lenders look at your income, credit score, and credit history to determine whether to issue you a loan. If you don’t meet their requirements in just one area, the lenders will deny your application.    If you aren’t quite eligible for refinancing quite yet, here’s what you can do to improve your application so you can get approved in a few months — and qualify for a lower interest rate.  

Student Loan Refinancing Requirements

Borrower requirements can vary from lender to lender, and some lenders are very vague about their refinancing criteria. However, ELFI is different and has transparent eligibility guidelines.    To qualify for student loan refinancing with ELFI, you must meet the following
student loan refinancing* requirements:
    • You must be a U.S. citizen or permanent resident
    • You must be the age of majority or older 
    • You must have at least $15,000 in student loans to refinance
    • You must have a bachelor’s degree or higher
    • You must have a minimum income of $35,000
    • You must have a minimum credit score of 680
    • You must have a minimum credit history of 36 months
    • Your degree must come from an approved post-secondary institution and program of study
 

Tips for Improving Credit Score

ELFI’s minimum credit score for refinancing applicants is 680. If your score is less than that, you’re not alone. According to Experian, about 33% of Americans have a credit score under 670. However, that doesn’t mean you’re stuck with a poor credit score. By making some changes, you can boost your credit.    To improve your score, use these tips:   
  • Make all of your monthly payments on time: Your payment history makes up 35% of your credit score. To raise your credit, pay all of your bills and minimum loan payments on time. When possible, sign up for automatic payments to minimize the risk of missing payments. 
  • Sign up for Experian Boost: Experian Boost is a free service you can use to get credit for your cell phone and utility payments. On average, users who sign up improve their credit scores by 13 points. 
  • Keep your credit card balances low: Your credit utilization — or how much of your available debt you use — accounts for 30% of your credit score. Pay down existing debt and use your credit cards sparingly to bring up your score. 
  • Don’t open new credit accounts: Every time you open up new accounts, your credit score will drop. New credit makes up 10% of your credit score, so only open up a new account when you really need it. 
  • Review your credit report and dispute errors: Review your credit report for free at AnnualCreditReport.com and look for errors, such as fraudulent accounts opened under your name. If you see any issues, dispute them with the credit bureaus and have them removed from your credit report. 
   

How to Increase Income

If you’re a recent college graduate, your income may be less than the minimum required for student loan refinancing. To boost your earnings, consider these strategies:   
  • Ask for a raise: If you’ve been at your job for over a year or more and have done good work and received positive feedback, it may be time to ask for a raise. The average raise is 3.3%, which could give you the additional income you need to qualify for a loan. 
  • Learn new skills: If a raise isn’t possible due to the economy or because your company isn’t performing well, try to learn new skills that would allow you to secure a promotion or a new position at another company. 
  • Take on consulting work: If you have some extra time, consult or freelance on a part-time basis for additional income. For example, you could lend your social media expertise to startups, design marketing plans for entrepreneurs, or do graphic design work for local businesses. 
   

How to Build Credit History

If you don’t have a lengthy credit history, it can be difficult to qualify for a loan. To start building your credit history, follow these steps:   
  • Ask a friend or relative to add you as an authorized user to their credit card account: If you have a parent, relative, or friend with good to excellent credit, ask them if they will add you as an authorized user to their credit card account. When you become an authorized user, you get access to their credit history and credit line, instantly lengthening your own credit history. Just make sure you set guidelines on how the credit card should be used and how you’ll repay them for any purchases. 
  • Apply for a credit builder loan: With credit builder loans, you take out a loan, and it’s held for you in a savings account. You make payments toward the loan each month. After the loan is paid off, the lender releases the money to you, so it can help you build your savings, as well. Many financial institutions offer credit builder loans.
  • Open a secured credit card account: Without an established credit history, you may not qualify for a traditional credit card, but you can get a secured credit card account. With a secured card, you put down a security deposit that serves as your credit limit. As you make payments, your payment history is reported to the credit bureaus, establishing your credit and improving your credit score. 
   

Refinancing Your Student Loans

Improving your credit history, boosting your credit scores, and increasing your income can take time. But within six to 12 months, you can see results and meet ELFI’s refinancing requirements. By refinancing your loans, you can save money and pay off your debt ahead of schedule.    When you’re ready, you can get a rate quote without affecting your credit score.*  
  1Average savings calculations are based on information provided by SouthEast Bank/ Education Loan Finance customers who refinanced their student loans between 2/7/2020 and 2/21/2020. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon a number of factors.   *Subject to credit approval. Terms and conditions apply.   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.
woman reading new about student loans
2020-07-31
This Week in Student Loans: July 31, 2020

Please note: Education Loan Finance does not endorse or take positions on any political matters that are mentioned. Our weekly summary is for informational purposes only and is solely intended to bring relevant news to our readers.

  This week in student loans:
white house

Trump: Student Loans May Be Suspended For “Additional Periods Of Time”

With a second stimulus package on the way, Trump has stated that student loan suspensions may be extended past the already in place deadline.  

Source: Forbes

 

GOP Coronavirus Relief Proposal

Here’s How the Latest GOP Coronavirus Relief Proposal Would Impact Student Loans

The GOP has released their coronavirus relief proposal, but experts claim that it is largely ineffective in helping student loan borrowers.  

Source: CNBC

 

student loan servicers

What to Know About Changes Coming to Student Loan Servicing

In an attempt to streamline student loan servicing, the US government has signed contracts with five companies to provide customer service and back-office support to federal student loan borrowers.  

Source: U.S. News & World Report

 

man researching whether to refinance student loans

Should You Refinance Student Loans? What to Consider as Legislators Debate New Stimulus Package

Refinancing rates are incredibly low, but due to the second stimulus package not yet being put in place, student loan borrowers are unsure of when the best time to refinance will be.  

Source: Newsweek

  That wraps things up for this week! Follow us on FacebookInstagramTwitter, or LinkedIn for more news about student loans, refinancing, and achieving financial freedom.  
 

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.