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 […]

How to Ask Your Employer to Help Pay Student Debt

These days, employers offer all kinds of benefits to keep employees, from kombucha on tap and innovative new office spaces to ping pong tables and video game rooms. The list of benefits seems to grow all the time. When you think about it, though, how much do you really need that kombucha on tap? Instead, what many graduates need is help with their ever-mounting student loans. In combination with other methods of dealing with student loan debt, employers can play a valuable role in ensuring their employees’ financial stability. Employers are beginning to recognize this trend, as well. That’s why some have begun to offer help to employees with student loan debt. While an uncommon practice at the moment, some companies now offer options to help employees pay back their student loans. The practice is rapidly becoming more popular, and if you’re lucky, your employer may already offer a student debt relief program. Here are several ways employers are already helping to reduce their employees' student loan debt.

Financial Education

Employers have begun to understand that their own financial success is tied to the financial success of their employees. As a result, some employers have begun to offer financial education opportunities. These opportunities come in many forms, including workshops, webinars and even counseling. While many employees already have a firm grasp on financial concepts, these programs can still be incredibly beneficial to those weighed down by student debt as they often cover lesser-known tactics and reinforce familiar strategies.

Student Loan Repayment Signing Bonuses

Another method of helping employees with student debt is the signing bonus. For example, some companies offer $1,000 towards student loans for new hires. This $1000 can drastically reduce the amount graduates pay in interest over the life of their student loans and is an effective way for companies to hire and keep dedicated, hardworking employees.

Employer Repayment

The most exciting benefit employers are beginning to adopt is direct assistance with student loans. Now, in addition to savvy fiscal advice, some companies are backing up their support with dollars and cents. A few companies now offer yearly bonuses to help pay back student loans. One of the most generous of these companies is Nvidia. Employees earn $6,000 a year towards their student loans up to a $30,000 maximum. Several companies offer comparable or lower amounts. Regardless of the repayment amounts, this innovative strategy provides a new way to fight back against student debt. A variation of this policy is occasionally used, as well. In this variation, employees who don’t take their PTO can trade their PTO days for student loan assistance. With many in the United States not taking their PTO days anyway, this is a compelling option for student loan borrowers.

Contributions to 401(k) Plans

It may seem strange for 401(k) contributions to go hand-in-hand with paying off student debt. You might even expect to have to choose between them. If you’re employed by Abbott Laboratories, though, you don’t have to choose. Employees who contribute at least 2% of their pay toward student loans are eligible for the full 5% employer matching in their 401(k), even if they do not otherwise contribute to their 401(k). Abbott Laboratories is the first company to offer this incentive to help employees to pay off student debt, and hopefully many companies will follow in their footsteps. Sadly, these types of programs are not as commonly offered as they should be, but that isn’t necessarily bad news for you. If student loan assistance programs are something that you would like to see at your company, then make an appointment to speak with either your boss or to human resources. In this day and age, the competition for the best employees is fierce, and employers are always looking for ways to keep employees happy. In some cases, it may even be cheaper than a raise. It’s also worth mentioning your interest in such programs while negotiating your salary and benefits package for a new job. They may include it as an additional benefit. If your employer already provides these benefits, that’s fantastic! You’re already one step closer to being unburdened by student debt. If you're curious about how to finish the job and free yourself from student debt completely, one great way to do that is Student Loan Refinancing. You can learn more here.

2020-08-04

Student Loans: What is the Difference Between a Principal and an Interest Payment?

If you’re planning on going to college, you should be prepared for potentially high costs. The average cost of tuition and fees at a public four-year university for an in-state student is $10,440, while it’s $36,880 at a private school. By Kat Tretina While those numbers are pricey enough on their own, financing can add to the expense. If you borrow money to cover the total cost of attendance, you’ll end up repaying more than you initially borrowed because of interest charges — what lenders charge you in exchange for lending you money. When dealing with student loans, it’s important to understand how student loan interest rates affect your repayment and how your extra payments are applied to your debt.

How Student Loan Interest Rates Affect Your Loan Balance

Student loan interest rates can cause your loan balance to grow over time. The higher the rate, the more interest that accrues. For example, if you took out $30,000 in student loans and qualified for a 10-year loan at 4% interest, you’d pay $6,448 in interest charges on top of the $30,000 you borrowed. But if you qualified for a $30,000 loan at 5% interest — a difference of just 1% — you’d pay $8,184 in interest charges. The extra percentage point would cause you to pay over $1,700 more in interest charges. However, you can cut down on interest payments by paying off your debt ahead of schedule. When you pay off your loans early, less interest accrues over your loan's life, allowing you to save money.

The Difference Between Principal and Interest Payments

When you enter into repayment, your loan payments cover two different aspects:

- Interest: Interest that has accrued to date
- Principal: The original loan amount

When you make a payment, lenders typically apply the payment to any fees first, such as late fees or returned payment fees, then to interest charges. If any money is left over, they will apply the excess to the principal balance.

Education Loan Finance Student Loan Repayment Options

If you take out private student loans from ELFI*, you can choose from the following repayment options:

- Immediate repayment: You make payments toward the principal and interest right after disbursement
  - Best for: You’re working while in school and can afford the payments. You want to pay the least amount of interest possible.
- Interest only: While you’re in school, you make payments that only cover the interest that accrues on the loan.
  - Best for: You can’t afford to make full payments, but you want to minimize interest charges. You’re working part-time or have some income while in school.
- Partial payment: With partial payments, you make a flat-rate payment — typically $25 — while you’re in school.
  - Best for: Money is tight while you’re in school, but you want to chip away at some of the interest that accrues.
- Fully deferred: If you opt for fully deferred repayment, you don’t make any payments at all while you’re in school. This is the most expensive repayment option, as more interest accrues over the life of the loan.
  - Best for: You are in a rigorous academic program and need to completely focus on your studies, so you don’t want to make any payments while in school.

Use the private student loan calculator to see what your payment would be and how much you’d repay over the life of the loan under each repayment plan.*

Student Loan Repayment Strategies to Pay Off Your Debt Faster

Once you graduate, there are ways to accelerate your debt repayment and reduce the amount of interest that accrues.

1. Make Extra Payments

If you want to pay off your debt faster and are thinking about different student loan repayment strategies, consider increasing your minimum monthly payments. More of your payment will go toward the principal each month, reducing how much you’ll pay in interest and allowing you to pay off the debt ahead of schedule. For example, if you had $30,000 in student loans at 5% interest and a 10-year repayment term, your monthly payment would be $318 per month. If you only made the minimum payments, you’d repay a total of $38,192 by the end of your loan term. If you increase your payments to $368 per month — an addition of just $50 per month — you’d pay off your loans 20 months early. And, you’d repay just $36,731. By adjusting your monthly payment, you’d save $1,461.

2. Use the Debt Avalanche or Debt Snowball Methods

If you have multiple student loans, consider using either the debt avalanche or debt snowball method to tackle your debt. With the debt avalanche method, you make extra payments toward the loan with the highest interest rate. With the debt snowball, you target the debt with the lowest balance first. Which is best for you? It depends on your goals and personality. Learn more in our breakdown of the debt snowball and debt avalanche method repayment strategies.

3. Refinance Your Debt

Student loan interest rates have a big impact on your overall repayment. By refinancing your student loans,* you can qualify for a lower interest rate so more of your monthly payment goes toward the principal. Over time, refinancing can help you save a significant amount of money.

The Bottom Line

By understanding how payments work and how student loan interest rates affect your total repayment, you can pick a repayment plan that works for you. If you still have questions, ELFI’s Personal Loan Advisors can walk you through the loan application process and answer any questions you have.*

*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.

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:

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

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

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 Facebook, Instagram, Twitter, or LinkedIn for more news about student loans, refinancing, and achieving financial freedom.

2020-07-30

A Physical Therapist’s Guide to Student Loan Refinancing

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.

2020-07-29

Choosing the Right Student Loan Repayment Term

Choosing the right student loan repayment term will make a huge difference in how much and how long it takes to pay back your student debt. To make this choice, here are a few key questions to consider: • How much student debt do you have? • How much can you afford to pay each month? • What are your long-term financial goals? It’s important to choose a student loan repayment term that fits your lifestyle and allows room for you to continue saving toward major financial goals. Once you’ve answered those questions, you’ll be ready to dive into the details and choose the perfect repayment term!

Key terms: Principal and Interest

In the next sections, we’ll talk a lot about principal and interest. Understanding these terms is vital to choosing the right student loan repayment term. Principal is the original value of the loan. For example, if you take out a loan for $15,000, then your principal amount is exactly $15,000. As you know, however, the total loan amount you’ll repay includes more than the principal amount. Lenders also charge interest as a convenience fee for providing you money when you need it. Your interest is calculated as a percentage of the principal, then added to your payment total. As a rule of thumb, long repayment terms offer lower monthly payments, however, they also generate more total interest. On the reverse side, short repayment terms incur less interest but tend to have higher monthly payments. You can use the ELFI Student Loan Refinance Calculator¹ to estimate different term lengths to see how they will impact the interest on your student loans.

First, decide whether a fixed or variable rate loan is right for you.

Now that you’ve determined your total amount of student debt and your monthly budget for making payments, you can determine whether a fixed or variable rate is right for you. This choice will go together with selecting your student loan repayment term to be sure you’re getting the most value out of your repayment plan. If you have an ELFI Personal Loan Advisor, you can also discuss these options with him or her for expert feedback on your specific financial situation.

Fixed-Rate Loans

A fixed-rate loan means your interest rate will not change for the duration of your student loan repayment term. The rate will remain the same across every payment until your loan is paid back in full. These types of loans are best for borrowers who: 1. Have smaller loans to pay back 2. Are planning to opt for a short-term student loan repayment period The benefit of fixed-rate loans is your interest rate will never rise, and you won’t have any unpleasant surprises when calculating the monthly total for your loans. On the downside, fixed-rate loans often have higher initial interest rates than variable-rate loans. There’s no risk of your interest rate jumping, but also no chance of the rate lowering over time.

Variable-Rate Loans

Variable-rate loans, on the other hand, have interest rates that change over time. Rates are currently based on the London Interbank Offered Rate, or LIBOR. Lenders update their variable interest rates at regular intervals, so while the interest totals themselves will change, the dates they change won’t come as a surprise to borrowers. Variable-rate loans are best for borrowers who: 1. Have larger loan totals to pay back 2. Are planning to opt for a long-term student loan repayment period The benefit of variable-rate loans is that interest rates may decrease over time. If you’re planning to pay back your student loans over a long-term period, like 15 or 20 years, opting for a variable-rate loan may decrease the total interest you pay over the life of the loan.

Then, choose your student loan repayment term.

Short-Term Repayment

Short student loan repayment terms are a fantastic option for borrowers with small student loans who can afford to make higher monthly payments. The benefit of short-term student loans is that they can significantly decrease the total amount of interest paid over time. For example, a $15,000 loan with a 5-year term will have higher monthly payments than the same loan spread out over 10 or 15 years, but it will incur less total interest because you’ll pay down the principal amount more quickly.

Long-Term Repayment

Long-term repayment plans, on the other hand, are perfect for students with large loans who need to decrease their monthly payments. While long-term plans incur more interest over time, they make monthly payments more affordable and easier to handle. For example, if your $15,000 loan is spread out over 20 years, you’ll have much more time to pay down the principal amount. While each payment will incur additional interest, opting for a long student loan repayment term will allow you to repay the loan in a way that fits your monthly budget. It’s important to choose your student loan repayment term based on your budget and total loan amount. Selecting the right term will allow you to repay your loans as quickly and efficiently as possible.

ELFI Student Loan Repayment Options

Refinancing your student loans can be a great way to earn a better interest rate, as well as to change your repayment term. ELFI offers a variety of student loan repayment options, offering both fixed- and variable-rate loans, as well as terms spanning 5 – 20 years.* For more information on how to efficiently repay your student loans, check out ELFI’s blog, “What’s the Best Way to Repay Student Loans.”

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. * 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. ¹Subject to credit approval. Terms and conditions apply.

2020-07-28

How Does Debt-to-Income Ratio Affect Student Loan Refinancing?

Refinancing student loan debt is a great way to save in interest costs over the life of the loan and may help reduce your monthly payment. But before you do so, it is important to know how your finances will affect your refinancing. In order to get a low rate to help improve your savings, you need to meet certain criteria for refinancing. For example, your credit score plays a major role when you are applying for loans. Lenders also look at a number of additional factors when determining whether an applicant will be approved for refinancing, and if so, what rate would be appropriate for them. One factor that affects student loan refinancing is a person’s debt-to-income ratio. Read on to find out how this ratio is calculated and how it can affect refinancing.

What is Debt-to-Income Ratio?

Your debt-to-income ratio is a percentage that determines whether your income can pay for all of your debts, including the new student loan you apply for. The lower the ratio the better because it means you have additional income to cover your debts and other expenses. The debts that will be included in the ratio are mortgage or rent payment, credit card debt, auto loans, child support, alimony, personal loans, and any other financial debts. Your monthly gross income is the amount used in the ratio. Here is an example of how to determine your debt-to-income ratio. If you have a $1,300 mortgage payment, a $350 car loan payment, and a $600 student loan debt payment, your total monthly debt payments add up to $2,250. If your monthly income is $4,000 your debt-to-income ratio is found by dividing your total debt payments by monthly gross income, therefore $2,250/$4000 = 56%. This ratio would indicate to lenders that more than half of your gross income pays for outstanding debts and therefore there may not be much income left to pay other expenses.

Debt-to-Income Impact on Refinancing

Although the exact ratio that lenders prefer for debt-to-income ratio is not disclosed, most lenders will look for a ratio of 50% or less to qualify for refinancing. However, to score the lowest interest rates a much lower ratio may be needed. If you find yourself with a ratio of more than 50%, like the example above, don’t panic. There are ways to improve your ratio to help you qualify for refinancing. You can improve your ratio by:

1. Increasing Your Income:

Yes it is easier said than done, but there are various ways you can try to increase your income.

Overtime - Is overtime an option at your current employer? If so, take advantage of it to earn some extra money. It will not only help you increase your income but you can use the extra money to pay down your debts faster, thereby reducing your ratio.
Ask for a raise - If it has been a while since you have received a raise and you think you have earned one, prepare a document outlining your accomplishments and request a meeting with your boss.
Take on a side hustle - If you are able to fit in additional employment, give it a shot to earn more income.

2. Pay Down More Debt Before Refinancing

If your ratio is too high to qualify for refinancing or does not qualify you for a much lower interest rate, try quickly paying off other debts before applying to refinance student loans. Decreasing your monthly debt obligations will help lower your debt-to-income ratio. Try some of these options to quickly pay down debt.

Start a side hustle - Start working for a grocery shopping service, start an online Etsy shop, walk dogs, babysit, or many other possibilities. Any way you can earn extra money outside of your day job can be put towards your debts.
Sell unused items around your house - Sell clothing online, clear out old books and movies to sell on eBay or Amazon, or have a garage sale.
Use any extra money you receive to pay debts - Think stimulus or tax refund checks, rebates and gift money.
Find money in your budget to pay extra on your lowest debt balance to quickly eliminate that monthly obligation. You may find money in your budget by eliminating restaurant purchases for a couple of months or canceling unused subscription services.

3. Getting a Cosigner

f you are not able to financially qualify on your own, some lenders will allow a cosigner to help with qualifying. A cosigner is a person with a great credit history that will apply for the loan with you to help improve your chances of qualifying for a better rate because of their good finances. Improving your debt-to-income ratio will allow you to qualify for refinancing from more student loan lenders. Some lenders may allow a higher ratio for debt-to-income, for example, 65%, however, their interest rates may be much higher (which may not save you any money) and they may be the only lender you qualify with. This is a drawback since qualifying with more lenders will allow you to have more rates to compare. In addition to qualifying for more potential lenders, improving your ratio will also allow you to qualify for the lower interest rates that lenders offer. If a lender requires a 50% debt-to-income ratio but your ratio is 20%, you could qualify for the lower rates that the lender has than a person with a higher ratio. If you are ready to refinance your student loan debt and want to see how much you may be able to save, check out our Student Loan Refinance Calculator.* Now that you know what your debt-to-income ratio is and how it affects student loan refinancing, you can work to improve your ratio if needed. When you are paying off student loan debt it may seem overwhelming, but taking charge of your finances by paying down debt and refinancing to save in interest costs can help improve your financial future and make it quicker to pay off your debts. Good luck!

2020-07-27

Amazon, Apple, Best Buy, and More: Getting the Most Out of Student Discounts

Student life can be expensive, but the good news is, most businesses are aware of that. Many provide college student discounts and special offers. With the new school year rapidly approaching, now is the time to take advantage of the many deals available to you. With that in mind, we’ve compiled a list of student discounts to help you save some money during college.

Music Streaming Services

If you’re into streaming music, you’re in luck. Many music streaming services provide large discounts to students. Apple Music, Spotify, Youtube Music, and Tidal all offer 50% discounts to students for up to eight semesters. Some subscriptions even offer additional benefits, for example, Spotify provides student members with access to both Hulu and Showtime.

Apple

Apple is currently offering a variety of back to school deals for students or and teachers. Qualifying product purchases, including many models of MacBooks and iPads, come with a free pair of AirPods.

Amazon

Let’s be honest. We all love two-day free shipping. What a wonderful feeling it is to order something and have it delivered to your door in what feels like no time. The good news is, Amazon offers a Prime Student discount. After a six-month free trial, students can access Amazon Prime for $59 a year. In addition to two-day free shipping, a prime student membership includes access to Prime Video and Amazon Prime Music. Canceling a membership is easy, so even if you don’t choose to pay for the membership, it’s worth taking advantage of the six-month free trial.

Best Buy and Other Tech Retailers

If you’re on the market for some new tech, don’t miss Best Buy’s student discount program. From TVs to TI-84s, Best Buy offers student discounts on a variety of products. A number of other tech retailers, including Logitech and Lenovo, also offer student discounts.

Clothing Retailer Discounts

If you’re a fashion icon, these retailers have your back. JCrew, Banana Republic, TopShop, H&M, and many other clothing retailers offer student discounts of around 10%-15%. Retail discounts will occasionally stack with other promotions, as well. For even better deals, check out your local Goodwill, as they, too, often offer student discounts.

Software Discounts

A number of companies provide student discounts on software. For instance, Adobe offers a 60% discount on their Creative Cloud software for students. Github also provides a number of developer tools at discounted student rates. If you’re into producing music, Ableton Live offers a student discount. For note-takers, Evernote offers their premium accounts at a 50% student discount. If you’re not looking to spend any money, check with your college to see if they provide any free software. For example, many colleges provide access to Creative Cloud programs and the Microsoft office suite, accessible through your .edu email.

News Sites

Several newspapers offer student discounts for current college students. The New York Times offers a discounted plan for students at $1.00 a week, which includes online access to the newspaper’s complete archives and articles. The Wall Street Journal offers a comparable student discount for digital access to the newspaper, and an additional option at $10 a month to receive a print copy of the newspaper six days a week.

Service Discounts

When you think of service discounts, senior discounts often come to mind. Several service-based industries, however, also offer student discounts. Many museums offer free or reduced admission to students. Several movie theater chains such as Regal and Cinemark also offer student discounts. If you’ve caught the travel bug, don’t forget to keep an eye out for travel discounts. Amtrak, for example, offers regional student discounts. Greyhound has a similar program, offering 20% discounts to students. Student airfare is even up for grabs, so make sure to check with your airline before you buy your tickets.

Car Insurance Discounts

It’s no secret that car insurance is expensive for young people. Fortunately, many car insurance providers offer student discounts to help balance some of that cost. These discounts vary by provider, but often include discounts for good grades. If you participate in any campus-sponsored activities, keep an eye out for organization-based discounts. For instance, Geico offers discounts to members of some fraternities, sororities, and honors societies.

Cell Phone Plan Discounts

AT&T, Sprint, T-Mobile, and Verizon Wireless all offer special student pricing. Several of them also offer student phone discounts. However, these discounts vary, so it’s best to check with your cell service provider and university to find out what discounts are available for students.

UNiDAYS

UNiDAYS is a great website for finding college student discounts on almost anything. It functions as a platform that shows student discounts as well as verifies the student. It makes it easy to apply student discounts to wherever you shop regularly. By no means is this a conclusive list of all student discounts. If you’re curious whether a place you frequent offers student savings, the best thing you can do is ask. The discounts add up over time, so take advantage of them whenever you can. If you’ve already graduated and you’re looking to save a little money, you may be out of luck on the student discount front. However, there are other ways to save money after graduation. One such option is refinancing student loan debt. Check out your student loan refinance options with ELFI.*

2020-07-24

This Week in Student Loans: July 24, 2020

This week in student loans:

Next Stimulus, What It Could Mean For Student Loans

With a second stimulus package as a near certainty, a number of plans to help student loan borrowers have been introduced as possible components of a second stimulus package.

Source: Forbes

Some Employers Are Starting to Pay Off Student Loans - Here’s How it Works

As student loans have become a larger part of the public consciousness, employers have begun to offer programs to help their employees pay off their student loans more quickly and effectively.

Source: CNBC

With Student Loan Refi Rates Dropping, is This a Good Time to Refinance?

Due to the Coronavirus, student loan refinancing rates have dropped substantially, potentially allowing those who qualify to save extensively on their student loan payments.

Source: Newsday

millennial preparing for private student loan changes within cares act

House Extends CARES Act Protections to Private Student Loans

In an effort to help student loan borrowers deal with the effects of the coronavirus, the House of Representatives have vocally agreed to a provision that would offer CARES act protections to borrowers of private student loans.

Source: Newsweek

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