Student Loan Refinancing (Blog or Resources)

This Week in Student Loans: January 17

Posted on January 17, 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:

House Democrats Overturn DeVos on Student Loan Forgiveness
Could Elizabeth Warren Really Wipe Out $1 Trillion in Student Loans in a Single Stroke?
Study: Barely Anyone is Paying Off Their Student Loans
IRS Issues Tax Guidance On Discharged Student Loans

House of representatives

House Democrats Overturn DeVos on Student Loan Forgiveness

This Thursday, the Democrat-controlled House voted to overturn regulations introduced by Education Secretary Betsy Devos that eliminate the “borrower defense” rules introduced by the Obama administration. Critics have said the new regulations make it more difficult to get student loan forgiveness if a college suddenly closes. Sources say that the move to overturn Devos’ new regulations won’t pass the GOP-controlled Senate, however – and Trump is likely to veto the bill even if it does.

Source: USA Today

signing legislation

Could Elizabeth Warren Really Wipe Out $1 Trillion in Student Loans in a Single Stroke?

Democratic Presidential Candidate Elizabeth Warren recently vowed to eliminate hundreds of billions of dollars in student loans on her first day in office if elected president. Her plan was released just before Tuesday night’s Democratic primary debate. While the ability to erase debt is typically a decision left to Congress, student loans may be a different story due to a loophole involving the “Higher Education Act” passed in 1965.

Source: CBS News

can't pay student loans

Study: Barely Anyone is Paying Off Their Student Loans

A recent study revealed that very few people are making progress on paying off their student loans, along with shifting factors in the nation’s rising student loan debt. The study found that 51 percent of students who took out loans from 2010-12 haven’t made any progress in paying them off. Additionally, it showed that while in the past higher enrollment and rising tuition costs were the main drivers in the rising debt, slow repayments and amassing interest have now become the primary drivers.

Source: NY Daily News

IRS building

IRS Issues Tax Guidance On Discharged Student Loans

The Internal Revenue Service recently issued guidance for some taxpayers who took out federal or private student loans and qualified to have their loans discharged. Typically, having loans discharged is treated as a taxable event, in which the forgiven amount is treated as income – but the tax break from the IRS allows the discharged amount to not be recognized as taxable income.

Source: Forbes

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.

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.

7 Common Student Loan Refinancing Questions Answered

Posted on January 16, 2020January 17, 2020

By Kat Tretina

Kat Tretina is a freelance 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.

If you have student loan debt, you know how painful interest charges can be. High interest rates can cause your loan balance to grow over time, forcing you to repay thousands more than you originally borrowed.

Student loan refinancing ¹ is a strategy you can use to manage your debt and save money. In fact, ELFI customers have reported that they see an average savings of $20,936 after refinancing their student loans².

However, there are questions about student loan refinancing out there that may be preventing you from submitting a loan application. Here are some of the most common questions — and answers — you should know about.

1. Does refinancing student loans cost money?

One of the biggest myths is that refinancing student loans is expensive. And that’s because student loan refinancing is often confused with other forms of refinancing, such as refinancing mortgages. While refinancing a mortgage does involve closing costs, student loan refinancing should not.

Plus, most lenders don’t charge any application or origination fees. And with Education Loan Finance, there are no prepayment penalties, so you’re free to pay off your new loan as soon as you’d like.

2. How long does it take to qualify for student loan refinancing?

Some forms of loans can take months to process, but student loan refinancing is different. You can complete the application in minutes, and you can do everything online. Once you submit your application, the lender will review your information and make a decision. In most cases, you’ll find out whether or not you’re approved in as little as one business day.

If approved, the lender will work to disburse your loan. It can take a few days to a few weeks for that process to be completed, so keep making payments on your current debt until you receive a notification that the loan was disbursed. If you refinance your student loan with ELFI, you’ll have a personal loan advisor who will be your guide throughout the entire process.

3. Is savings from refinancing student loan debt significant?

You may think that student loan refinancing isn’t worth the work because it won’t save enough money for you. But taking just a few minutes to submit a refinancing application can help you save thousands over your loan repayment term.

For example, let’s say you had $30,000 in loans at 7.08% interest — the current rate for federal PLUS Loans. If you repaid your loans over the course of 10 years, your monthly payment would be $350. In total, you’d pay $41,948 by the end of your repayment term; interest charges would add nearly $12,000 to your loan balance.

Use ELFI’s student loan refinance calculator¹ to find out how much money you can save by refinancing your debt.

4. Will refinancing student loans affect my credit?

Some people hold off on student loan refinancing because they’re afraid it will damage their credit. However, lenders like ELFI allow you to get a rate quote (prequalify) with just a soft credit inquiry, which doesn’t affect your credit score.

If you find a quote that works for you and submit a refinancing application, the lender will then complete a hard credit inquiry, which can impact your credit. However, the effect is usually minimal. According to myFICO — the organization behind the FICO credit score — one hard credit inquiry will typically take less than five points off your FICO credit score.

5. Is refinancing federal student loans a good idea?

If you have federal student loans, you may have heard that refinancing your debt isn’t a good idea. However, that’s not the case for everyone.

When you refinance your loans, you will lose out on federal benefits like income-driven repayment plans and loan forgiveness. But those perks are only valuable if you’d actually use them. If you make too much money or don’t work in a qualifying field, you wouldn’t be able to take advantage of those programs.

If you can afford your monthly payments and feel secure in your job, refinancing your federal student loans can help you save money and become debt-free sooner.

6. Do only federal student loans have forbearance or deferment programs?

A big perk of the federal loans is the ability to enter into forbearance or deferment. With these options, you can postpone making payments on your debt without entering into default.

Few refinancing lenders offer forbearance benefits. However, there are some exceptions. With ELFI, you may be able to postpone your payments for up to 12 months if you’re facing a financial hardship, such as a job loss or medical emergency. That period can give you time to get back on your feet before you have to worry about making payments.

7. Can I refinance student loans more than once?

If you already refinanced your loans once, you may think you’re out of luck, and you’re stuck with your current interest rate. However, there’s no limit to how many times you can refinance your loans.

If your credit score improves or you get a raise at work, you can refinance your loans again to see if you qualify for a lower interest rate. As you progress in your career and your finances stabilize, refinancing multiple times can help you pay off your debt even faster.

Refinancing your student loans

While student loan refinancing can be an effective way to manage your debt, there are a lot of myths and misinformation out there. Now that these common questions have been answered, you can move forward with the refinancing process with confidence.

Use ELFI’s Find My Rate tool to get a rate quote without affecting your credit score¹.

¹ Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

² Average savings calculations are based on information provided by SouthEast Bank/Education Loan Finance customers who refinanced their student loans between 8/16/2016 and 10/25/2018. While these amounts represent reported average amounts saved, actual amounts saved will vary depending upon several factors.

Starting a Family? Why Now’s the Time to Refinance Student Loans

Posted on January 15, 2020

By Caroline Farhat

Are you planning to start (or add to your) family? Congratulations! Children are such a special joy, and starting a family is an incredible journey. Whether you’re already expecting or are just in the planning stages, there is a good chance you’ve started crunching some numbers to see how adding a family member will affect your monthly budget. It’s no secret that kids are expensive — the U.S. Department of Agriculture reported that, on average, it would cost a middle-income family $233,610 to raise a child born in 2015 through the age of 17. If you’re currently paying off debt, the eye-popping numbers a child costs may look even more daunting. But money should absolutely not stop you from starting a family. Of course, you want to be financially responsible, but you shouldn’t feel pressured to be debt-free before starting a family. Instead, focus on the things you can do to lighten your budget and leave more room for your new bundle of joy. Here’s how refinancing student loans can help.

Why Refinancing Student Loans When Starting a Family is a Smart Move

One of the biggest worries many new parents have about starting a family is the financial unpredictability children can bring to the household budget. Medical costs, childcare, and all of the latest baby products can certainly add up. One of the best ways to combat this unpredictability is by lowering your fixed monthly costs.

If you are currently paying off student loan debt, refinancing student loans is one of the smartest steps you can take to lower your monthly payment. In fact, student loan borrowers who refinance with ELFI* have reported an average savings of $309 per month1. To put that in perspective, that would get you 38 packs of 32-count diapers. Plus, the emotional benefits you can receive by throwing less money at your student loan debt and more on what is really meaningful to you can be priceless.

How To Refinance Student Loans

If you’re looking at your interest rate and are ready to refinance, you’ll be happy to know that it’s a simple process that can be done entirely online. If you refinance student loans with ELFI, the application process is 100% free, and refinancing has no origination fees or prepayment penalties. The ROI of refinancing student loans can also be quite large. Just an hour or two of work can yield you thousands of dollars in savings. Not bad, right? Here’s what to do:

Check the requirements – While student loan refinancing is a smart move for many student loan borrowers, there are a few cases where refinancing may not be the best option. For example, if you qualify for student loan forgiveness through a federal program, refinancing student loans would make you ineligible for this benefit. Review the basic criteria for student loan refinancing to make sure it’s the best fit for your particular situation. It’s important to fully understand how the Public Student Loan Forgiveness (PSLF) program works and the eligibility requirements.

Crunch the Numbers – Put your data into our student loan refinance calculator to see your potential savings. Our calculator has options for fixed and variable interests and loan terms of 5, 7, 10, 15, or even 20-year terms so you can see how your choices affect your monthly and lifetime payment*.
Get prequalified – You can get prequalified and receive personalized rates in just a few minutes without it affecting your credit score.
Gather your documents and apply – As mentioned, the application is 100% online, easy, and free. When refinancing with ELFI, you are paired with a personal loan advisor who will guide you through every step of the process. The Personal Loan Advisor who speak with at the beginning of the student loan refinancing process is the same person you’ll speak with at the end, which is nice because you won’t find yourself repeating information or prior discussions.

What to Do About Other Debt and Expenses

If you’re like many Americans, student loan debt may not be the only debt you are currently paying off. A whopping 80% of Americans are currently in debt, according to a report from The Pew Charitable Trusts. Here are a few ways you can pay off your debt more quickly or more efficiently.

Refinance Your Debt – Similar to refinancing student loans, you should look for opportunities to refinance any of your other debt. For example, if you have a mortgage, refinancing could save you thousands of dollars over the life of your loan. Auto loans can also be good candidates for refinancing.
Call Your Credit Card Companies – A reduction in the interest rates on your credit cards can make a big difference in how quickly you can pay down debt. A simple, polite phone call to your credit card companies requesting an interest rate reduction can sometimes be all that it takes. You have nothing to lose (except a few minutes), and the payoff can make a major difference in your monthly budget.
Explore Medical Debt Options – Approximately 66.5% of Americans who file for bankruptcy due so because of medical bills. There are options to get this debt under control, but it will take some leg work. NerdWallet has a number of good tips for how to negotiate down your medical debt or develop a payment plan that works for your budget.

Typically, when paying off debt, it’s wise to start with the loan with the highest interest, as that will save you the most money in the long run. Once you have reduced your interest rates as much as possible, take stock of all of your existing debt payments and their monthly costs, and develop a plan. With any of the money you saved, you can start a separate savings account for your growing family.

Children Are Priceless, So Don’t Let Debt Stop You

It may sound cliché, but there are things in life that are just priceless. For many people, the love and joy a child can bring to life are worth more than any spreadsheet will tell you. If you are currently working towards paying off debt, don’t let the goal of being debt-free trump your desire to start a family. There simply may never be a perfect time. Plus, with a little planning, it’s entirely possible to start a family and still work on your financial goals.

Good luck to all of our current and future parents out there – you got this!

*Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions, The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

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

How Often Should You Refinance Student Loans?

Posted on January 14, 2020

It comes each month like clockwork. You look at your monthly student loan statement and wonder how the balance just doesn’t seem to go down that much, despite your diligent payments. If you’re paying down your student debt, there’s a good chance you’ve also wondered if there is any way for you to reduce your monthly payments or the interest you pay on the loan. The good news is that there is — and it’s relatively simple for you to do. Student loan refinancing is one of the best ways to save money on your student loan debt. But what if you have already refinanced, should you refinance again? How often should you refinance student loans? Here are some things to consider when deciding whether refinancing is right for you, whether it’s your first time or you’re a seasoned refinancer.

What is Student Loan Refinancing?

Refinancing your student loans means a lender pays off your current loan with a new loan you borrow. You can refinance with your current loan provider or refinance student loans with a new company. It is also possible to refinance multiple loans into one new loan. The major benefit of student loan refinancing is that typically the new loan has a lower interest rate, thereby saving you money over the lifetime of your loan. Just how much can you save? Take a look:

A private student loan of $20,000 with an interest rate of 8% for ten years will require you to pay $243 per month. Refinance the loan to a ten-year loan with a 3.99% interest rate, and you could be saving $40 per month and $4,831 over the life of the loan.

To find out how much you can save in your situation, plug your numbers into our student loan refinancing calculator. It’s easy and free to use.

So when should you look into refinancing? As soon as possible, depending on some factors discussed below. Interest rates change with the market, and the longer you wait, the more savings you could be missing out on. You can refinance student loans as many times as you find it beneficial, as long as your financial situation qualifies you for refinancing.

What to Consider When Preparing to Refinance Student Loans

1. Your interest rate depends on your credit score, your income, and your history of on-time loan payments.

In order for some lenders to consider refinancing your student loan debt, your credit score should at least be in the 600s. In order to get the lower end interest rates, most lenders will look for a credit score in the 700s or higher. Does your credit score need some help? Check out our guide for tips on building good credit.
In addition, your income must be high enough to be able to pay all your debts. Some lenders will consider your debt-to-income ratio. This is obtained by dividing the total of your monthly debt payments by your monthly income. For example, if your monthly student loan payment is $500, your car payment is $400, and you earn $3,000 per month, your total monthly debt payments are $900. Your debt-to-income ratio would be $900/$3000 = 30%. Generally, a debt-to-income ratio of 50% or less is needed to refinance.

If the credit score or income requirement is an issue for you, you may want to consider a co-signer on the loan that meets these requirements. If that is not an option, take the time to raise your credit score before refinancing. Otherwise, you may not be eligible for a much lower interest rate than your current rate.

2. Do your research about the best student loan refinancing companies. Some companies may offer the same borrower different interest rates, so shop around for the best rate and terms. Here are some things to look for in a good student loan refinancing company:

Free application and no added fees – With ELFI, you won’t pay an application fee, origination fee, or a penalty fee for prepayment*. Your focus and hard-earned money should go to paying off your student loan debt, not fees.
Low rates – This is a no brainer. Why would you refinance if you’re not getting a fantastic rate?
Expertise and/or a good reputation in the field – Be wary of companies that are new to the industry and have little information on them, outside of their own website. With student loan refinancing becoming more popular, it can be a target for scammers. ELFI has earned an “excellent” rating by review site Trustpilot and been awarded NerdWallet’s BEST Refi for Customer Service award for 2019.
Flexible payment options – Whether you’re looking for a variable or fixed rate or a shorter or longer-term payment plan, a good refinancing company will offer different refinancing options to suit your situation. Should you choose to refinance student loans with ELFI, you can choose from repayment terms of 5,7,10, 15, or even 20 years*.
Helpful advisors and good customer service – As you refinance, you may have questions or concerns come up that no chatbot can help with. Be sure the company you refinance with has a good support team who can advise you through the process. At ELFI, you would be connected to a Personal Loan Advisor who will guide you through every step of the way.

Note: Be aware that when you are shopping around for rates at different companies, this could impact your credit score. When a company is requesting to view your credit report, this is known as a hard inquiry. Too many hard inquiries can impact your credit score. However, if rate shopping is done within a small time frame, it may only count as one inquiry and may not affect your score as much. Prequalifying for student loan refinancing, however, is considered a “soft inquiry” and will not affect your credit.

How Often Should You Refinance Student Loans?

You can refinance student loans multiple times, but that doesn’t necessarily mean you should. Each time you refinance, you will be impacting your credit score, so make sure only to do so if you will be saving a significant amount of money. Here are some instances when you should consider refinancing your student loans again:

When you find a lower interest rate on student loans – Interest rates rise and fall with the market. If you initially refinanced when student loan rates were higher, check again when rates drop. It may be months or even a couple of years, but a lower interest rate is sure to save you money on your monthly payment.
If your credit score has improved to qualify you for a lower rate – Did you clean up your credit and raise your score from when you initially refinanced? Having a higher credit score could make you eligible for a better interest rate.
When your income has increased – Having a higher income can help reduce your debt-to-income ratio, thereby making lenders more willing to offer you a lower interest rate.
If you have a variable interest rate and need steady payments – Refinancing student loans again to a fixed rate could provide ease of mind that your payment can’t go up because your interest rate goes up.

Bottom Line

Refinancing your student loans can be a great option to save money on your monthly payment and interest costs over the life of the loan. As you can see, there are many instances where it may be beneficial to try refinancing your loans again, but be sure to review all of the numbers and the impact it may have on your credit score before doing so.

*Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

This Week in Student Loans: January 10

Posted on January 10, 2020

This week in student loans:

Half of Income-Driven Repayment Borrowers Miss Recertification Deadlines
Colorado Weighs “Get On Your Feet” Bill to Assist College Graduates in State
Filling Out FAFSA Won’t Get You Drafted, Experts Say
The Student Loan Forgiveness Tax Bomb
ELFI Surpasses $1 Billion in Student Loan Refinancing

Income-Driven Repayment Borrowers After Missed Deadlines to Recertify

Half of Income-Driven Repayment Borrowers Miss Recertification Deadlines

Over 8 million student loan borrowers use the Federal Income-Driven Repayment plan to help afford monthly payments. The plan can drop payments as low as $0 per month, depending on the borrower’s income and family size. However, in order to stay in these plans, borrowers must recertify annually to avoid consequences such as increased payments, a larger loan balance, and potentially defaulting on the loans. ABC News reported that according to Department of Education data, more than half of borrowers miss the deadline to recertify.

While they will likely have to recertify annually, a new law is being put in place to allow borrowers to opt into automatic recertification. The article encourages borrowers with income-driven repayment plans to watch for the option to become available.

Source: ABC News

Colorado weighs "get on your feet" bill to help in-state graduated with student loans

Colorado Weighs “Get On Your Feet” Bill to Assist College Graduates in State

New graduates of public colleges in Colorado may have more incentive to stay in-state following graduation due to a new bill in the works that could mandate the state to pay their student loan payments for two years. If passed, the “Get On Your Feet” bill will take effect for public college graduates who commit to staying in Colorado and enroll in an income-based repayment program.

Source: Denver Post

college student panicking because of FAFSA rumors

Filling Out FAFSA Won’t Get You Drafted, Experts Say

With tensions rising between the U.S. and Iran this week, a misinterpretation of the fine print within the FAFSA application led some college students to panic over the potential of being drafted. Despite the widespread social media panic, experts say that the federal form won’t actually increase your chances of being drafted.

Source: USA Today

student loan forgiveness tax implications

The Student Loan Forgiveness Tax Bomb

Forbes writer Robert Farrington published an article on January 6 highlighting the tax liabilities that borrowers who receive loan forgiveness through income-driven repayment plans will face. While it’s not widely known, forgiven debt is treated as taxable income during the year that debt is forgiven through an income-based repayment plan. The article outlines the surprising amount that borrowers might pay in taxes when having their loans forgiven.

Source: Forbes

ELFI team celebrates $1 billion in refinanced student loans

ELFI Surpasses $1 Billion in Student Loan Refinancing

Education Loan Finance (ELFI), a division of SouthEast Bank, announced the successful funding of over $1 billion in student loan refinancing and consolidation loans. This funding has positively impacted over 14,500 graduates, parents, and cosigners since they began offering student loan refinance products in December of 2015. ELFI maintains an industry-leading “Excellent” 4.8/5 rating on Trustpilot.com and has been named one of NerdWallet’s Best Student Loan Refi Companies for Customer Service for 2019.

Source: Education Loan Finance

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.

Resolutions: How to Erase Your Student Loan Debt by 2025

Posted on January 9, 2020

By Kat Tretina

If you’re like most college graduates, you left school with student loan debt. According to The Institute for College Access & Success, graduates have $29,200 in student loans, on average. Depending on your repayment term, you could be in debt for a long time. In fact, you could make payments for anywhere from 10 to 30 years.

Having such a large burden on your shoulders can cause you to put off other goals, like starting a business or buying a home. To free yourself from your student loan debt, think of repayment strategies to pay off your student loans as soon as possible.

If you’re determined to become debt-free, here’s how to pay off your student loans by 2025.

1. Create a budget

To pay off your student loans early, you need to have a complete picture of your finances, so you know exactly how much money you have to work with. Creating a monthly budget is an essential first step.

You can use programs like Mint or You Need a Budget (YNAB) to craft a budget and track your spending. Hopefully, you make more money than you spend each month. If that’s not the case — or if money is tight— you’ll have to make some changes to your lifestyle.

2. Cut Corners

To free up more money for debt repayment, you’ll have to take a hard look at your expenses and make some significant cuts. These life changes are not just for recent college students or those just starting out in their careers. If you’re committed to changing your financial situation in a short amount of time, some drastic life changes may be called for. Some things to consider include:

Getting a roommate: While having a roommate may not be ideal, it can be a worthwhile decision. Considering that the average one-bedroom apartment costs $1,025, getting a roommate can help you save over $500 per month. That savings could make a big dent in your student loan balance.
Taking public transportation: If possible, skip buying a car and rely on buses and trains, instead. You’ll be able to save money on a car payment, insurance, and repairs for a vehicle.
Moving to a cheaper area: While moving to a more affordable area isn’t feasible for everyone, it can be a great way to save money. Moving to a less trendy area or even to another state can help you drastically reduce your living expenses.

Cooking at home: According to the Bureau of Labor Statistics, the average American spends $3,469 per year on food consumed away from home, such as restaurants or fast food locations. If you skip eating out and brown-bag your meals, you could save thousands.
Negotiating bills: You’re probably paying more than you need to for your cell phone, cable, and internet. You can use a service like Trim to negotiate your utility bills for you, reducing your monthly expenses.

3. Increase Your Income

Exploring ways of increasing your income isn’t just for new college graduates. Even if you’re gaining a firm foundation in your career and just want to attack your student loan debt with voracity, putting in extra work hours could accelerate your financial goals.

With a side gig, you can earn a significant amount of money. According to a BankRate survey, the average side job earns an individual $1,122 per month — which can make a big difference in knocking down your student loan debt. Here are some ideas to help you get started:

Deliver groceries: If you have a car and a smartphone, you can make money delivering groceries for services like Shipt or Instacart. Depending on your location and speed, you could make up to $22 per hour.
Rent out extra space: If you have a spare bedroom, closet, or empty garage, you can earn cash by renting out your extra space to locals who need to store items with Neighbor.
Tutor online: If you have a computer and reliable internet, you can earn money by tutoring online. With services like Tutor.com and Chegg, you can make up to $20 per hour.
Assemble furniture: If you have a knack for assembling Ikea furniture or toys, you have a lucrative side hustle. You can find clients with TaskRabbit or Takl.
Walk dogs: If you love dogs, you can earn an hourly fee for walking them while their owners are at work. Create an account on Rover or DogVacay to get started.
Work overtime: Public service officials, medical professionals, and educators can make a substantial amount of money on the side by working overtime.
Offer consultation services: If you’re a savvy marketer or have a knack for e-commerce, create a side business of setting up social media accounts for local businesses.

4. Research Student Loan Repayment Assistance Programs

Depending on your major and location, you may qualify for student loan repayment assistance.

For example, highly qualified teachers who teach for at least five years at an eligible school can receive up to $17,500 in loan help through Teacher Loan Forgiveness, a federal program.

Healthcare providers in Pennsylvania can receive up to $100,000 in student loan aid through the state’s Primary Care Loan Repayment Program. In exchange, participants must agree to a service term in a high-need area.

In Florida, lawyers who work for a legal aid organization can receive up to $5,000 per year through the Loan Repayment Assistance Program.

To find programs you may qualify for, check out the federal government’s list of forgiveness programs, and visit your state’s Department of Education website.

5. Use Windfalls Strategically

Using windfalls — unexpected influxes of cash — strategically can cut off years from your loan term.

For example, the IRS reported that the average tax refund in 2019 was $2,860. To put that number in perspective, let’s say you had $30,000 in student loans with an interest rate of 5% and ten years left in your repayment term. If you made a lump sum payment of $2,860, you’d pay off your student loans 14 months early. And, you’d save $1,722 over the length of your loan.

6. Consider Student Loan Refinancing

If you’re determined to pay off your debt as quickly as possible, student loan refinancing can be a smart strategy.

To refinance student loans, you work with a private lender like ELFI* to take out a new loan for the amount of your existing debt. The new loan has different repayment terms than the old ones. You’ll have a new interest rate, loan term, and minimum monthly payment.

If you have good credit and steady income, you could qualify for a lower interest rate and save money.

Let’s say you had $35,000 in student loan debt at 7% interest with a 10-year repayment term. By the end of your repayment term, you’d pay a total of $48,766. Interest charges would cause you to pay back $13,766 more than you originally borrowed.

If you refinanced your student loans and qualified for a 10-year loan at just 5% interest, you’d repay $44,548. Refinancing your debt would help you save $4,218.

ELFI’s Student Loan Refinance Calculator can help you determine how much you could save by refinancing.

7. Avoid Lifestyle Inflation

As your career advances and you start to pay off some of your loan debt, you might be tempted to splurge on a new car, bigger apartment, or fancier electronics to reward yourself. However, try to avoid the urge. Instead, allocate any extra money you have toward your loan payments. You’ll pay off your student loans faster, so you can become debt-free and enjoy more freedom.

The Bottom Line

While your debt may be stressful, you can conquer it by coming up with detailed student loan repayment strategies. With some sacrifice and hard work now, you can eliminate your debt years ahead of schedule.

If you decide to refinance your student loans, use ELFI’s “Find My Rate” tool to get a rate quote, without impacting your credit score.

*Subject to credit approval. Terms and conditions apply.

What is Debt-to-Income Ratio? (Video)

Posted on January 8, 2020January 10, 2020

The Debt-to-Income Ratio (DTI) lets you see how your total monthly debt relates to your gross monthly income. Your gross monthly income is your total income from all sources before taxes and other deductions are taken out.

Learn more about the importance of DTI and the role it plays in qualifying for student loan refinancing in the video below.

Learn More About Debt-to-Income Ratio (DTI)

Financial Goals 2020: Tracking Your Spending

Posted on January 7, 2020January 7, 2020

This blog has been prepared for informational purposes only and does not constitute tax or financial advice. Please consult your tax advisor for guidance on your personal tax situation.

Whether it’s losing weight, going back to school, trying a new sport, or getting your finances in order, there’s no better month than January to refocus your body and mind. Right now, it’s a new year and a new decade so you’re not just resetting for the next 12 months, you’re kicking off the next 10 years, and the resolutions are more important than ever. If tracking your spending is at the top of your goal-setting list—especially after an indulgent holiday season—check out our budgeting tips below.

Budgeting Platforms

When it comes to budgeting, the tedious spreadsheets of yesterday are long gone. There are apps and online programs to make tracking your spending in 2020 a breeze. Mint is a simple (and free) budgeting planner and finance tracker that connects with your bank accounts and credit cards to help you see all account activity in one place. You can access Mint with your computer or phone to:

See spending across categories (like shopping, gas, eating out, etc.)
Create realistic budgets based on past spending habits
Set reminders for bills
Check your credit score
And more

While Mint is more of a look back at your past spending, you can also try more forward-thinking but paid-for budget tools like YNAB (You Need A Budget). Like Mint, this platform seamlessly connects to your accounts to help you see spending trends and automate budgeting, but it’s also more educational. To help you track your spending, YNAB focuses on four rules of budgeting:

Give Every Dollar A Job – don’t buy on a whim, be sure every dollar is assigned a task, whether it’s for eating out or paying student loans.
Embrace Your True Expenses – each month, set aside money for those big, inevitable expenses like car repairs and the holidays. Then you aren’t in a bind when they hit.
Roll With The Punches – if you splurge, avoid being riddled with guilt by simply reallocating funds from another category. Do it, and move on.
Age Your Money – Never spend money that’s less than 30 days old (i.e., you should be paying this month’s bills with last month’s paycheck)

What Refinancing Student Loans Does For Your Budget

Regardless of which platform you chose, it’s important to see spending in categories to help you understand where the majority of your paycheck goes. If you’re a recent college graduate or parent of a graduate, student loans can be one of the biggest categories in your budget. Refinancing student loans can give you a lower monthly payment, freeing up money for other categories. This helps you uphold the “Roll With The Punches” rule of reallocating money from one category to the other when “Whoops!” moments happen with your spending.

ELFI customers have reported saving an average of $309 every month and an average of $20,936 in total savings after refinancing student loans with Education Loan Finance.¹ That’s a big chunk of change that can be added to one spending category or divided up among several, all while still making payments on your student loan debt.

On the other hand, if you finalize your 2020 budget and realize you have extra money in other categories, you can choose to pay down your student loan debt by making additional or larger monthly payments. This concept of overpaying can cut your loan repayment time in half.

If you’re thinking about refinancing student loans to help with your 2020 budgeting, check out our Student Loan Refinance Calculator to see just how much you could save by working with ELFI. You can also review the benefits of student loan refinancing on to see how ELFI can work for you.*

*Subject to credit approval. Terms and conditions apply.

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

Should I Save or Pay Down Student Loan Debt?

Posted on January 2, 2020January 2, 2020

This blog has been prepared for informational purposes only and does not constitute financial advice. Always consult a professional for guidance around your personal financial situation.

Whether it comes as a check from grandma, a bonus from work, or a tax return, extra money in your bank account is a great feeling. However, it can be surprisingly difficult to decide what to do with that extra cash. You’d be tempted to spend the cash frivolously, like booking a much-needed vacation or splurging on eating out. But if you’re in debt, you know that money belongs elsewhere. The only question you should face when you come into a windfall is whether to contribute to savings or pay extra on your student loan debt. Luckily, that question is relatively easy to answer.

Save First. Pay Student Loan Debt Second.

Saving money—to a point—is necessary to ensure you’re prepared for unexpected financial emergencies. Car accident? Broken bone? Laid off? You need a “rainy day fund” so you can pay the bills when life challenges you without warning. By not saving, you could end up living on credit cards with interest rates that are likely two or three times higher than your student loan debt. Then you’re burdened with even steeper financial obligations to pay off.

It’s recommended that you save at least six months of your current salary to be fully prepared for emergencies. Once you get your savings stockpiled, turn your attention to paying down student loan debt.

To explore why this is the case, consider savings accounts usually offer rates around 2%. However, your student loan debt likely comes with an interest rate of around 4%-7% interest if you have loans through the federal government. If you keep depositing money in your savings account instead of reducing your loan balance, you accumulate more debt (in interest owed) than you save.

Basic savings accounts are fairly safe—your balance only grows, as long as you don’t withdraw money from the account. The payoff for this safety is a lower interest rate. Low risk equals low reward.

So, you might be thinking, “What saving options make me more money?”

Related: Yes, You Need A Side Hustle

Are Stocks worth the investment?

Stocks are a popular option that is high risk and high reward. When you buy stock in a company, you own a piece of that company. The benefit for them is that your money is an investment in developing new products and other growth-based projects. The benefit for you is that your money could grow with the company. The downfall, however, is that your money can be depleted if the company’s stock takes a downturn.

Stocks can also be an intimidating game since companies like Alphabet (Google) and Amazon generally sell for more than $1,000 a share. However, some companies like Robinhood are trying to make stocks more accessible to the everyday investor, highlighted with their soon to be released fractional share trading options. With the new feature, you can buy one-millionth of a share or just $1 worth of any stock.

Could I place savings in a CD?

A more middle-of-the-road option is a CD. Not to be confused with a compact disc, these Certificates of Deposit are savings accounts that are typically federally-insured and usually have higher interest rates than traditional savings accounts. The beauty of placing your money in a CD is that it becomes harder to spend your money frivolously since there are predetermined dates for withdrawal. Common terms are 3, 6, 12, and 18-months, with penalties assessed if money is withdrawn before the maturity date.

Ready to Save But Short On Funds?

Saving and paying off debt is great…when you have the extra cash to do so. But not everyone has a wealthy grandma or job that comes with a bonus. Here are some quick ways to save.

Student loan refinancing through companies like ELFI* could free up more money by lowering your monthly payment through loan consolidation and a lower interest rate. In fact, customers reported saving an average of $309 every month and an average of $20,936 in total savings after refinancing student loans with Education Loan Finance.

You could also save hundreds of dollars a month after canceling unused subscriptions. Banks or apps like Truebill and Trim can help you find and cancel subscriptions that are unused or that you forgot you signed up for in the first place. These apps also connect to your bank account to make automated weekly money transfers into a savings account. With automated transfers, think small—just $25 a week can turn into $1,300 a year.

Apps like Acorns can make your investments even more simple by setting aside leftover change from purchases you make. With the Acorns debit card, the spare change from each purchase is placed in an investment account of your choosing. And when you shop via the Acorns app or Chrome Extension at 350+ retail partners, a percentage of your total purchase is deposited into your selected savings account.

At ELFI, we work hard to help you reduce student loan debt with great student loan refinancing options. By refinancing student loans with ELFI, you can pick the payment plan and terms that fit your life. See what you could save with our quick, no-obligation quote.

*Subject to credit approval. Terms and conditions apply.

This Week in Student Loans: December 13

Posted on December 13, 2019December 16, 2019

This week in student loans:

How This Couple Paid Off $400,000 of Student Loan Debt in 5 Years
Similarities Between Student Loan Debt Crisis and the Mortgage Crisis?
University of Phoenix Cancels $141 Million in Student Debt in Settlement Over Deceptive Ads
Defrauded Borrowers Will Only Receive Partial Forgiveness Under New Devos Plan

How This Couple Is Paying Off $400,000 of Student Loan Debt in 5 Years

CNBC reported that Kayla and Ryan Anderson, a couple with degrees in physical therapy and prosthetics and orthotics respectively, have paid off $377,744 of their student debt and are on track to pay off $400,000 in five years using a “zero-based budget” combined with a “debt snowball” strategy.

The concept of zero-based budgeting is that your monthly income minus your expenses should equal zero, with all of your income being used for something of importance, eliminating frivolous spending. The debt snowball is a strategy from Dave Ramsey that involved paying off your smallest debt balances first.

Source: CNBC

Similarities Between Student Loan Debt Crisis and the Mortgage Crisis?

A Forbes article published this week involved the opinion of Mike Calhoun, who runs the nonprofit Center for Responsible Lending, in which Calhoun sees many similarities between the 2007-2008 mortgage crisis and today’s student loan crisis. Key similarities include the disconnect between borrowed debt and borrowers ability to pay off the debt and disproportionate impacts on minority groups.

Source: Forbes

University of Phoenix Cancels $141 Million in Student Debt in Settlement Over Deceptive Ads

The University of Phoenix has agreed to a $191 million settlement with the FTC regarding claims that students were harmed by deceptive advertising in which the University “touted relationships and job opportunities with AT&T, Yahoo!, Microsoft, Twitter, and The American Red Cross,” according to the FTC press release. Of the settlement, $50 million will be paid to the FTC and the remaining $141 million will cancel debts of students who first enrolled during the time that the deceptive ads ran.

Source: USA Today

Defrauded Borrowers Will Only Receive Partial Forgiveness Under New Devos Plan

Devos and the Trump administration have announced a new plan to address the backlog of over 210,000 student loan forgiveness claims for borrowers defrauded by for-profit colleges – but rather than providing full debt relief, they will now provide relief based on publicly available earnings data, in which they compare “median earnings of graduates who have made borrower defense claims to the median earnings of graduates from comparable programs.” If the median earnings of students from the school is lower than the median earnings of students from comparable schools, then it will be determined that the students have “suffered harm” and will receive relief, either full or in part based on how much lower the school’s median earnings are.

Source: US News

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.