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Customer Review of Refinancing Student Loans With ELFI

October 9, 2019

Meet Daniel, a college graduate with an entrepreneurial spirit. He started his own tutoring business five years ago, and with the burden of student debt weighing him down, he decided to refinance his student loans this past year.

 

After applying for student loan refinancing with about 10 different companies, Daniel decided to go with ELFI. Here’s why.

 

 

He wanted to make sure that he could get the best terms that he could. His new terms with ELFI saved him $162/month, and he’s paying his loans for 5 fewer years. His loans were also consolidated into one monthly payment.

 

He wanted a company that matches you with one representative that assists you through the entire process. Amanda Scott, an ELFI Personal Loan Advisor, helped Daniel through the entire process of refinancing his student loans. As he says, “she was the very first phone call and the very last call I had with Education Loan Finance.”

 

By refinancing his student loans with ELFI, Daniel freed up additional money every month that he can now use to provide for his growing family, fund the construction of his new home, save for retirement, and support his tutoring business.

 

“It’s a relief knowing that I have refinanced these loans – and that I can now go on with the rest of my life.”

 

Interested in seeing how much you could save by refinancing your student loans? Consult our student loan refinancing calculator.*

 

Learn More About Student Loan Refinancing With ELFI

 


 

*This is a paid testimonial. Education Loan Finance is a nationwide student loan debt consolidation program offered by SouthEast Bank, which is based in Tennessee. ELFI is designed to assist borrowers through consolidating outstanding 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 at www.elfi.com/terms. The interest rate and monthly payment for a variable rate loan may increase after closing. Interest rates will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. 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.

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Man researching about discharging refinanced student loans
2020-05-29
Are Refinanced Student Loans Dischargeable?

If you have refinanced your student loans in the past, you may be wondering whether your refinanced loans can be discharged. The short answer is yes, but only under specific circumstances of which most individuals do not meet the criteria, and if you do meet the criteria, it can still be a very difficult process. Read on to see what circumstances allow for refinanced student loans to be discharged, and what you can do to ease the burden of private student loan debt if you don’t meet the criteria for discharge.

 

What is Student Loan Discharge?

To begin, it’s important to understand what the term “discharge” means in regard to student loans. Often used interchangeably with student loan forgiveness, these terms actually apply to different situations:

  • Student loan forgiveness is usually based on the borrower working in a particular occupation for a period of time, such as within the Public Service Loan Forgiveness (PSLF) Program. For private student loans, loan forgiveness is essentially non-existent.
  • Student loan discharge is usually based on the borrower’s inability to repay the debt or the borrower not being responsible for the debt because of fraud.
 

Discharging Refinanced Student Loans

Refinanced student loans are essentially new loans taken out with a private lender – so when talking about whether refinanced student loans are dischargeable, you should look at them like private student loans. Here are some situations in which private student loans may be dischargeable. Keep in mind that private student loans are very rarely discharged and that this shouldn’t be considered a realistic option.

 

Disability

While federal student loans are dischargeable for individuals who are “totally and permanently” disabled, private student loans aren’t necessarily subject to this rule. However, some private lenders do offer loan discharge in situations of disability. If this applies to you, contact your lender for more information – many lenders review requests for financial assistance on a case-by-case basis and will show compassion toward the situation.

 

Bankruptcy

If you’re seeking to have your refinanced student loans discharged, filing for bankruptcy could possibly be a last-resort option – however, it is very difficult and unlikely to happen because student loans aren’t categorized as dischargeable debt. According to the U.S. Bankruptcy Code, in order to have your federal or private student loans discharged through bankruptcy, you must prove undue financial hardship on yourself and your dependents, which is a difficult and expensive process that will most likely require a separate lawsuit and an attorney. This process is so difficult that most people who file for bankruptcy do not attempt to include their student loans. If you are unable to prove undue hardship, you will be obligated to continue repaying your student loans, and if you’re currently having your wages garnished due to default, they will continue to be garnished.

 

There are also some pretty substantial drawbacks to filing bankruptcy that could have a lasting impact on your life.

 

Drawbacks of Filing for Bankruptcy

It Could Hurt Your Credit Score

If you currently have a good credit score (700 or higher), filing for bankruptcy is likely to bring it down substantially, making it more difficult to obtain financing for a mortgage, car loan, or personal loan.

 

It Will Show on Your Credit Report for up to 10 Years

As if a ding to your credit score isn’t bad enough, filing for bankruptcy will show on your credit report for up to 10 years, which can not only affect your ability to obtain financing, but also could be seen by potential employers and affect your hireability or be seen by landlords and affect your ability to find rental housing.

 

Your Cosigners will be Liable for your Debts

If you have any cosigners on your loans, they will become responsible for your debts that you no longer owe.

 

Loss of Property and Real Estate

Occasionally, not all personal property and real estate will fall under exemption when bankruptcy is filed. This means that the bankruptcy court may seize your property and sell it for the purpose of paying your debts to creditors.

 

Denial of Tax Refunds

As a result of filing bankruptcy, you may be denied federal, state or local tax refunds.

 

Ways to Ease Private Student Loan Debt

If the burden of your refinanced student loans appear to be too much for you to handle, there are several actions you can take to help ease the pressure.

 

Take Stock of Your Finances

While this may go unsaid, making changes to your financial habits and budget may help you set aside the money to afford your monthly payments. Take stock of your income, savings and how you are currently spending your money. Perhaps you also have federal student loans that you could consolidate or refinance as well, or maybe you have a few subscriptions that you don’t need and can cancel. Making small changes to your financial habits can make a big impact.

 

Contact Your Lender

While you may not qualify to have your refinanced student loans discharged, you may find it useful to contact your lender to learn about the options available to you. Many lenders will offer a temporary deferment or forbearance in times of economic or financial hardship. Being transparent with your servicer may allow you to avoid missed payments, which can have pretty significant impacts on your credit score.

 

Consider Refinancing Student Loans Again

Did you know there’s no limit to how many times you can refinance your loans? While you may have already refinanced your student loans once, refinancing them again may be an option to consider, depending on whether your financial situation has changed or if interest rates have dropped. If your credit score improves or you get a raise at work, you may be able to qualify for a lower interest rate. Even if you haven’t seen a big change in your financial status, you may be able to extend your loan term and lower your monthly payments. Check out our Student Loan Refinancing Calculator to examine how changing the length of your loan term may help you save on monthly payments.*

 

Ask for Employer Assistance in Student Loan Repayment

In an effort to be competitive in recruiting and provide relief to employees, many employers are offering (or considering) student loan repayment assistance as an added benefit to employees. If your employer isn’t currently offering this benefit, consider asking if there’s potential for it to be added. Now is actually a great time to make this proposal, as a recent provision within the Coronavirus Aid, Relief, and Economic Security (CARES) Act allows employers to contribute up to $5,250 tax-free annually to their employees’ student loans until December 31, 2020. Send your HR department a well-written letter or have a formal meeting to discuss this opportunity.

 

Conclusion

You may find that getting your refinanced student loans or private student loans discharged isn’t any easy process. However, there are actions you can take to ease the financial burden that your student loans are causing. Visit the ELFI blog for more helpful tips and resources for paying off your student loan debt.

 
 

*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.

millennial pushing ball uphill, representing student loans
2020-05-29
The Modern Millennial’s Battle With Student Loans

Everyone can agree that student debt is a problem in the United States. Now more than ever, student loans have come to the forefront of the cultural landscape. This February, Forbes reported that student loan debt in the U.S. had reached a record of $1.6 trillion, and the CARES Act provisions for student loans has brought them even further into the spotlight of public consciousness.

 

The everyday millennial’s battle with paying off student loans is a complex problem that is created by a variety of factors. Here are some of the issues and situations that typical millennials face when paying off student loans, along with some tips for actually tackling their debt once and for all.

 

That Moment When the Grace Period Ends

The grace period of student loans, typically lasting around six months after the completion of college, provides time for the new graduate to find a job. For those six months, they are free from the burden of making payments on their student loans. This period can seem to be a respite from the debt; however, the grace period can quickly turn into a period of stress. If the economy is in a dip, it can be difficult to find the job’s necessary to pay off student loans. Even when they do find a job, sometimes it can be difficult to make the monthly payments with an entry-level salary. The moment when the grace period ends is when reality starts to set in. Nonetheless, many still find the ability to begin making payments for a period of time. This then leads them toward the next hurdle – not getting discouraged by their loan balance.

 

The Difficult Task of Paying Off High Interest Rate Loans

Many millennials are trapped in high interest rate loans, where they attempt to pay their loans back, but the balance of the loans never really seems to go down, or at least not by much. The high interest rates simply counteract any effort to pay the loans off, leading many millennials to feel discouraged and stop making payments altogether. This causes their loan balance to increase, along with impacting their credit score with missed payments, which can hinder their ability to refinance for a lower interest rate later.

 

The Misleading Comfort of Student Loan Forgiveness

Loan forgiveness has often been discussed by both politicians and the media. After all, forgiving student loans would unburden hundreds of thousands from debt – however, there still stands no real basis for believing in total and complete student loan forgiveness. The closest to forgiveness that we’ve seen is the recent CARES Act, which waived payments on student loans through September 30, 2020, allowing those with federal student loans to stop paying for the period without having interest accrue. The constant talk of student loan forgiveness and even the CARES Act, while incredibly important and beneficial to those struggling with student debt, take away from some of the seriousness of paying back student debt on time. After all, why pay back loans when there seems to be student loan forgiveness on the horizon? This hope is the reason that many millennials decide to miss student loan payments, defer them, or even worse, go into default.

 

The Importance of Making Student Loan Payments

The talk of loan forgiveness should never trivialize the importance of paying off student loans promptly, as student loans can affect other things than simply your wallet. When many millennials graduate, they aren’t overly concerned with their credit score or history, and may not even know that missing student loan payments can affect them in this area. After all, they likely aren’t looking to buy a home or take out a personal loan immediately following graduation. They already may have to pay plenty of “new” expenses such as rent, utilities, groceries, etc., and unfortunately, student loans can fall by the wayside with these newfound expenses emerging.

 

However, missed payments, depending on how long you go without making them up, can have severe impacts on your credit score and credit history. Most prevalent is the presence of your missed payments on your credit report for up to seven years. In some cases, missed payments can lead to drops in your credit score as well. As such, it is important that you know how missed student loan payments can affect your credit score.

 

The Reality

The impact of missed payments on your finances cannot be understated. It leads to more interest to pay back, keeping the mountain of debt continuously growing, and it can drop your credit score substantially, especially if you have a good credit score to begin with. And, sadly, debt forgiveness isn’t guaranteed. The best way to avoid drops in your credit score and increasing debt is simply to take it seriously and pay it back timely. Worth noting is that if managed properly student loans can help your credit score in the long run.

 

How to Pay Back Student Loans Faster and More Effectively

Student loans can be seriously overwhelming, but there are several methods to pay them off faster and more effectively:

 

Set Up Automatic Payments

Automatic payments are an easy way to make sure that you are paying your student loans on time and never missing payments. They’re easy to set up and can take much of the burden away from keeping track of when you need to be making your payments.  

Refinance Student Loans

Student loan refinancing is another way to pay student loans back quickly and more effectively. By refinancing, you choose which loans to consolidate and take out a new loan with a private lender, often with a lower interest rate and with a term length of your choosing. This allows you to either lower your monthly payments or pay your loans off faster by choosing a shorter term. ELFI customers have reported that they are saving an average of $272 every month and should see an average of $13,940 in total savings after refinancing their student loans.1. Check out ELFI’s student loan refinancing calculator to estimate your potential savings.  

Choosing a Different Term

Another method to pay back student loans quickly or more effectively is to change the term of the loan. Shorter loan terms typically have higher monthly payments but allow you to pay them off faster, while longer terms often lower the monthly payment amount. Adjusting the length of your loan term can help you better manage your student loans by adapting them to your goals and lifestyle.  

Make Extra Payments

Making extra payments on your student loans allows you to make contributions that directly impact your loan principal balance, helping you save on interest long-term and pay off your loans faster. Keep in mind that if you have late fees or interest has accrued, your payments will first go towards late fees, then interest, then at last your principal balance.  

Look into Student Loan Forgiveness

If you work in a public service position or for a non-profit, you may want to consider the Public Service Loan Forgiveness (PSLF) program or another loan forgiveness program offered by the federal government. Keep in mind that only about 1% of PSLF applicants actually qualify for forgiveness. Other options exist for volunteers, military recruits, medical personnel, etc. Some state, school, and private programs also offer loan forgiveness. Check with your school or loan servicer to see if you may qualify for student loan forgiveness.  

Federal Loan Repayment Plans

By default, upon completing your federal student loan grace period, you are entered into the Standard Repayment Plan. However, there are a wide variety of other repayment plans that the federal government offers, such as the Income-Based Repayment plan, which determines payments based on your income and is forgiven after 10 years of on-time payments. Check out the Federal Student Aid website to learn more about the options available to you.  

Paying back student loans can undoubtedly be difficult and stressful, but by taking advantage of the many resources at your disposal, they can be managed. If you have questions about your student loans or methods of repayment, the best way to have them answered is to contact your loan servicer.

 
 

*Subject to credit approval. Terms and conditions apply.

 

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.

 

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.

college student refinancing student loans
2020-05-26
Can You Refinance Student Loans While in School?

If you have student loans you probably have wondered what’s the best way to handle them. Should you wait to pay them after graduation or start paying them while in school? Or maybe you have heard about student loan refinancing and are wondering if it is right for you. Read on to find out one way you can manage your student loans that will benefit you right now.  

What is Student Loan Refinancing?

When you refinance student loans you take out a new loan to pay off one or multiple federal or private student loans. You will have a new loan term and presumably a lower interest rate. You can refinance to a new loan with the same amount of years left as your old loan or stretch out the term to allow a longer time for repayment. If you increase the amount of time to repay this will lower your monthly payment but likely will cause you to pay more interest over the loan term.   

Can You Refinance Student Loans While in School?  

The short answer is yes, but it may be difficult to find a lender that you can refinance with if you are still in college. Many lenders require a Bachelor’s degree as an eligibility requirement for refinancing. The other
requirements to refinance* with ELFI include: 
  • You must have a credit score of at least 680 and a minimum yearly income of $35,000. 
  • Must have a minimum credit history of 36 months.
  • Must be a U.S. citizen, the age of majority. 
  If you cannot currently meet these requirements, you can have a cosigner that fits these requirements.     If you have federal student loans some may argue you should wait to refinance them until you graduate because they offer more flexibility with deferment and forbearance. However, some private lenders also offer deferment and forbearance options. Some other things to consider are:
  • If you think you will get a job in the public sector that would qualify for Public Service Loan Forgiveness, you may not want to refinance because you would lose the benefit of having your federal student loans forgiven under the program. 
  • If you think you will want to take advantage of an income-driven repayment plan when you graduate, you may not want to refinance because this is only offered for federal student loans. Tip: Be aware that when you take advantage of income-driven repayment plans, your monthly payment is lower, but you will end up paying more for the loan in interest costs.   
  There are many benefits to refinancing while in school to put you on a better financial path when you graduate. The average college graduate has $31,172 in student loans. However, you can work to reduce that amount by refinancing. Student loan refinancing can be beneficial for many reasons: 
  • Consolidate - Refinancing allows you to consolidate multiple federal and private student loans into one new loan. You can refinance some or all of your loans. Consolidation makes it easier to manage one loan as opposed to multiple loans. With only one loan you will be less likely to miss a due date, and avoid any associated late fees. 
  • Lowers Interest Rate - When you refinance you can potentially qualify for a lower interest rate. A lower interest rate saves you in interest costs over the life of the loan. 
    • If you have unsubsidized federal student loans (the ones where interest accrues while you are in school) your loans could be growing by an average of 4.53%. But if you refinance you may qualify for a lower rate, as low as 3.86%, and less interest would be accruing. 
  • Lower Monthly Payment - If you score a lower interest rate when you refinance you will be paying a lower monthly payment. To find out how much you could potentially save, use our Student Loan Refinance Calculator.*  
  • New Lender - Do you always have trouble with customer service when you want to ask a question about your loan? When you refinance, you can get a new lender if you choose. It’s great to find a lender with high customer reviews. At ELFI we pride ourselves on providing award-winning customer service. 
  • Fixed Interest Rate - if you have a loan with a variable interest rate it may be more advantageous to refinance and lock in a fixed interest rate. With a variable interest rate your payment can increase when interest rates increase, which could put a financial strain on your budget. 
  Important tip: if you refinance while in school and after graduation your credit score and income increase, you can always try refinancing your loan again to possibly get an even lower rate.*   

Conclusion

Researching how to handle your student loans while still in school is a great initiative to set yourself up for a strong financial future after graduation. Student loans may seem like a heavy burden, but utilizing resources available to you will make the monthly payments easier on your budget.  
  *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.