Tips for Finding the Best Student Loan Refinancing Lender

February 3, 2020

Taking out student loans is an investment in your future, just like buying a house, contributing to a 401K, or building a portfolio of stocks and bonds. Whereas housing and stock markets alike can crash seemingly without warning, however, a college degree delivers, more often than not. According to the College Board’s “Education Pays” report, a college student that is behind employed peers in terms of wages while paying for a bachelor’s degree will recoup these losses by age 34 and begin to surpass those same peers.

Note: This blog was previously published in August of 2017, but has been updated to be current for our readers.

In other words, you’ve done good by going to college, and the result is that you are now paying your bills and student loans while also saving for your future. Still, you can’t help but notice all the media hype over the benefits of student loan refinancing, or the great offers from companies like Education Loan Finance that could help you to save money over the life of your student loans.

If you’re going to refinance in order to reduce your interest rates, monthly payments or overall payout on student loans, you have to be just as smart as you were when choosing a profitable major. You need to ask the right questions and compare student loan refinancing lenders. Here are the top questions to help you get to the bottom of finding the best student loan refinancing lender.

Do I qualify for refinancing?

This is question number one. If a lender won’t work with you for some reason or another, you’ll have to go back to the drawing board. As a college student paying down debt, however, you might find yourself in a great position to refinance.

Potential factors affecting your ability to refinance include:

Credit score
Credit history
Debt-to-income ratio
Monthly salary/annual income

Not every lender will use the same factors in determining eligibility. While some rely primarily on credit score and history, others now weigh minimum income requirements more heavily. The good news is, if you earn a good income, you’re working to reduce debt and you’ve built up a solid credit score (680+) and clean credit history, you’re probably in a great position to refinance with just about any student loan refinancing lender you approach, allowing you the opportunity to shop around and pick the lender you prefer.

What are the benefits?

There are a lot of potential benefits to refinancing student loans, but when you do it right, the biggest benefit is saving money. Once you’ve qualified for refinancing, it’s time to look for the best terms, and this could include comparing:

Interest rates
Variable/fixed rates
Monthly payments
Loan duration
Overall payout

With the right terms, you could reduce your debt and save money on every front. This, in turn, could mean paying off debt faster, improving your credit score, reducing stress and generally feeling pretty awesome about your excellent life choices. You might be able to buy your first home or start a business sooner than you hoped. Maybe you can start putting money into retirement accounts and taking advantage of compound interest early in life. Sound refinancing opens doors. Hashtag winning, anyone?

What’s the deal with fixed vs. variable rates?

You may have noticed that among your myriad student loans are lurking some variable rates. As a college grad, you probably understand the difference between the terms “fixed” and “variable,” so you know why the former is generally preferable. Variable-rate loans fluctuate, which is pretty great during economic downturn because your interest rates and payments go down.

Are there penalties for early repayment?

According to the office of Federal Student Aid, the federal loans you take for college incur no penalties for early repayment. Can you keep the same benefits when you refinance? You’ll need to make sure the lender you choose allows you to make extra payments toward the principle of the loan, as opposed to paying off fees and accrued interest first. This way you’ll be sure to enjoy the rewards of your responsible financial behavior, and actually reduce debt and pay your loan down faster.

Are there further discounts available?

You might already know that you should ask about available discounts when comparing insurance policies, but did you know you can also get discounts through loan refinancing? You might not save the same amount as with a greatly reduced interest rate, but every little bit helps.

Some lenders will reduce your rate by a small percentage (say 0.25%) if you select an automatic payment method. You might also be eligible for discounts related to good behavior like on-time, consecutive payments. Or you could get bonuses for referrals. If there are discounts to be had, you definitely want to know about them, and the best way is to ask.

What are some other benefits to refinancing student loans?

You want more than monetary savings when you refinance? You got it. Some lenders are finding ways to sweeten the deal with extras like unemployment protection, career coaching, entrepreneurship programs and more. Often, these bonuses are in the best interest of both lenders and borrowers.

For example, pausing loan payments during hardships like job loss can give borrowers the opportunity to get back on their feet and resume payments faster, and helping borrowers with career and entrepreneurship opportunities can lead to increased earnings and perhaps future loans. It looks like lenders are starting to see the value of long-term relationships with college grads.

Should I refinance or consolidate?

Why not do both? When you refinance and consolidate at the same time, you stand to reduce interest rates and payments, but you could also increase convenience by turning a dozen monthly payments into a single bill.

Before your refinance your student loans, you need to choose a lender that’s going to offer you the best terms and the most benefits. With a list of targeted questions in mind, you can find the perfect lender for the job. It could just be the beginning of a beautiful friendship.

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.

Consumers are refinancing loans as a form of personal stimulus

Despite the economic callout due to the coronavirus pandemic, Americans are using historically low interest rates to refinance their loans as a form of personal stimulus during the pandemic. The article explains how mortgage refinancing volume has skyrocketed and how the low-interest rate environment is also applying to student loan refinancing.

Source: Yahoo Finance

House Democrats scale back $10,000 student-loan-forgiveness measure

On Thursday, House Democrats introduced an amendment to their $3 trillion coronavirus relief spending package that significantly scaled back a student-debt provision, also known as the HEROES Act, because of its higher-than-expected cost.

Source: Business Insider

HEROES Act promises 5 ways to help your student loans

As mentioned above, House Democrats proposed a new $3 trillion stimulus bill called the HEROES Act to provide financial assistance to Americans due to the coronavirus pandemic. Read about the five changes this act includes in the Forbes article.

Source: Forbes

millennial debating whether to pay student loans during CARES Act suspension of loan payments

Coronavirus pauses federal student loans for 6 months — should you pay anyway?

The CARES Act put a pause on all student loan payments through September 30 – but should you pay anyway? This Fox Business article argues that if you have the financial means to do so, you might consider continuing to repay your school loans or even refinance your student loans in a low interest rate environment.

Source: Fox Business

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.

2020-05-14

A Nurse’s Guide to Student Loan Refinancing

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

By Kat Tretina

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

The demand for skilled nurses is only going to grow. According to the U.S. Bureau of Labor Statistics, the job outlook for registered nurses is projected to increase by 12% by 2028, much faster than average. And, nurses can command high salaries. As of 2019, the median salary for registered nurses was $73,300 per year, significantly higher than the median wage for all occupations, which is just $39,810. While you likely had to take out student loans to pay for your nursing education, your higher-than-average income makes you a strong candidate for student loan refinancing. Consolidating your debt can allow you to save money and pay off your loans sooner so that you can focus on your other financial goals.

Why you should refinance student loans after nursing school

Becoming a registered nurse typically requires only a bachelor’s degree. But if you want to become an Advanced Practice Nurse, nurse administrator, or nurse educator, you’ll need a master’s degree. Graduate student loans tend to have higher interest rates than other types of education loans, causing more interest to accrue and your loan balances to grow over time. For example, the interest rate on federal Grad PLUS Loans disbursed between July 1, 2019, and July 1, 2020, is 7.08%. If you have high-interest debt, refinancing can help you tackle your loans and lower your interest rate. With a solid income as a nurse and a good credit history — or a cosigner willing to apply for a loan with you — you can qualify for a lower rate and save money over the life of your repayment term. In fact, our customers reported that they saved an average of $272 every month and should see an average of $13,940 in total savings after refinancing their student loans with ELFI.

How to refinance nursing school loans

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

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

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

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

2. Consider asking a cosigner for help

When you apply for a refinancing loan, the lender will perform a credit check. If you don’t have an extensive credit history, or if your credit score is too low, you may not be able to qualify for a loan on your own, or you may not qualify for a competitive interest rate. However, there is a workaround — you can add a cosigner to your loan application. A cosigner is a parent, relative, or friend with good credit who signs the loan application and assumes responsibility for the loan if you fall behind on the payments. Having a cosigner increases your odds of the lender approving you for a loan and qualifying for a lower rate.

3. Get a rate quote

To find out what kind of loan terms you can get, use ELFI’s Find My Rate tool. By entering basic information about yourself, you’ll get an estimated rate in just a few minutes without affecting your credit score.* You can see how different factors, like loan term and choosing a variable or fixed interest rate, can affect your monthly payment and total repayment amount.

4. Gather documentation

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

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

5. Submit your loan application

To complete the application, you’ll have to enter personal information about yourself, including your address, birthdate, and Social Security number. You’ll also have to include information about your employer and income. Once you submit the application, ELFI’s team will review the form and contact you with either an approval or denial. Until the loan is approved and disbursed, continue making payments to avoid late fees and penalties.

6 other options for managing your loans

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

1. Nurse Corps Loan Repayment Program

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

2. Public Service Loan Forgiveness (PSLF)

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

3. State student loan repayment assistance programs

To recruit nurses to work in areas with shortages of healthcare workers, some states offer student loan repayment assistance programs in return for work commitments. For example, registered nurses in Kentucky can receive up to $20,000 in tax-free loan repayment assistance if they agree to work for two years at a location in a rural and underserved area. In Florida, nurses can receive up to $4,000 for every year they work at a designated employment site or facility. Eligible nurses can participate in the program for up to four years, and get up to $16,000 in loan repayment assistance. To find out if your state offers a similar program, visit your state’s department of health or education websites.

4. Income-driven repayment plans

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

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

Depending on your location, you may be eligible for a sign-on bonus. In some areas, nurses are in high demand, and understaffed hospitals and healthcare companies offer sign-on bonuses to attract talented nurses to work for them. You could qualify for a bonus of $10,000 or more on top of your regular salary. According to AdventHealth, a major hospital network, sign-on bonuses for nurses aren’t usually issued as upfront payments. Instead, they’re broken up into installments over a service period, such as four payments over two years. But if you use those payments to make extra payments on your student loans, you can save money on interest and pay off your debt early. You can find nursing jobs that offer sign-on bonuses on Indeed.

6. The Student Loan Forgiveness for Frontline Health Workers Act

On May 5, 2020, Rep. Carolyn Maloney, a Democrat in New York,introduced the Student Loan Forgiveness for Frontline Health Workers Act. If passed, this bill would discharge all federal and private loans belonging to healthcare workers who interacted with COVID-19 patients, including doctors, nurses, and technicians. The bill’s future is unclear, but it does signal that there is growing pressure on lawmakers to help healthcare workers — especially those on the frontlines of the pandemic — pay down their student loan debt.

Repaying your student loans

As a nurse, your career is taxing enough; don’t let your student loans weigh you down. Student loan refinancing can give you significant relief from your debt. You can save money, pay off your debt, and even lower your monthly payment. To find out how much you can save, use the student loan refinance calculator.*

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

2020-04-29

Should I Refinance Student Loans in an Economic Downturn?

The COVID-19 outbreak has had a significant impact on the economy, causing many people to lose their jobs and struggle to make ends meet. By Kat Tretina While the Coronavirus Aid, Relief, and Economic Security (CARES) Act gave some relief to federal student loan borrowers — including suspending loan payments and waiving interest charges for six months — those provisions won’t last forever. Under the current legislation, the CARES Act protections will expire on September 30, 2020. If you’re looking for a long-term solution for managing your debt, student loan refinancing is a popular strategy. But does it make sense during an economic downturn? Here’s what to consider.

Should I refinance student loans? 5 questions to ask first

Before moving forward with your refinancing application, ask yourself these five questions.

1. What kind of loans do you have?

What kind of loans you have will impact what protections and benefits are available to you. If you have federal student loans, you may be eligible for protections under the CARES Act, meaning your payments are suspended until September 30, and interest charges are waived. Since you don’t have to make payments and interest isn’t accruing, it may not make sense to refinance right now. Instead, it may be wiser to wait until the CARES Act provisions expire to refinance your debt. However, not all student loans are eligible for the CARES Act benefits. Private student loans and some federal loans, such as Perkins Loans and commercially-owned FFEL Loans, don’t qualify for payment suspensions or interest waivers. If you have that kind of debt, refinancing right away can help you save money and pay down your loans.

2. How secure is your job?

During an economic downturn, the job market can become volatile. If you’re at risk of losing your job, it’s important to keep your federal loans where they are so you can take advantage of the CARES Act and federal forbearance and deferment protections. If you have private loans, refinancing can actually be a good idea. When you refinance, you can move your loans to a new lender that offers more generous repayment options, such as longer repayment terms and financial hardship forbearance. For example, if you are unable to repay your loans because of a financial hardship or medical issue, ELFI may grant you forbearance for up to 12 months. If your company is relatively secure, you can also encourage your employer to offer student loan repayment assistance to recruit and retain top talent. With ELFI for Business, companies can offer this benefit as part of their compensation packages and take advantage of the tax provisions in the CARES Act that benefit employers.

3. Do you have an emergency fund?

Refinancing your student loan debt can accelerate your debt repayment. If you make extra payments toward your loans, more of your payment will go toward the principal rather than interest, cutting months or even years off of your loan term. However, putting extra cash toward your debt during a recession may not be the best course of action. If you don’t have a substantial emergency fund, you’re likely better off stashing your money into a savings account until you have at least three to six months’ worth of expenses saved. Once you have a fully-funded emergency fund, then you can focus on paying down your debt.

4. Do you have good credit or a cosigner?

Refinancing rates are rapidly dropping, so you can dramatically reduce your interest rate when you refinance your student loans. However, to qualify for the lowest rates, you’ll need to have excellent credit. If your credit is less-than-stellar, or if you don’t have an established credit history, you can still qualify for a loan and get a competitive interest rate by adding a cosigner to your loan application. A cosigner can be a parent, relative, or even a good friend with a good credit score and stable income. They apply for the loan with you and agree to make payments if you fall behind. Because they’re backing you on the loan, there’s less risk to the lender, allowing you to get a lower interest rate than you’d get on your own.

5. What are your goals for refinancing?

When the economy is in decline, it’s essential that you’re very clear about your financial goals. Before refinancing your debt, think about what you want to accomplish. There are three main benefits of student loan refinancing:

You can pay off your debt earlier: With a lower interest rate, more of your payments go toward the principal. If you stay consistent with your payments, you can pay off your student loans ahead of schedule, becoming debt-free sooner. During a recession, not having any debt is a major advantage.

You can save money over the life of your loan: When you refinance your debt and qualify for a lower interest rate, you can save thousands over the length of your repayment term. You can use the money you save to pursue other financial goals, like investing or buying a home. Use the student loan refinance calculator to find out how much you can save.*

You can reduce your minimum monthly payments: If your monthly payments are too high right now, refinancing can make them more manageable. By getting a lower interest rate or extending your repayment term, you can significantly reduce your minimum monthly payment and get more breathing room in your monthly budget.

Refinancing your student loans

Even though the country is going through a significant economic crisis, student loan refinancing can still be an effective way to manage your debt in certain situations. Before refinancing, carefully evaluate your situation and what protections are available for your loans to ensure it’s the right decision for you. If you decide that refinancing makes sense, use the Find My Rate tool to get a rate quote.*