School loan refi is the process of consolidating all existing loans into the one with lower interest rate and (probably) different loan term.
In the result of the refi school loan, you face lower monthly payments and save on interest.
The interest rate and the loan term differs depending on the policy of the lending institution. As you know, you have a right to refinance private loans only. If you want to refinance the federal loan, you will refinance it into private one only. Therefore, you should check out multiple options from the private lenders, before choosing the most beneficial one.
You more likely know that private lenders don’t part with their money easily. Therefore, in order to apply for a school loan refi, you have to qualify for certain requirements:
- You must have a credit score above 650. In order to qualify for a better rate, you should have more than 700 points.
- You must have a convincing income. Define your monthly after-tax income and think if it is enough for a life after paying the monthly payment. If yes, then your income is enough.
- You must have no or limited debt. If you have any other existing debt (credit card debt, mortgage, auto, etc.), the lender will sum up all debts to understand your total debt obligations.
- You must have a small debt-to-income ratio. If your income is $10,000 per month and you spend $4,000 monthly to pay off the debt, then your debt-to-income ratio will make up 40%.
- You must be employed.
If you have no ability to work or your income is too small and you can’t change the situation now, you can provide a worthy cosigner with an excellent credit history and high and stable income.
Which company to use for school loan refi? You can apply via Personal Money Service!