Refinance Student Loans, What Does That Mean?
When you refinance student loan, it’s to reduce the interest rate on your loan and your actual monthly payment.
How to Refinance College Loans
Refinancing student loans, it offers a lot more options. For example, you don’t just have to rely on banks. You can check out credit unions or companies that specialize in refinancing.
Refinance loan approval is dependent upon the lender. Each one has a specific set of criterion they look for, though there are standards that the majority of lenders seek:
- Proof of income
- Credit Check
- FICO Score
- Tax Returns
- Income and Expenses Report
Before refinancing – as frustrating as this is – it’s important to know whether or not you’re in a solid financial position. Additionally, if you are refinancing federal loans, that’s different from refinancing private loans. Say you’re unable to make your payment and want to reduce it for a month or you can’t pay at all, you won’t get the flexibility you need. Try to anticipate, as best you can what the next 12-24-36 months looks like for you financially.
Consider running a credit check before you approach lenders to see if you have any outstanding payments or unpaid bills. Afterwards, think about your current payments and if you’re making them on time. If so, refinancing approval is that much easier.
Your goals with this endeavor are the following:
- Reduce your interest rate
- Reduce your monthly payment
Bear in mind that you’re objective is to remain fiscally healthy!