There are some people who’ve been in this situation. They want to refinance their student’s loans; they’re just not sure how.
By doing this, you’ll be able to change your student loans, be them private or federal, into a new loan which has a lower interest rate. This will give you lower monthly payments, which means more money to repay the loan, or to save some, even invest in something. If you choose to refinance your loan, you can save up to $20,000 over your student years. If we’re talking about a health degree, the number can go even higher than that. For example, for dental school, it’s $260,000. Medical and pharmacy school come with $180,000 and $160,000 and veterinary school with $140,000.
How can you get approved to refinance your loans?
There are some strict criteria. You need to understand that if they give you the money, they put their capital at risk – this is about their money, not the governments’, so they need to make sure that you’re going to pay them back. Now, every candidate is unique, and you may get an acceptance, or a rejection. We’ve written this article to give you an idea on how to get the refinancing of your student loans.
Your Credit Score
This credit score works as a barometer of your money. This is the first thing they’ll look at when deciding if giving you the money or not. They’ll find out wether you’re known for paying on time or not. As a general case, lenders will say yes if your credit score is minimum in the mid to high 600’s, but other don’t really have a minimum. But to be sure, get a credit score of 700 or higher.
They’ll also take a look at your income to make sure you’re able to repay back what you got from them. They’ll ask for evidence that you have a stable, monthly income and cash flow. In these cases, you should do some math and see what the after-tax monthly income is. When you pay the loans from one month, will you have enough for living expenses for that month? If you don’t think you can qualify because of your income, get a co-signer who has a strong credit profile.
Your Other Debt
Maybe you have to pay other debt, too, such as mortgage, auto or credit card. They will influence their decision when it comes to giving you the money. They will do the math of the total monthly debt payments, and then they’d decide if you can handle it or not. Calculate your monthly payments here.
You need to repay the other debts as soon as possible if you want to get qualified for refinancing student loans.