Refinancing your student loans can be a breeze with a little planning. You’ll want to take each step and make it as easy as possible through organization and understanding. This article will help you turn the process of refinancing into something that makes sense. Some of these are typical things that student loan refinancing lenders will want to know about.
Tip #1 – Know why you are refinancing
What is your goal – Are you looking for a lower monthly payment? A lower interest rate and to get out of debt faster? What kind of loan are you looking for – fixed or variable rate? Loan term? If you are looking for the lowest monthly payment, a variable rate loan with a longer term will usually get you that (but you will pay more interest). If you are looking to pay the least interest over the life of the loan, a shorter term with fixed rate interest would be helpful.
Tip #2 – Gather proof of income
Collect pay stubs – You’ll need to prove your income to your lender so have your previous two months of pay-stubs handy. Most lenders will have a way for you to upload copies directly to them.
Tip #3 – Know your credit score
Check your credit score – If you have a good or excellent credit score, you’ll likely receive a lower interest rate than the one you’re currently paying. Some sites such as Lend-Grow can look up your credit score automatically without impacting them and present you with best offers (lowest payment or lowest rate whatever you prefer).
Tip #4 – A co-signer can help you save substantially
Look for a co-signer or get married – don’t really get married, but if you already are, that can be a benefit to you. You can use your combined household income to qualify for better rates. If you have less than favorable credit, you can get someone to co-sign for you. A co-signer may help you get a good rate or qualify for the loan if you can’t qualify by yourself. Some lenders will even allow the co-signer to drop off after a certain amount of on-time payments.
Tip #5 – Gather info on your existing loans
Get organized and understand your current loans. Most of us have more than one student loan. Make a list of your student loan lenders, loan balance, account numbers, monthly payments and interest rates. This will be very handy when you check for refinancing options online. Some sites such as Lend-Grow are able to get this information automatically while checking your rate for student loan refinancing. So, you can skip this tedious step altogether. If you want to find this by yourself, here are few other ways to gather this information quickly:
- Loan Billing Statements – Gather your billing statements from your current student loans. Log on each of the servicer’s online accounts and get the loan balance and monthly payment info.
- Bank Statements – Go to your online bank account numbers and look for student loan payments for past two months. You can straightaway get the # of loans, monthly payment, and even the current loan servicer information.
- Credit Report – Annualcreditreport.com will give you a free copy of your credit report. You can look up all your current student loan accounts and payments online for free similarly at Lend-Grow. There you’ll find who your loan servicers are and how much you currently owe.
- NSLDS site – For Federal loans the National Student Loan Data System (NSLDS) is a great resource; it is the US Department of Education’s database for student aid. You will need FSA ID to access NSLDS.
- Directly from Lenders – You can call your current student loans lenders and get the information on loans. StudentLoans.gov has a list of loan servicer phone numbers. A few of these are:
Granite State – GSMR 800-722-1300
OSLA Servicing 800-722-1300
Great Lakes Educational Loan Services, Inc. 800-236-4300
FedLoan Servicing (PHEAA) 800-699-2908
Tip #6 – Check out the smaller lenders for better deals
Find the lender that’s right for you. Choosing a big-name lender or one with the coolest app isn’t always the best choice. A big-lender’s accessibility through online services is enticing, but, if you’re willing to put in a little more time, local lenders can save you money. While the process will likely be bit more manual and in-person, they can save you thousands by giving you a lower interest rate. You have options, so don’t settle for refinancing with someone who doesn’t fully understand your situation.
A great place to find a student loan refinance option suited to your needs is Lend-Grow. Lend-Grow connects borrowers with a network of local lenders that compete to offer refinance loans. Nish Krishna, Lend-Grow’s founder, says “Local lenders often offer low rates as they are not spending millions of dollars on brand advertising and flashy technology. While the application process might take a few more days with a local lender, it’s well worth the patience and tens of thousands of dollars in savings on interest over the lifetime of the loan.”