How To Refinance Your Student Loans & Save A Decade Worth Of Interest Payments

Written By: Steve Reeves

Student loan debt is overwhelming.

The thought of paying out a good chunk of your income for the next 21.1 years is an absolute nightmare!

You have other goals like buying a house or traveling but you’re carrying this anchor on your back. While it may seem like you’ll have that debt for the rest of your life… There is hope.

I’m going to show you how to reduce interest points. That way you can pay it off faster than “recommended” 21.1 years 🙂. Here are the best student loan refi programs available right now…

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DebtZero Top Choice

splash financial

Recommended Credit Score

670 – 850

DebtZero Rating 5.0

APR As Low As*
1.99% Variable
3.19% Fixed

Loan Terms
5 – 25 Years

Qualifications
Undergrad & Graduate
Private & Federal

PROS:

Refi Accessible For Large Range Of Loans
Checking Rates Does Not Effect Credit Score
No Prepayment Penalty

CONS:

Minimum 670 Credit Score Required
$5,000 Minimum Loan Amount

300,000+ Approved Loans

SoFi

Recommended Credit Score

680 – 850

DebtZero Rating 4.5

APR As Low As*
2.31% Variable
3.20% Fixed

Loan Terms
5 – 20 Years

Qualifications
Undergrad & Graduate
Private & Federal

PROS:

Checking Rates Doesn’t Effect Credit Score
Over $18 Billion In Loans Already Granted
Career Coaching Available

CONS:

Lower Rates Available Elsewhere For Variable Loans
Co-borrower Release Not Available

Shop Multiple Lenders

LendKey

Recommended Credit Score

660 – 850

DebtZero Rating 4.1

APR As Low As*
1.90% Variable
3.39% Fixed

Loan Terms
5 – 20 Years

Qualifications
Undergrad & Graduate
Private & Federal

PROS:

Compare Multiple Lenders
Co-signers Accepted
No Application Fees

CONS:

Not A Direct Lender
Pre-approval Not Available

What Can You Expect With A Student Loan Refinance?

Refinancing can save you thousands of dollars over the life of the loan. For example, if your loan is for $30000 with a 7% interest rate and you refinanced down to 5%… You would save $8304 in interest payments. More importantly, for our purposes…

You would also clear up extra money each month in your budget.

When you add a lower student loan payment together with your overall financial plan, it quickly adds up. If you spend the time to lower your payments on credit cards, insurance, etc…

You could be looking at hundreds of dollars each month you can use to get out of debt faster.

Consolidation vs Refinancing

Consolidation simply puts all your student loans into one pot. It eliminates the need to pay multiple creditors. There isn’t much benefit other than that.

Refinancing, if you have good credit and a decent or better income, will save you money on interest. There is one gotcha you need to be aware of with refinancing.

If you have federal loans you’ll want to be careful not to make your finances worse.

Federal loans allow for loan forgiveness (approval is very rare) and more importantly, an income-based repayment plan. If you are unsure of your current work situation…

-Or-

You question your ability to quickly get another job if this one ends… Stick with your federal loans for now so you won’t get hammered with monthly payments with no income.

How Do You Refinance Your Student Loans?

You’re going to need good credit or a ready and willing co-signer. For the best rates, you’ll want to be in the 700s. You’ll also need a good debt to income ratio.

If you add up all your debt… car loan, credit cards, etc you’ll want it to be under 50% of your income. Only certain lenders will allow refinancing if someone didn’t get their degree.

Also, look for a lender who offers a discount for setting up autopay. Many will give you a quarter-point interest deduction for signing up.

Every little bit helps.

The last thing you want to look for is if there is a prepayment penalty for paying it off early. Avoid those as that will completely ruin what we’re trying to do here (get out of debt).

After much research, we have selected the top 3 lenders that will allow you to get out of debt faster. They all meet the criteria above.

Here they are…

splash financial
SoFi
Lendkey

Select one and simply follow their process. Let’s save that money and get out of debt quicker than 21.1 years!

*Terms apply. Check with the financial institution for further qualifications. Every effort has been made to ensure the information is accurate and up to date. There are times however where the information may not match that of the financial institution.