Refinancing Private Student Loans

7 min read

What Are Sallie Mae and Nelnet?

Sallie Mae (Sal-lee Mee) is a company that provides loans for students enrolled at colleges and universities. At the same time, they provide financing to those who need a loan for their education. In fact, between 2007 and 2012, they grew from $50 billion dollars to $100 billion dollars in total outstanding student debt. Their portfolio includes approximately $80 billion in private student loans.

Nelnet Inc. (Neh-len) is a company that specializes in providing private student loan refinancing options to borrowers. They were founded back in 1991 and have grown significantly since then. By 2004, they had already exceeded $1 billion in total assets. Since then, they’ve continued to expand throughout the United States and also internationally.

How Do You Get Refinanced?

There are many ways that you can refinance your private student loan. First, let’s take a look at how you go about getting a federal student loan. If you’re considering applying for a federal student loan, you should start by contacting the Department of Education (ED). ED works directly with lenders throughout the country to help them make sure that people meet all the requirements that are listed on their website.

Next, you would want to contact your lender. Your lender will be able to give you much more information regarding what documents you need to submit and how long you may have to wait before receiving approval.

How Much Can I Save?

One of the biggest questions that people ask when looking for refinancing deals is “How much can I save?” There are two things that you need to take into consideration when answering this question. The first thing that you should do is calculate how much interest you currently pay out each month. Next, consider how much you could potentially save if you decided to get refinanced over the course of ten years. To begin calculating the amount of money that you could save, you simply subtract your current monthly payment from the potential savings.

Which Type of Loan Is Best for Me?

The best type of loan that you can choose is called an income based repayment plan. This type of loan lets you repay your student loans over a period of 10 years. So you wouldn’t have any interest payments for the first five years. Instead, you’ll only have to make payments when you actually earn more than enough money to cover the interest due on your loans.

If you don’t qualify for an income based repayment plan, you should try to get a consolidation loan. A consolidation loan helps you combine your different loans into one single repayment. You might even have access to different types of services depending on the type of loan that you get.

How Much Time Does it Take?

It takes anywhere from 5 days to 2 weeks for you to receive the results of your application. You will receive a letter notifying you whether or not you were approved to apply for a refinancing deal. Be patient! Sometimes, the processing of your application can take longer than expected. That being said, you shouldn’t have any issues once you’ve submitted your application.

When Should I Apply?

Refinancing Private Student Loans

What is refinance?

A Refinancing is a process where borrowers pay off their existing loans and take out new ones at a lower interest rate. In return, they get a lower monthly payment and may be able to save money over time. When refinancing student loans, borrowers often end up saving thousands of dollars over the course of the loan.

How do I know if my private student loans are eligible for refinancing?

If you have any federal student loans (including Direct Subsidized or Unsubsidized Federal Stafford Loans) that were issued before July 1, 1993, then those loans are considered eligible for refinancing. Also, If you have any federally insured loans from the Department of Education, including FAFSA PLUS loans, Direct Consolidation Loans, or Direct Graduation Loans, then those loans are also eligible for refinancing.

How much would my savings affect my monthly payments?

The amount you can save depends on how much you owe, what type of loan you have, and what kind of interest rates you’re currently paying. That said, refinancing could result in savings of anywhere from $10-$50 per month depending on your current interest rate and what you’re looking to borrow.

Are there certain types of loans that are not eligible?

No. Any private student loan is eligible to be refinanced. There’s no need to worry about whether you qualify or not – just contact us today!

Refinancing Private Student Loans

How do I qualify?

You need to have student loan debt totaling $10,000 or less, including any consolidation or refinancing fees, and interest rates of at least 6%. You should also have a credit score above 680; if not, you may still be able to apply, though the lender’s terms may change.

How much could my monthly payment be?

Your interest rate will determine how high your payments could go. If you have a 10% interest rate, then your monthly payment could range anywhere between $60 and $150 per month.

What types of loans are eligible?

Private student loans are only offered by banks (not government-owned), and they are generally only available to undergraduate students who attend two years of college. Federal Stafford loans can be issued to graduate students who attend three years of school. These federal loans require repayment until you reach age 24 or graduate, whichever comes first.

Why would I refinance private student loans instead of paying them off right away?

If you pay off your private student loans early, you won’t accrue interest. However, you could lose out on future earnings potential if you don’t continue working toward a degree after graduating. Refinancing your private student loans will save you money over time, while keeping your options open for the future.

Can refinancing private student loans reduce my monthly payments?

Generally, yes. Depending on where you live, you may be able to lower your interest rate by refraining from prepaying your loans. The best way to get the lowest rate possible is to shop around among lenders. Don’t be afraid to ask questions about anything you don’t understand.

Do refinancing private student loans hurt my credit score?

No, not necessarily. In fact, it might actually improve it slightly, depending on what type of student loan you choose. Most lenders offer “no-interest” grace periods before considering your application declined. If you consolidate your loans, some say your credit score can even increase after six months. But keep in mind that consolidating your loans doesn’t necessarily mean lessening your payments.

Are refinancing private student loans expensive?

It might seem that way, but remember that this is money that you will never have to repay anyway. Plus, just imagine how much money you’ll save each month! If you decide to look into refinancing, make sure you compare the deals offered by different lenders. Compare interest rates and fees and take note of any prepayment penalties.

Refinancing Private Student Loans

Why would I want to do this?

The average student loan debt for someone who was born after 1980 is about $34,000. This number is expected to rise by $8,000 by 2022 alone. Most people have never heard of refinancing their loans before but it’s actually a relatively simple process that can save you money.

How does this work?

A student loan is a great way to finance your education, especially if you need to borrow money to pay for books, tuition, and room and board. When you graduate, however, you may not want to continue to repay these loans out of income. Refinancing lets you transfer the balance from private student loans to a lower interest rate government backed loan. In exchange, you receive a check from the federal government for any amount overpaid.

What type of financing is available?

There are two types of refinance programs – Direct Consolidation and Graduated Repayment (GRAD). A direct consolidation program means that you consolidate all of your debts under one loan and lower your rates while the GRAD program lets you pay smaller amounts each month over time. You can choose to either keep paying back your original loans after signing up for grad repayment or switch to a new federal loan with lower monthly payments. Your decision will depend on how much money you make per year and what kind of monthly payment you can afford. There are many factors to consider when choosing between a direct consolidation and GRAD plan.

Who should consider refinancing?

Anyone who has outstanding student loans that don’t qualify them for public service or federal consolidation might benefit from refinancing. If you have some student debt that isn’t eligible for consolidation, look into a direct consolidation. If you have manageable monthly payments, a GRAD plan may be a good fit for you. Make sure to talk to your lender or financial advisor about the pros and cons of each option.

What should I know?

You could lose access to certain programs like grants, scholarships, and low-interest student loans if you default on your student loans. Federal law requires lenders to report any unpaid balances to credit bureaus. Be aware of what happens if you miss a single payment. Contact your loan servicer immediately to avoid penalties.

Refinancing Private Student Loans

Refinance Your Education Debt – Using Federal Grants & Private Financing!

Do you have private student loans? If so, you may be eligible for refinancing your education debt through federal grants and private financing solutions without having to pay upfront costs!

Find out if You Qualify for a Federal Grant – Do you qualify for any of these free government grants?

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