Lowest Prices
Flexible Terms
Secured & Trusted
Student Loan Refinancing Buying Guide
What is Student Loan Refinancing?
Student loan refinancing involves replacing your current student loans—either federal, private, or a combination of both—with a new, single loan from a private lender. The new loan will typically have different terms, including a potentially lower interest rate, depending on various factors like your credit score and income.
When to Consider Refinancing
- Interest Rate Drop: If rates have dropped significantly since you first took out your loans.
- Improved Credit Score: A better credit score can qualify you for a lower rate.
- Stable Income: A stable and significant income can make you a more attractive borrower.
- Variable to Fixed Rate: If you want to switch from a variable rate to a fixed rate.
Pros and Cons
Pros
- Lower interest rates
- Single monthly payment
- Customizable loan terms
Cons
- Loss of federal benefits (e.g., Public Service Loan Forgiveness)
- Credit impact due to loan application
- Limited deferment and forbearance options
Eligibility Criteria
- Credit Score: Usually, a minimum of 650 is needed.
- Income: A stable income source is generally required.
- Loan Type: Federal and private loans can usually be refinanced.
- Educational Status: Many lenders require a completed degree.
How to Shop for Refinancing
- Interest Rate: Both fixed and variable rates should be compared.
- Lender Reputation: Check customer reviews and ratings.
- Loan Term: Options often range from 5 to 20 years.
- Fees: Look for lenders who do not charge origination or prepayment fees.
Key Features to Look For
- Rate Discounts: Some lenders offer rate discounts for autopay.
- Cosigner Release: Option to remove a cosigner after meeting specific conditions.
- Flexible Repayment: Look for options like forbearance or graduated repayment.
Steps to Refinance
- Pre-Qualification: Check rates without affecting your credit score.
- Application: Submit necessary documentation for a credit check.
- Loan Selection: Choose the loan terms that best suit your needs.
- Approval and Disbursement: Upon approval, the new lender pays off your old loans.
- New Payments: Begin making monthly payments to the new lender.
Pitfalls to Avoid
- Ignoring Federal Benefits: Refinancing federal loans means giving up specific benefits.
- Long Loan Terms: A longer loan term can result in more interest paid over time.
- Variable Rates: While they start lower, they can increase over time.
Review Our Top Personal Loan Choices
Our Top Choice: Rhode Island Student Loan Authority
- Loan Pre-qualification with Soft Credit Check
- 0.25% Interest Rate Reduction for Auto-Pay
- Loan Deferment Options
- In-house Customer Service
Zero Fees Our final verdict for RISLA is highly favorable. With competitive interest rates and strong customer service, the only real limitations are the geographical restrictions and lack of a co-signer release option. If you fit the eligibility criteria, RISLA is a strong contender for student loan refinancing.
Pros
- Competitive Interest Rates
- No Origination Fees
- Flexible Repayment Options
- High Customer Satisfaction
- Local, Trustworthy Service
Cons
- Limited to Rhode Island Residents or Students
- No Co-signer Release Option
Mefa
- Loan Consolidation
- Fixed Rates
- Educational Webinars
- Customer Service Support
MEFA offers an excellent balance of competitive rates, educational resources, and repayment flexibility. However, its geographic and loan amount limitations could be barriers for some. If you fit within their parameters, MEFA is a strong option for student loan refinancing.
Pros
- Competitive Fixed Rates
- Multiple Repayment Options
- No Application or Origination Fees
- Loan Consolidation Available
- Strong Educational Resources
Cons
- Limited Deferment Options
- Higher Minimum Loan Amount
