Student loan refinancing is the process of either taking one or multiple student loans and then refinancing them into a new single loan that often include new terms, such as a lower interest rate, a new monthly payment, and a new repayment length.
Refinancing is a great solution for working graduates or those no longer enrolled in school who have high-interest rates on current outstanding student loans. Refinancing can lower your interest rate and shorten your term to help you get out of debt faster. Borrowers should be aware that by refinancing, they may lose certain benefits offered by the federal programs, such as deferments, forbearance, and income-based repayment plans.
Our lenders will refinance federal, private, and Parent PLUS student loans. When you refinance with one of our lenders, all of your loans are consolidated into one easy monthly payment.
Use our Find My Rate tool to calculate your exact estimated interest rate, compute your monthly payment, and compare lifetime interest savings all without completing a profile or submitting to a credit check.
Although you may have good credit yourself, applying with a cosigner who also has good credit and strong income can ensure that you meet our lender's credit criteria. This will increase the likelihood that you will pass our lender's initial credit screening process and they provide you with a lower interest rate on your student loan refinance. You can check your rate with a cosigner before applying by estimating your cosigners credit score on our Find My Rate tool. Our lenders will use the higher of the two credit scores for qualification purposes which means you can max out on savings.Please note that when an application has a cosigner, the borrower and the cosigner will both a) jointly apply for credit; and, (b) be jointly liable for the requested loan. Each of our lenders has a different policy for a cosigner release. PenFed borrowers with a cosigner on their loan may request a "cosigner release" if after one year (12 consecutive months) of on-time payments is met, and a quick re-evaluation (note: this does not mean the borrower would have to re-apply) is completed on the borrower's financial and credit profile. Give us a call at 202-888-4320 if you would like to see if you qualify.For Citizen's cosigner release, borrower must make 36 consecutive on time payments before requesting a cosigner release.PenFed Cosigner Requirements:If your annual income is between $25,000 and $41,999, then you will need an eligible cosigner on your application. Also, if your credit score is between 670 and 699, then you will need an eligible cosigner on your application.Citizens Cosigner Requirements:If your credit score is between 620 and 679 you will need an eligible cosigner on the application. Your cosigner must have a credit score at or above 660 and you and your cosigner must have income at or above $24,000 to qualify.
Your cosigner is jointly responsible for your loan for the life of the loan so make sure you choose wisely and can manage all the payments. If you miss a payment, it will damage your cosigner's credit as well as your own.
PenFed: The minimum loan amount is $7,500, and the maximum is $150,000.Citizens: The minimum loan amount of $10,000 and the maximum depends on your degree type. For undergrads and those without degrees, the maximum loan amount is $90,000. For those with graduate degrees or an MBA, the maximum is $225,000, and those with MD, DDS, Law, Pharmacy or Veterinary degrees may refinance up to $300,000.
Zip, zero, nada. Our lenders never have fees and we don't think you need to have any additional charges for trying to save money. There are no pre-payment penalties, origination, or application fees.
You must be out of school or no longer enrolled in school to be eligible to refinance with one of our lenders.
Great! Once you have used our Find My Rate tool and selected the loan you are interested in click the apply button to be taken directly to the lenders application.
We will always provide free consultations about your student loan scenario via email firstname.lastname@example.org, or via phone, 202-524-1115. We pride ourselves in putting you first and finding the best solution for each unique situation.
Each of our lenders has a slightly different process but in general, to expedite the processing of your loan documents, and to keep them secure, it is best to upload them directly to your application.
We can typically facilitate this request for married couples and other unique situations. However, please call one of our student loan experts at 202-524-1115 or email us at email@example.com to discuss options before proceeding with an application so we can find the best solution for you.
A reference is an individual who could verify your name and address, but who does not reside with you at your physical address. If we were unable to get a hold of you, we would contact your reference. This only applies if you were severely past-due on paying your loan. A reference is not contacted during the application process.
Your reference can be anyone over the age of 18, as long as he or she is not living at the same address as you. If you are applying with a cosigner, you cannot use him or her as your reference, nor can your reference live at the same address as your cosigner. Lastly, you and your cosigner cannot use the same reference (so make sure to call dibs).
The initial credit review considers all of the information you and your cosigner provide during the application process, such as income, degree, and school, as well as the information obtained from your credit report. Once you pass the credit review, the next step is to provide documentation that supports the credit information.
It depends on the lender you choose but your application will be saved for at least 30 days. But why wait when you can save money on your loan now? You can access your unfinished application by logging into your account at your lender's website.
PenFed: PenFed requires 5 items during the underwriting process:
No need to break out the fax machine, a smartphone picture or screen shot will suffice.
In order to refinance with PenFed, you will need to become a PenFed member but don't worry - it's easy to join, and there is no requirement for military service. You'll fill out a membership form during the underwriting process after you are pre-approved. Once your membership is confirmed, you'll have access to PenFed's award-winning products and services. You do not need to be a member to apply to refinance your student loans, we only require membership after pre-approval.
A Payoff Verification Statement is a statement provided by lenders and servicers that verifies the amount it would take to completely pay off your loan at a certain day in the future (often 10, 15, or 30 days in advance). The amount takes into account the loan balance, interest, fees, and any accrued interest during the time that the statement is requested and the future payoff date provided. This document is critical to the Purefy processing team during the underwriting process as it allows us to prepare an accurate payoff figure for your existing loans. On the contrary, loan statements or monthly billing statements solely provide the loan balance at a certain time, and they do not account for accrued interest.
It depends on the lender you refinance with but after your loan disburses you can set up your auto pay (if available) and your account to manage your loan. On the day after your loan is disbursed, you will receive a notification from your lender with the steps to set up your online account and manage it going forward.
It typically takes 3-14 business days for your old servicer(s) to receive the payoff funds, apply them to your account, and process the payoff. Please check your account at your old servicer(s) to ensure that the payoffs have been applied after this timeframe. Contact Purefy if the balance is still outstanding after 14 business days and we will help you take care of it.
We recommend that you continue making regular payments with your existing loan servicer to avoid missing a payment while the disbursement goes through. Any overpayment our lenders make on your existing loan will be refunded directly to you by your existing servicer in the form of a paper check sent to the address on your application. If your servicer sends us the refund, our lenders will apply the funds directly to the principal balance of your loan.
Each of our lenders has a slightly different policy. PenFed and Citizens do not advertise for deferments and forbearance. However, if a borrower lost his/her job, or there was an extraordinary circumstance (death, illness), PenFed and Citizens would absolutely work with the borrower on a case-by-case basis to determine the best remedy. If forbearance is in the interest of both parties, then interest would accrue during the forbearance period, but no payment would be due.
Defaulting on a loan is a very serious matter which could have an adverse effect on your personal credit score. Further, bankruptcy does not cancel the obligation to repay an education loan. If you are about to miss a loan payment, contacts your lender immediately to work out a repayment schedule.
No, you can pay your loan off early regardless of your repayment terms without any penalty. You will only be charged the amount of interest that has accrued on the loan until the day the loan is paid off.
We only offer one type of repayment option; principal and interest payments. Any payment larger than the amount due made before the due date will be applied directly to the loan's principal balance.
PenFed and Citizens Bank are the servicers of the student refinance loans. You can contact a representative of the PenFed Member Services team at 800-247-5626 or visit the website at www.PenFed.org. Citizens general assistance can be reached at 1-800-922-9999 or visit the website at www.citizensbank.com
If you refinance with PenFed, your first payment is due 30 days after the loan disburses. To set up an account with PenFed, visit www.PenFed.org and click Create Online Account to register for Online Banking - you will need your member number and security code (call 1-800-247-5626 to establish your security code and obtain your member number). Mobile App: Once you create your online account, you can pay via our mobile app which is available for download on the App Store and Google Play.By Mail:PenFed Credit Union
Like other private lenders, our lenders do not offer a deferment period.
This accounts for the interest rate risk. It's always riskier for both parties to lock-in to a long-term rate without the information of where rates may be headed.
Interest is calculated as simple daily interest for student loans. This means that each day the outstanding principal balance is multiplied by the interest rate and divided by 365 days to calculate that day's interest amount. For example, if you have a $10,000 loan and the interest rate is 7%, one day's interest will be
($10,000 x 0.07) / 365 = $1.92.
Our lenders generally determine interest rates by your credit score and the type of degree you have. Your loan amount has no impact on the rates offered. Your annual income is factored into DTI (debt-to-income) calculations but won't have any effect on your interest rate. If you apply with a cosigner or refinance with your spouse, our lenders use the higher credit score to calculate your interest rate and save you even more on your student loans. Remember, you can check your estimated rate using our Find My Rate tool.
Yes, a borrower may prepay the loan either partially or in full at any time without incurring any fees of penalties. So if you won the lottery, and want to take care of that balance, fees won't get in your way.
The credit check serves two main purposes. First, it is used to verify the identity of all people signing the application. Second, it's used for qualification purposes and helps us offer you the best pricing we can based on your credit history.
There are many things that contribute to your credit history. If you aren't sure what your score is, you can check your credit score for free at CreditKarma. But if you have no credit history, you won't be eligible for our program.
Our lenders will request your Social Security number once you move forward with an application. But your Social Security number is not needed to check your rates and see what you can save using our Find My Rate tool.
U.S. Citizen - A person who was born in the United States, including the lower 48 states, Alaska, Hawaii, Puerto Rico, Guam, and the U.S. Virgin Islands; or who became a citizen through naturalization; or who was born outside the United States to U.S. Citizen parents under qualifying circumstances (derivative citizenship) and who has not renounced U.S. citizenship.Permanent Resident - Any person not a citizen of the United States who is residing in the U.S. under legally recognized and lawfully recorded permanent residence as an immigrant. Also known as "Permanent Resident Alien," "Lawful Permanent Resident," "Resident Alien Permit Holder," and "Green Card Holder."At this time, only U.S. citizens and Permanent residents are eligible for Purefy loans through our lenders. If you are a resident alien with a US Citizen as a cosigner, you can refinance with Citizens Bank, one of our lenders.
Your permanent address is the location that you consider to be your primary place of residence (like your parents' or guardian's address). Your mailing address is wherever you want to receive all of your loan documents.View Student Loan Refinancing FAQS
Yes. We encourage you to maximize grants, scholarships and other free financial aid before taking student loans. Borrow responsibly and take out only what you need. Many people think they don't qualify for Federal aid and fail to realize the opportunity by not applying for it. In addition, there are a few sources of aid such as unsubsidized Stafford and PLUS loans that are available regardless of need. The FAFSA form is free so there is no good excuse for not applying. Call the Federal Student Aid Information Center (FSAIC) at 1-800-4-FED-AID (1-800 433 3243) and ask for a free copy of The Student Guide: Financial Aid from the US Department of Education. This toll free hotline is run by the US Department of Education and can answer questions about federal and state student aid programs and applications. You may also follow this link for additional information - https://fafsa.ed.gov
Yes. Just like a mortgage or an auto loan, your credit will determine if you are approved and also what rate you may qualify for. These loans are not guaranteed by the federal government and typically require the presence of a credit-worthy co-signer whose credit will also be checked.
The terms will vary by lender but most loans do have a common set of features. The interest rate on a private student loan is determined by your credit risk and loan funds are sent directly to the school. Repayment typically begins shortly after leaving school, but interest almost always begins to accrue immediately after the loan is disbursed. Failure to meet the terms and conditions will damage the credit of both the borrower and cosigner.
Unless you have a strong credit history, you should apply with a cosigner. It's also important to remember that not all lenders provide loans to all schools, Purefy's comparison tool helps simplify this process by showing only loan programs which appear an option for the school of your choice.
Each situation is quite different but in general the process can take as little as 2 weeks if you are fully prepared with all the supporting documents. Still, we suggest you plan for around 30 days to be safe.
Use this checklist to help you prepare to complete the online application process.