According to the Federal Reserve, U.S. student loan borrowers owed more than $1.67 trillion in federal and private student loan debt as of June 2020. This is an intimidating figure, even for the optimistic graduate.
When facing financial difficulties, many borrowers contemplate different ways how to save on student loans. If you are a current college student or a recent graduate who is currently drowning in student debt, you may be wondering what your options are.
There are multiple factors to consider when searching for ways to save money on student loans. If you are searching for how to lower student loan rate, one of the best ways to do it is through student loan refinancing.
How to save on student loans
We are living in troublesome financial times. Everyday expenses like rent or mortgage, phone bills and electricity can take a toll, and that’s before you factor in other bills like your student loan repayment.
But there’s good news. If you have a credit score of 650 or more, refinancing your student loans may be able to significantly improve your financial situation and save you big money on lifetime interest.
Whether you are hoping to save money on interest or make a much-needed change to your student loan repayment terms, student loan refinancing can help you do it. Student loan refinancing is a common answer when borrowers consider how to save on student loans.
Why is credit score important for refinancing?
Building up a good credit score isn’t always easy. A variety of factors go into a credit score, including payment history, debt-to-income ratio, and the length of time your accounts have been open. If you have made some unfortunate financial decisions in the past, a score of 650 may be out of reach for you. But there is time to turn it around.
There is a reason why so many borrowers strive for a good credit score. The truth is that keeping a high credit score can unlock the potential for strong financial health now and in the future. With a high credit score, you’ll have demonstrated to lenders that you are a trustworthy borrower. This comes with its own unique set of benefits.
If you have been working hard at building your credit score and have settled at a score of 650 or more, you have access to unique opportunities not afforded to every borrower.
For example, you may qualify for extremely low interest rates, or lenders may let you borrow more money than someone who has a low credit score. It’s important you take advantage of low interest rates in order to set yourself up for a bright financial future.
Student loan refinancing is just one way to lower student loan rates. Exploring student loan refinancing sooner rather than later can put you on the road to a debt-free lifestyle faster than you might have anticipated.
How to refinance your student loans
The first step in the process of student loan refinancing is determining the reason behind why you want to refinance in the first place. This is key because determining why you want to refinance can help you develop the right plan when it comes to making this major financial move. The clearer you are about your goals, the more focused your plan will be.
Different borrowers may have different reasons for refinancing. For instance, perhaps you are currently paying much more than you wanted to in interest each month. If this is true, your ultimate goal for refinancing might be to lower your interest rate. You can then begin shopping online for the lowest interest rate available for someone with your credit score. Or maybe you are currently drowning in debt and can no longer afford your monthly student loan repayments. By refinancing, you can lower your monthly payment and start allocating more of your budget toward other necessary expenses.
There is also the possibility that you have too many monthly payments to keep track of, especially when dealing with multiple student loan lenders. Refinancing is a good way to consolidate your student loan debt into one monthly payment. This has helped many borrowers simplify their financial lives.
How can I qualify for the lowest student loan refinance rates?
Keep in mind that just because you have a credit score of 650 or more does not mean that you automatically qualify for student loan refinancing. Several qualifications must be met in order to start the process. For example, you will need to have steady employment and income to prove to lenders that you can keep up with your new student loan repayments. Don’t forget to consider this when coming up with ways how to save money on student loans.
How to refinance your student loans through Purefy
Like any other major financial move, figuring out how to save money on student loans requires weighing your options to ensure you make the best possible decision.
And Purefy is here to make that process easy and fast with our marketplace of top refinance companies.
With a 2-minute rate check, you can save time comparing real pre-qualified rates from our hand-picked selection of the best lenders.
Simply fill out some quick information and see your best rates all at once and in one place – with no impact to your credit and zero fees.
Why refinance student loans and save money
Student loan refinancing has helped countless borrowers achieve their financial goals sooner.
Whether you are seeking to save money on interest, relieve yourself of some of your current financial stress, or pay off your debt sooner, refinancing your student loans can help you achieve one or several of your financial goals.