Student Loan Refinancing
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PNC Bank offers a variety of financial products and services, including private in-school student loans. If you took out PNC student loans to get through school or to help your child pay for college, refinancing them can potentially help you save money, get more flexibility with your repayment plan and more.
This guide will help you learn how to refinance PNC student loans, the benefits and drawbacks of the process and how to ensure you get the best deal.
PNC Bank offers a variety of private student loans for both undergraduate and graduate study. Options include:
The bank is currently offering competitive interest rates, but there may still be several reasons to consider refinancing your debt with another lender:
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Unlike federal student loans, PNC student loans don’t offer access to loan forgiveness and repayment assistance programs, the federal student loan payment pause or income-driven repayment plans. So there isn’t a lot you can lose by refinancing them, as long as the terms are right. Here are some major benefits to consider.
Depending on how much debt you have and your current interest rate, you could potentially save hundreds or even thousands of dollars by refinancing.
To give you an example, let’s say you have $15,000 in PNC student loans with a 10-year repayment term and a 15-year repayment term, and because your credit wasn’t in great shape when you applied, your average interest rate is 8%, giving you a monthly payment of $143.
Now, let’s say that your credit score has improved since you graduated, and you’d like to switch to a 10-year repayment plan to save some money. You manage to score a 3% fixed interest rate, and despite the shorter repayment term, your monthly payment only jumps by $2 to $145.
But because you’ve cut your repayment term by five years and qualified for a much lower interest rate, you’ll end up saving a whopping $8,422 in interest over the course of your repayment.
If you have a variable interest rate on your PNC student loans, you may be facing increasing rates over the next couple of years. By locking in a fixed rate now via refinancing, you could save yourself from higher monthly payments and interest charges.
With the ability to refinance your loans with a repayment plan ranging from five to 20 years, you can decide what your monthly payment is and how long to repay. If your budget can handle a higher payment, for instance, you could reduce your payment term and save both time and money.
Alternatively, you could extend your repayment plan and get a lower monthly payment, which will increase your total interest charges but provide you with a more affordable payment amount. Lowering your monthly payment is also a good way to reduce your debt-to-income ratio, which can improve your chances of getting approved for a mortgage loan.
Even if you haven’t had any problems with PNC, you may be interested in a lender that offers more flexible deferment and forbearance options, or you may want a lender that has other programs to benefit their borrowers, such as interest rate discounts on other loans, unemployment protection, career resources and more.
Take some time to research other student loan companies to see which features you like and might want to have as you work to pay down your debt.
If you’re a parent, transferring the debt to your child for repayment can remove the debt from your credit report, making it easier for you to access credit when you need it. It’ll also free you from the responsibility for the debt, which could alleviate some of your own financial pressures, such as retirement and health care costs.
On the flip side, if you used a cosigner to get approved for the loans, refinancing them in your name only can remove that responsibility from their hands.
Although the benefits often outweigh the drawbacks when refinancing private student loans, there are still some potential downsides to keep in mind.
You can generally get approved for student loan refinancing if your credit score is in the mid-600s and you have a salary of $24,000 or more. But, if you’re hoping to get a lower interest rate than what you’re paying right now, your credit score and income will likely need to be much higher.
According to Purefy data, the average borrower who refinances their student loans has a credit score of 774 and an annual income of $98,156. That’s not to say you need to meet those thresholds to get the terms you want, but it can make it easier.
Fortunately, you can get prequalified with student loan refinance companies before you apply, so you can compare rate quotes with what you have now without making any commitments.
If your credit or income isn’t where it needs to be, you can get a cosigner, or you can wait and work to improve your eligibility.
Student loan refinance interest rates have been on the rise since early 2022, and with the Federal Reserve planning to keep hiking its federal funds rate, it’s likely that we’ll see student loan interest rates continue to climb.
Variable interest rates typically start lower than fixed interest rates to compensate you for taking on the risk of rising interest rates. But if you were to switch from a fixed interest rate to a variable one, that means you’ll likely end up paying more money over time.
If you extend your repayment term through refinancing, it could end up costing you more money in the long run. This may not be true in some cases, depending on how much lower of an interest rate you can get, and the difference may not be huge.
But in the end, paying off a debt over a longer period will generally cost you more in interest charges. Consider using a refinancing calculator to get an idea of what the difference will be.
As you work through the process of how to refinance PNC student loans, you may be wondering if it’s a good idea to refinance private student loans in the first place.
With federal student loans, there are a lot of reasons to think twice about refinancing. Federal loans often come with lower interest rates than private student loans, especially if your private loan interest rate is on the high end of the spectrum. They also offer access to a lot of different repayment plans and relief options if you’re struggling.
But private student loans, including those offered by PNC Bank, don’t offer those perks. So, it ultimately comes down to your goals as you work to pay off your debt. If you can qualify for a lower monthly payment, more flexibility or a better customer experience, it may be a no-brainer.
Student loan refinancing combines your current loans into a single loan with a new rate and term. See how much you can save by entering your loan information below, or by getting quotes from multiple lenders using Purefy’s rate comparison tool.
Lifetime Interest Savings
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In addition to figuring out how to refinance PNC student loans, it’s also important to know if you’re a good candidate and when the right time is to consider it. Here are some factors to guide your decision-making process.
As previously mentioned, the best candidates for student loan refinancing have high credit scores and near six-figure incomes. If you have a good job and you’ve spent considerable time building your credit history, you may be able to qualify for some of the best interest rates lenders have to offer.
You can check your FICO score for free using a service like Experian or Discover Credit Scorecard. If you’re already using a credit monitoring service that offers a VantageScore credit score, you may want to add one that offers a FICO score since it’s the scoring model that most major lenders use.
You should also get a copy of one of your credit reports — Experian provides free access to your Experian report through its credit monitoring service. You can also get a copy of each of your reports from the three major credit bureaus through AnnualCreditReport.com weekly through the end of 2022, then every 12 months after that.
Take the time to review your credit report to see if there are areas you need to address, such as paying down credit card balances, getting caught up on past-due payments or disputing inaccurate credit report information. If you have a major issue on your credit reports, such as a foreclosure or bankruptcy, you may need to wait a few years until your credit score has recovered enough to apply for refinancing.
As interest rates increase, it’s a good time to lock in as low of an interest rate as you can. Take some time to get prequalified for refinancing to get an idea of whether you can get a lower interest rate and what your savings might look like.
The longer you wait, the higher the chances that interest rates will go up and your potential savings will shrink.
Being a parent with student loans for your child can have a significant impact on your ability to save for retirement and cover other necessary expenses that come with getting older. Being able to transfer that debt to your child can relieve a lot of pressure.
On the other hand, if you’re the college graduate and your parent cosigned your loan, refinancing can remove their responsibility and serve as a gesture of gratitude for their help while you were in school.
Whether you’re ready to refinance your PNC student loans or you simply want to start the process to get an idea of whether it’s the right move for you, here are some steps to help you through the process.
The most important step is the first one, and that’s laying the groundwork to determine if refinancing is right for you. Think about your current financial situation and how you want to handle your student loans.
For example, are you hoping to pay off your student loans early or get an extension and a lower monthly payment? Do you want a lower interest rate or a better customer experience? Think about these questions to get an idea of what you want.
It’s rarely a good idea to go with the first offer you get, even if it’s better than what you already have. Using Purefy’s rate comparison tool, you can get prequalified with multiple lenders in just two minutes.
With this process, you’ll be able to compare offers side by side, including interest rates, repayment terms and monthly payments, streamlining a process that would otherwise require you to go through prequalification with each individual lender.
You’ll also want to compare other features, such as customer satisfaction ratings and complaints, cosigner release programs (if applicable) and other features to make your life a little easier.
It’s important to note that prequalified rate offers aren’t final. You’ll still need to submit an application and undergo a complete underwriting process to get a final rate.
But prequalification offers can still give you a good idea of which lenders will give you a better deal, so take the time to compare your options and settle on the one that best fits your needs and goals.
Don’t be afraid to take your time with the process, either. Even if you’re hoping to complete the process fast, you don’t want any surprises after you switch to your new lender.
Once you’ve chosen your lender, you can click through to the lender’s website from the Purefy rate comparison tool. From there, you can submit your official application.
Lenders can vary in what they ask for, but you’ll typically need to share certain personal information, such as your name, date of birth, Social Security number, email address and phone number. You’ll also need to provide details about your student loans, such as the payoff amount and your current lender or loan servicer.
Lenders will typically also ask for various documents, such as a pay stub, W-2 form or bank statements to confirm your income, a government-issued photo ID and more. Check with the lender before you start the application to get an idea of what they need, so you can have them ready.
Once you submit the application, the lender will underwrite it. This process includes a full credit check and a review of the information you provided on your application to determine whether you’re eligible to refinance and what your interest rate will be.
Once the underwriting process is complete, you’ll receive an official offer, which may or may not be similar to the prequalification quote. If you don’t qualify for the terms you want on your own, you can potentially add a cosigner during this process to boost your odds. If you can’t, and the offer is much worse than it was initially, you may want to go back and repeat the first few steps.
If you decide to accept the lender’s offer, you can sign the documents you received electronically. Before you do so, make sure you read through the terms and conditions and make sure there are no surprises.
Once you’ve signed, the lender will fund the loan and use the money to pay off your existing student loans. Before that happens, though, it’s important to keep making payments on your original loans to avoid late fees or credit score damage. In the event that you overpay, you should get a refund for that amount.
Once your debt has been transferred to your new lender, set up automatic payments and enjoy the benefits of your refinance.
Depending on your situation, your PNC student loans may be just fine how they are. But even if you think that’s the case, it’s still a good idea to shop around to make sure. Gathering information about refinancing and how it might help in your situation can assist you in making an educated decision about your debt.
And with rising interest rates, it may be more urgent to start this process now. If you put it off, you may end up with less savings overall. Locking in a low fixed interest rate now can give you some peace of mind.
Before you start the process of refinancing, though, consider your reasoning and whether other options may be a better fit. For example, if you can’t pay your student loans, a forbearance or deferment plan may be a better solution, at least in the short term. This is especially true if you’re not eligible for better terms with another lender.
But if you go through the prequalification process and you can get the terms you want for your student loans, now may be the best time to pull the trigger.
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