Editor’s Note: Iowa Student Loan is now named ISL Education Lending.
If you’re one of those people who keeps an eye on macro student loan interest rate trends, then you have been watching as rates have continued their downward path. The question is how much lower will they go? We may be reaching the lows now — and it may be the best time to refinance and get the best rate available.
One of the most trusted names in student loan refinancing has dropped their fixed rate to a super low amount, and it may be a great time to consider refinancing your college loans.
ISL Education Lending is now offering a super low 2.55% fixed rate
A premier company in the student loan refinancing space, ISL Education Lending, has announced that they are offering fixed financing at 2.55%. That rate is applicable for loans from a minimum of $5,000 to a max of $300,000 and include the option of a repayment term of 5, 7, 10, 15, or 20 years. In fact, Iowa Student Loan is also waiving all loan processing, application, and origination fees.
If you have been watching student loan refi rates, then you know this is a solid offer for a fixed term loan.
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But what do you need to qualify for such a great offer?
Like most banks and financing companies, ISL Education Lending has some minimum eligibility requirements that they consider. Obviously, the better your personal statistics—the better the rate you can expect. These are the primary considerations most banks will look at:
- A minimum credit score of 670 or a cosigner (parent or friend with excellent credit).
- Stable income with long-term prospects.
- 40% of less for your debt-to-income ratio which is figured by dividing all of your monthly debt payments by your gross monthly income.
The benefits of a fixed rate vs variable rate loan
In financing, you can get loans with either a fixed or variable interest rate. With a fixed rate loan, your interest rate will stay the same for the life of the loan. So, in terms of the ISL Education Lending fixed rate of 2.55%, no matter what changes in the economy, the rate will always stay the same.
With a variable rate loan, it’s more complicated. They usually start at a lower rate which is what entices people to use them. However, the rate is subject to change annually based on the lender’s prime lending rate plus or minus a predetermined amount.
For example, if the variable rate is Prime +/- 1%, the rate will change to whatever that amount is at that point in time. The downside to this is it’s re-determined annually, so the rate can continue to climb as the prime rate goes up negatively affecting loan interest.
While this has not been much of a factor in the last couple of years, when the economy begins to rebound the Fed will look to raise their lending rate which affects the prime rate for banks and, invariably, loan rates.
Why student loan refinance rates have dropped in 2021
With the country still reeling from the economic impact of the coronavirus pandemic, the Federal Reserve Bank (the Fed) recently reissued dovish (or slow growth) guidance in the quarterly testimony on the economic outlook before both houses of Congress. While the Fed maintained that there were many possible bright spots in the economy, it’s anticipated that 2021 will be the start of a slow recovery predicated on the success of the nationwide vaccine program.
When you couple that news with the extended federal loan deferment program that will now last until September 30, 2021, many private lenders are dropping their 2021 rate projections making it a great time to consider refinancing your student loans before rates rise again.
How to compare the best fixed refinance rates
If you have been keeping your eye on the refi rates waiting for an optimum time to refinance, then you have probably spent a lot of time bouncing from site to site to get the latest, most up-to-date information.
What if we told you there was a better way? At Purefy, we understand the difficulty in staying on top of interest rates offered by multiple companies.
To speed up and simplify the process, our Compare Rates tool quickly provides an in-depth side-by-side comparison of top lenders with their best offers, including ISL Education Lending.
How does it work? You enter some basic personal information and, based on your credit history and income, you receive pre-qualified offers that include interest rate options, terms available, and specific offers.
The lenders that work with Purefy offer loans with no fees and no prepayment penalties. And the best part, all of this information is free and doesn’t impact your credit report whatsoever.
Once you choose a lender
When the time is right and you have chosen a lender, Purefy offers a free consultation with one of our student loan experts who can help you with any questions and with filling out your loan application. Once complete, you will work directly with the lender to finalize the loan and disperse the funds to your current loan holder. Simple, easy, and free.
Summing Up
Fixed rates are often preferred for student loan refinancing over riskier variable rates, and current refinance fixed rates are super low (2.55% with ISL Education Lending). It’s easy to compare lenders and rates and get a side-by-side report that gives you all the financial details that you need to make an informed decision about your future.
Try our Comparison Rate Tool today and take advantage of low interest rates at Purefy.
