At this point, it is no secret that student loans can be a complete nightmare to deal with. The idea of struggling to get a student loan and then repay it can make your head spin. However, you can ease your burden by considering student loan refinancing and student loan forgiveness programs.
Student loan refinancing, in a nutshell, is the process of acquiring new loans at all-new interest rates, payment dates, and payment terms. This generally happens when the initial interest rates and credit terms in the market change.
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Should you go for Student Loan Refinancing?
It is essential to ask yourself why you want to opt for student loan refinancing in the first place. Student loan refinancing makes sense in the following situations:
Having Student Loans at Sky-high interest rates
The interest rates for student loans are known to vary. This makes repayments for the loan difficult. Student loan refinancing can do a lot to save you significant amounts of money in a situation like this.
If you have borrowed a Private Student Loan
If you have private student loans, refinancing may be useful, especially considering you will not be eligible for federal loans.
Having an Above-Average Credit Score
If you have managed to build an excellent credit score unlike most borrowers, your chances of getting a loan at a reasonable interest rate are high, which is why student loan refinancing can prove to be a great move.
Do you Qualify for Student Loan Refinancing?
There exist many options for student loan refinance. However, you need to meet specific criteria to qualify. As you try to opt for student loan refinancing, you ought to keep in mind that getting this done for private loans is challenging in comparison to federal loans.
Private lenders generally need you to have built an above-average credit score. In addition to this, you may be required to show some documents proving that you have a regular and stable source of income that allows you to refinance your loan.
If you do not have an adequate credit score or monthly income, you will have to apply for student loan refinancing with a cosigner. Here’s what lenders generally need from your side:
- Credit score
- Savings and Assets
- Yearly Income
- Your degree
What are your Student Loan Refinancing options?
While there are a bunch of student loan refinancing options, here are a couple of ones that managed to stand out.
LendKey has managed to cement itself as a credible source of loans. This lender merges the money from credit unions as well as community banks and offers loans to borrowers at reasonable prices. LendKey’s loans range from $5000 to $300,000. Keep in mind that you cannot avail a loan from LendKey if you are not a graduate.
First Republic Bank
First Republic Bank is known to be one of the lowest fixed rate student loan refinancing options on the market. It can go as low as 1.95%. However, the catch is the fact that they have stringent requirements. These requirements include a higher monthly income, an above-average credit score, and borrowing higher loans.
Keep in mind that First Republic does not provide any deferment or forbearance periods. The loans that First Republic offers are private. In other words, you lose the privileges that come with the federal programs that you might be eligible for.
What is Student Loan Forgiveness?
In a nutshell, student loan forgiveness sets you free from the obligation of having to repay a chunk of the loan (or the entire loan) you have borrowed. However, it is not easy to become eligible for student loan forgiveness. If you do get approved for a student loan forgiveness program, you will no longer be subject to any loan repayments.
Types of Student Loan Forgiveness Programs
There are a variety of student loan forgiveness programs. Here are some of the ones you ought to know about:
Public Service Loan Forgiveness
These programs are typically available to government employees as well as non-profit workers who have federal loans and are eligible for this student loan forgiveness program.
If you are an eligible borrower, you will have the option to have the remainder of your loan forgiven after making 120 loan repayments. Keep in mind that you will have to make these repayments while under the income-driven repayment plan.
State-sponsored Repayment Assistance programs
Student loan forgiveness programs by states like this one can prove to be beneficial for doctors, nurses, lawyers in some state, and licensed teachers. These workers are bound to find it easier to take care of their debt. If you wish to employ this option, be sure to contact the higher education department in your state to find out if you qualify for this program.
Income-Driven Repayment Forgiveness Program
There exist four main income-driven repayment plans that the federal government offers. You may use these plans to cap your loan repayments at a pre-defined percentage of your monthly income. If you opt for one of these plans, your chances of having your balance forgiven after a 20 to 25 year period go up.
Student Loan Forgiveness Programs for Nurses
Most nurses find themselves weighed down by student loans. Fortunately, they have a variety of options at their disposal. Among the plethora of choices available to them, most of them are generally better off with the public service forgiveness program.