This 2024, start your year by reducing some of your financial obligations, including student loan payments. Various American refinancing companies are offering huge cuts in your current rate of loan. To learn about these companies and their terms and conditions, read the following information carefully.
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What does Refinancing mean? How does it Work?
Refinancing refers to the process in which the person lends a loan from a different entity than its current one. If the company serves them in the best of the person’s financial interest. These benefits may include, reduced interest rates, favorable loan duration, and a different scheme of loan.
The approval of the refinancing loan is done in various steps and is evaluated thoroughly. Some of these steps may include getting your current loan accessed and your credit score checked, filling in application form(s), agreeing to the terms and conditions, etc.
Student loan refinancing is a part form of refinancing service that is open to be availed by students in particular. Students can replace their current lenders and switch to a company that offers loans on terms and conditions favorable to them such as longer time duration and low interest rate level.
Factors to consider while choosing the refinancing company, including, interest rates, repayment terms, eligibility requirements, co-signing options, additional benefits, customer service etc.
Information related to several refinancing student loans is covered in the next sections.
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SoFi Student Refinancing
SoFi performs a range of functions to benefit regular individuals by offering them renowned financial services. One of its services includes offering student loan refinancing. In the competitive market of refinancing services SoFi Student Refinancing stands out the most due to its student-friendly approaches and schemes.
An overview of its basic scheme structure is illustrated as follows:
- Interest Rates and Terms:
- Fixed Rates:
- For a time duration of 5 years, the interest rate is generally fixed ranging from 5.24 APR to 9.07 APR.
- In case of a term exceeding more than 5 years, the interest increases depending upon the increased timeframe. For example, The interest rate can increase ranging from 6.35% to 9.59% for a 20-year term.
- Implying that if a person opts for fixed rates then the interest rates are going to be constant for them for a specific duration.
- Variable Rates:
- Rates can vary from 6.24% to 9.25% APR for a term lasting 5 years in this case.
- Longer term loans can affect the interest rates similar to how it does in fixed rates cases. Where for a 20-year term the rate can go up to 9.84% APR.
- If a person chooses variable rates over fixed rates then it would mean that their interest rate is prone to fluctuating and can vary depending on the market.
- In the case of fixed rates, a rate cap of 13.95% APR is applied, however, variable rates can go as high as it gets affected by the market.
- Fixed Rates:
- Loan Duration and Amount:
- A loan can be refinanced for a minimum amount of $5,000 where the duration can range from 5 to 20 years.
- People can lend the amount depending upon the plan that works the best for them.
- SoFi doesn’t charge any application fees to its potential clients including no penalty fees facilitating the loan refinancing procedure much more smoothly.
- Lenders setting their payment method to automatic payment method can get up to 0.25% of interest rate reduction.
Eligibility Criteria and Application Procedure
The eligibility criteria to apply for the SoFi refinancing include the following conditions:
- Candidate must be a citizen of the U.S., a permanent resident or a visa holder.
- Having a decent credit score typically over 740 is required.
- It is mandatory to have steady income sources or a job.
- A minimum qualification must be attained that is required to get enrolled in the aiming university.
- Lenders cannot apply for a loan of less than $5,000
- Having a low debt-to-income ratio is often favorable while applying.
- It is essential to find a co-signer if you are unable to meet the credit or income requirements, Where the co-singer should agree with the terms and conditions applied to them after co-signing.
The SoFi student loan refinancing can be done by people from all over the 50 U.S. states and District of Columbia.
Application Procedure
After making sure that you satisfy all the necessary requirements, begin with your application journey, steps for which are given as follows:
- Visit “Refinance Student Loans: Fast, Easy, and All Online – SoFi” register, and log in to the site.
- Navigate to the application form and begin by entering your personal information like “name, ph. no., address, employment details, etc.”
- An option to pick from the loan term will appear, opt from the variable and fixed options.
- Supporting documents within the specified space limit have to be uploaded next in the given space.
- Get your credits accessed.
- After filling out the application the company will let you know their decision and guide you with the further steps.
Student Loan Refinancing Companies 2024
| Lender | Credible | Splash Financial | Earnest | Laurel Road | PenFed (Purefy) | ELFI | CommonBond | LendKey |
| Best For | Loan & Lender Comparisons | Competitive Rates | Additional Benefits | Flexible Eligibility | Married Couples | Customer Service | Financial Hardship Assistance | Educational Resources |
| Founded | – | 2013 | – | 2013 | 2017 | – | – | – |
| Unique Features | Customizable comparison tool | Flexibility in underwriting | Flexible repayment, skip payments | Works with Associate’s Degree students | Couple Loan option | High customer service standards | Hardship assistance, payment pause | Interest-only payment option |
| Eligibility | – | Flexible, considers income and degree | Incomplete degrees accepted | Broad range, including Associate’s Degree | Both U.S. citizens and permanent residents | Minimum credit score of 680 | Minimum credit score of 660 | – |
| Application Process | Simple and organized | User-friendly, soft credit pull | Online, customizable loan terms | Online, simple process | Transparent, online | Online, requires documentation upload | Online, minimalistic | Online, with educational resources |
| Special Considerations | – | Lack of educational resources on website | Not available in five states | Website lacks detailed information | Credit union membership required | Minimum loan amount of $10,000 | Not available in certain states | Customer complaints regarding billing |
| Forbearance Options | – | – | – | Up to 1 year | – | Up to 1 year | Up to 24 months | Up to 18 months |