What is refinancing a student loan?
Refinance or refinancing can be understood through this example. Suppose you’re studying a data science course by paying 50k INR in an institute and the same course is being taught in a different institute at a reasonable rate of 17k INR. Where would you go? For any smart people and our smart viewers, we would definitely go for the second one. When everything is the same then why pay the extra amount? Refinancing means that your current loan will be paid by a lender in order to save you from paying extra interest rates and later you have to refund him the amount he has paid at a reasonable interest rate. In this blog, we are covering topics related to refinancing.
Why refinancing?
It will save you from paying extra interest rates and will save you a lot of money. Every point counts.
Eligibility for refinancing-
- Employment history
- Credit score
- Credit history
- Source of income
- Debt to income ratio
- Financial behaviour
- Residency status
When should you refinance?
If you’re secured with a steady income every month. Especially after your studies when you start your job or after getting a job. So that you can pay the amount on monthly basis.
PROS and CONS of refinancing-
PROS-
- Lower interest rate
- Save you money
- Pay less money on a monthly basis
- Help you get rid of the debt
- You can choose your own time for payment
- Compiling many loans into one.
CONS-
- Losing federal loans benefits
- Not eligible for the federal loan forgiveness programme
- Limited flexibility
The top 5 refinancing companies of November 2021-
- Sofi – It is an online personal finance company based in San Francisco. They provide services like loans, personal loans, refinancing etc. Their interest rates start from 2.49%
- Earnest – It is a tech company based in San Francisco and their interest rates start from 1.88%
- Laurel road – The interest rate of Laurel road start from 1.64%.
- CommonBond – The interest rate of CommonBond is 1.96%.
- Citizens Bank – Their interest rate starts from 1.99%.
Points to remember –
- Check CIBIL score, whether it is above 600 or not.
- Opt for refinancing during the early stages of the loan.
- Read the agreement/terms and conditions carefully.
Why refinancing?
It will save you from paying extra interest rates and will save you a lot of money. Every point counts.
Eligibility for refinancing-
- Employment history
- Credit score
- Credit history
- Source of income
- Debt to income ratio
- Financial behaviour
- Residency status
When should you refinance?
If you’re secured with a steady income every month. Especially after your studies when you start your job or after getting a job. So that you can pay the amount on monthly basis.
PROS and CONS of refinancing-
PROS-
- Lower interest rate
- Save you money
- Pay less money on a monthly basis
- Help you get rid of the debt
- You can choose your own time for payment
- Compiling many loans into one.
CONS-
- Losing federal loans benefits
- Not eligible for the federal loan forgiveness programme
- Limited flexibility
The top 5 refinancing companies of November 2021-
- Sofi – It is an online personal finance company based in San Francisco. They provide services like loans, personal loans, refinancing etc. Their interest rates start from 2.49%
- Earnest – It is a tech company based in San Francisco and their interest rates start from 1.88%
- Laurel road – The interest rate of Laurel road start from 1.64%.
- CommonBond – The interest rate of CommonBond is 1.96%.
- Citizens Bank – Their interest rate starts from 1.99%.
Points to remember –
- Check CIBIL score, whether it is above 600 or not.
- Opt for refinancing during the early stages of the loan.
- Read the agreement/terms and conditions carefully.
To know more about refinance related information visit our official website https://blog.foreignadmits.com