Refinancing with Earnest
Refinancing rates from 2.49% APR. Checking your rates won’t affect your credit score.
Federal student loan interest rates start at 4.45% for the 2017-2018 school year. If your student loan rates are higher than that, there’s not a lot you can do about it while you’re in school.
But you’re not entirely without options. Here are some steps you can take to get better student loan rates in the future.
3 steps to take if your student loan rates aren’t the best
If you want to get on the right track with your student loan rates, it’s important that you understand how your rates stack up, prepare to get better rates the next time you apply, and start looking into your post-graduation options.
1. Know where you stand
To get an idea of whether your rates are high, it’s important to compare them with average student loan rates.
For example, if you have federal student loans, your rates are among the lowest you can get. Private student loan rates can vary by lender, but you can look at some of the top private student loan companies to see what rates they offer.
If you find that your student loan rates are reasonable, or even low, then you might not need to do anything else. If, however, your rates are high, you might want to start looking at some other options, especially if you plan to borrow again before you graduate. Keep in mind that some options, including private student loans, require a credit check.
2. Use a cosigner next time
You don’t need a cosigner for federal student loans. But if you applied for private student loans and got a high rate, a cosigner might be able to help you do better next time.
Pick someone who has a great credit history and solid income. Lenders consider both factors when determining your interest rate.
Getting a cosigner can be tough, though. You’re asking someone to take on the responsibility of paying off the debt if you miss payments or default. The loan also will show up on their credit report, potentially making it difficult for them to borrow in the future.
To make it easier, consider student loan companies that offer cosigner release. This feature allows you to apply to have your cosigner removed from the loan after two to four years of on-time payments. It’s not guaranteed, though. You’ll need to have good enough credit and income to continue repayment on the loan in your name only.
Opting for a student loan with cosigner release can alleviate some of the concerns a potential cosigner might have about making such a long-term commitment.
3. Start looking at refinancing opportunities
If you’re close to graduating, you’ll soon have an opportunity to potentially refinance your student loans with a lower interest rate.
Some of the best student loan refinancing companies offer low variable and fixed interest rates. But if you’re thinking of refinancing federal loans, take these facts into consideration:
- You’ll lose access to Public Service Loan Forgiveness.
- You won’t be able to take advantage of income-driven repayment plans.
- You might not get a lower interest rate than what the Department of Education offers.
Check to see if you can get a cosigner. The right cosigner can improve your chances of getting a lower interest rate when you refinance.
As you’re looking at different terms student loan refinancing companies offer, don’t look at just the interest rate. Consider what your new monthly payment would be. Even if you nab a low interest rate, you might regret refinancing if your monthly payment becomes unaffordable.
Avoid procrastinating and save money
The longer you take to address high interest rates, the more money you’ll end up paying in interest. This is especially the case for private student loans and Direct Unsubsidized Loans through the federal government. These loans start accruing interest as soon as they’re disbursed.
Even if you don’t plan to take action anytime soon, start thinking about your options and what you’re going to do. That way, you’ll be ready when the time comes to make a decision.
Need a student loan?Here are our top student loan lenders of 2019!
|2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 5/22/2019. Variable interest rates may increase after consummation.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
4 Important Disclosures for Discover.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.99% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.50% – 11.35%*,3||Undergraduate and Graduate|
|4.84% – 13.49%4||Undergraduate and Graduate|
|4.25% – 11.30%5||Undergraduate and Graduate|
|4.50% – 9.47%6||Undergraduate and Graduate|
|3.74% – 9.72%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.32%8||Undergraduate, Graduate, and Parents|