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Trade school graduates in the United States are typically well-paid and highly sought-after. The 2019 U.S. News and World Report Best Jobs rankings show that electricians, plumbers, ironworkers and steelworkers all make a median annual salary of more than $50,000, and those in the top 25% of earners make close to or over $70,000. In 2018, 91% of contractors surveyed in the construction industry reported having difficulty finding skilled workers, according to a report by the USG Corp. and the U.S. Chamber of Commerce.
Still, vocational school student loans can place a burden on recent graduates. If you want to save money on trade school student loans, one option is to refinance your debt to a lower interest rate. But finding a lender willing to refinance trade school loans can be difficult.
Here’s what you need to know about refinancing student loans for vocational school.
Trade school student loans
Going to a vocational school can be a smart alternative to a four-year college. In many industries, you can get the job training you need from a trade school and start working sooner.
To pay for trade school, you may qualify for grants, which may not need to be paid back. Maximize grants first by filling out the Free Application for Federal Student Aid, known as the FAFSA. Many vocational schools are also eligible for federal student loans. This type of debt often comes with lower interest rates and more flexible repayment terms than private student loans, making it a good option to fund your education.
Private technical school loans are another way to pay for trade school, but they can come with interest rates upwards of 12%. For example, if you took out $33,000 in vocational school student loans at 12% interest, for example, you’d pay back a total of $56,815 over the course of 10 years. That’s nearly double what you originally borrowed. Make sure to take out the maximum amount of federal loans you qualify for before considering private loans.
Saving money on trade school student loan repayment
If you already have high-interest student loans, however, you aren’t stuck with them. By refinancing your student loans for technical college or vocational school, you may be able to reduce the amount of interest you pay overall.
When you refinance your debt, a private lender pays off your prior loans and issues you a new one for the total balance. The refinance loan could have a new, potentially lower interest rate and repayment term. In order to refinance, you must qualify based on your credit score, income and other factors. Generally, lenders require credit in the good-to-excellent range, meaning a score of 670 or higher.
To find out how much you could save by refinancing, enter your loan information into our refinancing calculator.
Finding a lender to refinance trade school loans
Finding a lender who will refinance vocational school student loans can be difficult. Most companies require you to complete an associate degree or a bachelor’s degree before refinancing. Just a vocational school certificate program usually does not qualify.
One of the few lenders that will work with vocational school student loans is Citizens Bank. It offers competitive interest rates if you meet the minimum income requirement of $24,000. To qualify, you must have at least $10,000 in student loans and a credit score of 680 or higher.
You can get a quote for a refinancing loan after undergoing a soft credit check, which does not affect your credit score.
Other trade school student loan repayment options
If you don’t get approved for refinancing, there are other ways to manage your debt.
- Take out a personal loan: If you took out high-interest student loans for technical college, it might be possible to find a low-interest personal loan to pay them off.
- Sign up for an income-driven repayment plan: If you’re struggling to keep up with federal student loan payments, consider signing up for an income-driven repayment plan. Doing so may reduce your monthly bill to a percentage of your income. You’ll pay more over time in interest, but switching repayment plans can put more breathing room in your budget.
Repaying trade school student loans
Going to a vocational school can lead to a prosperous career. You may be able to hang on to even more of your earnings by either refinancing or choosing another method of saving money on trade school student loans.
Elizabeth Aldrich contributed to this report.
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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.
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Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
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*UNDERGRADUATE LOANS: Fixed rates from 4.73% to 11.46% annual percentage rate (“APR”) (with autopay), variable rates from 1.30% to 10.00% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.51% to 11.76% APR (with autopay), variable rates from 1.08% to 10.30% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.41% to 11.67% APR (with autopay), variable rates from 0.98% to 10.21% APR (with autopay). PARENT LOANS: Fixed rates from 4.73% to 11.46% APR (with autopay), variable rates from 1.30% to 9.88% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 6/29/20. Enrolling in autopay is not required to receive a loan from . Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).
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Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
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