Refinancing with Earnest
Refinancing rates from 2.41% APR. Checking your rates won’t affect your credit score.
The United States is facing a massive shortage of skilled workers to fill trade positions. Last year, 56 percent of home builders reported a shortage of workers such as carpenters and electricians, according to the National Association of Home Builders.
Skilled workers can command high salaries and get a job quickly. In fact, Forbes reported that many mechanics, welders, and plumbers can find a new job in as little as 48 hours.
However, trade school can be expensive. The average program costs $33,000 to complete, found ValueColleges.com. If you don’t have the money to pay for school upfront, you’ll likely need to rely on student loans for vocational training. But high interest rates can add to your balance quickly.
If you want to save money on student loans, one option is to refinance your debt with a lower interest rate. However, 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.
Student loans for vocational training
Going to a vocational school can be a smart alternative to a traditional four-year school. Many trade workers can command top wages and secure a job faster than their friends with a bachelor’s degree. If a four-year school isn’t for you, you can get the training you need and start working much more quickly.
There are a few different ways to pay for trade school. While some people use personal loans or a credit card, many vocational schools are eligible for federal student loans. This type of debt often has lower interest rates and flexible repayment terms, making it a good option to fund your education.
If you aren’t eligible for federal loans, you might have to take out private student loans instead. Private loans can have interest rates as high as 12%. Over the length of your repayment, that interest rate could cost you thousands.
If you took out $33,000 in private 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.
Saving money on student loan repayment
If you have high-interest student loans, you aren’t stuck with them. By refinancing your student loans for technical college or vocational school, you can reduce the amount of interest you pay overall.
When you refinance your debt, you work with a private lender to take out a new loan for some or all of your current student loans. The new loan will have completely different terms than your old ones.
You might be able to extend your repayment period, reduce your monthly payment, or reduce your interest rate. If you’re a qualified borrower with excellent credit, you might be eligible for rates as low as 2.66%.
That lower interest rate can help you save thousands. If you refinanced your $33,000 student loans and got a new loan with a 2.66% interest rate, you’d pay back a total of just $37,620.
That would save you over $19,000 compared to a loan with an interest rate of 12%. That money could be used to pursue other goals, such as saving for retirement or buying a home.
To find out how much you could potentially save by refinancing, enter your current loan information and refinancing loan terms into our refinancing calculator below.
Student Loan Refinancing Calculator
Finding a lender to refinance student loans
Unfortunately, finding a lender who will refinance student loans for vocational training is tricky.
Most companies require you to complete an associate’s degree or bachelor’s degree program. A vocational school certificate program usually does not qualify.
One of the few lenders who will work with vocational school 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 with just a soft credit check, which does not affect your credit score.
Other student loan repayment options
If Citizens Bank doesn’t approve you for a refinancing loan, 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. Depending on your income and credit score, you could get a loan with an interest rate as low as 5.17%.
- Sign up for an income-driven repayment plan: If you’re struggling to keep up with federal student payments, consider signing up for an income-driven repayment plan. Doing so will extend your repayment term and reduce your monthly bill. You’ll pay more over time in interest, but switching repayment plans can give you more breathing room in your budget.
Repaying your student loans
Going to a vocational school rather than a four-year college can be a wise move. But if you’re trying to save money on your loans, refinancing can be a way to cut down on how much you spend in interest.
If you’re ready to refinance your loans, we can help you through the process for free.
Need a student loan?Here are our top student loan lenders of 2019!
|* 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.
** Discover's lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
1 Important Disclosures for Earnest.
2 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 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 a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. 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 7/1/2019. Variable interest rates may increase after consummation.
4 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.
5 Important Disclosures for Discover.
|3.99% – 11.44%1||Undergraduate and Graduate|
|3.98% – 11.35%*,2||Undergraduate and Graduate|
|3.96% – 11.98%3||Undergraduate, Graduate, and Parents|
|3.66% – 9.64%4||Undergraduate and Graduate|
|3.87% – 11.87%**,5||Undergraduate and Graduate|