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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.
On average, borrowers who refinance with Citizens Bank save $132 per month. You can get a quote for a refinancing loan with just a soft credit check, which does not affect your credit score.Get a quote from Citizens Bank
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 2018!
|1 Important Disclosures for CollegeAve.
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.
2 Important Disclosures for Discover.
3 Important Disclosures for Ascent.
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) or Turnstile Capital Management, LLC (TCM), which are not affiliated entities. Certain restrictions and limitations may apply. 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. All loan products may not be available in certain jurisdictions. Other terms and conditions apply. Ascent is a federally registered trademark of TCM and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
* 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.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 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.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 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.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.69% – 10.94%1||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|3.82% – 12.82%3||Undergraduate and Graduate||Visit Ascent|
|4.34% – 12.99%2||Undergraduate and Graduate||Visit Discover|
|4.12% – 10.98%*,4||Undergraduate and Graduate||Visit SallieMae|
|5.03% – 11.23%5||Undergraduate and Graduate||Visit PNC|
|3.88% – 12.88%6||Undergraduate and Graduate||Visit SunTrust|
|4.72% – 9.81%7||Undergraduate and Graduate||Visit LendKey|
|3.72% – 9.68%8||Undergraduate, Graduate, and Parents||Visit CommonBond|
|4.04% – 12.01%9||Undergraduate, Graduate, and Parents||Visit Citizens|