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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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|* 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.
1 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
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 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 11/4/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
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.
4 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).
5 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). 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.
* Application times vary depending on the applicant’s ability to supply the necessary information for submission.
5 Important Disclosures for Citizens.
Undergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As March 1, 2020, the one-month LIBOR rate is 1.62%. Variable interest rates range from 2.72% – 10.98% (2.72% – 10.83% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.72% – 12.19% (4.72% – 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens One is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensone.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
Citizens One Student Loan Eligibility: Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers who have not attained the age of majority in their state of residence, a co-signer is required. Citizens One reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens One Student Loans private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens One Student Loans-participating school.
Please Note: International Students are not eligible for the multi-year approval feature.
Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
|2.75% – 10.65%*,1||Undergraduate and Graduate|
|2.84% – 10.97%2||Undergraduate, Graduate, and Parents|
|2.80% – 11.37%3||Undergraduate and Graduate|
|3.52% – 9.50%4||Undergraduate and Graduate|
|3.14% – 11.88%5||Undergraduate and Graduate|
|2.72% – 10.98%6||Undergraduate and Graduate|