Refinancing with Earnest
Refinancing rates from 2.41% APR. Checking your rates won’t affect your credit score.
Attending college in Puerto Rico can mean living within walking distance of beautiful beaches, chowing down on scrumptious arroz con dulce (rice pudding) and getting a solid bilingual education. But, for many students, it can also mean taking out Puerto Rico student loans. In fact, at the University of Puerto Rico, students who take out loans to cover school costs borrow an average of $3,460 just for their freshman year alone.
The good news is, you have a number of options to get student loans in Puerto Rico that have affordable interest rates and favorable terms. You also have opportunities to refinance your Puerto Rico student loans after graduation to save money or even just to make your monthly payments more affordable. Read on to find out your options.
How to get Puerto Rico student loans
When looking for student loans in Puerto Rico, your options are mainly limited to the federal government or private lenders, as Puerto Rico doesn’t have some of the specific local programs found in many U.S. states.
As you consider your choices, note that private student loans do not have the same borrower protections as federal ones, so you should exhaust government loans first before getting private student loans to cover additional costs.
Federal student loans
For students in Puerto Rico, the direct loan program run by the federal government is the best place to secure financing for your education.
When you apply to take out direct loans, your credit score doesn’t matter, and you don’t need proof of income. You also don’t need to shop around among different lenders because the interest rate and origination fee for direct loans are set by the government. And fortunately, interest is typically lower than for private loan rates.
There are two types of direct loans: subsidized and unsubsidized loans. Only undergraduates with financial need can qualify for subsidized loans, and the government pays interest on these loans while students are in school and during a six-month grace period afterward. On the other hand, both undergraduates and graduate or professional students can get unsubsidized loans, which aren’t need-based and do not come with subsidized interest while in school.
Graduate students and parents can also take out PLUS loans, though interest rates for these are a little higher, so it’s important to compare options carefully in case a private student loan might offer a better deal.
Federal loans have many important borrower protections not available with private lenders. These include income-based repayment plans that cap monthly payments based on income, as well as Public Service Loan Forgiveness (PSLF) to allow qualifying workers to have their loan balances forgiven after 120 on-time payments.
Puerto Rico does not offer its own separate in-state loan program, but the Department of Education announced recently that it was working with the Puerto Rico Department of Education to create a student-centered funding system under the Every Student Succeeds Act.
To become eligible for federal student loans while going to school in Puerto Rico, students need to complete their Free Application for Federal Student Aid (FAFSA). Here’s an overview of federal student loan options and terms.
|Federal student loan||Who can use it?||Interest rate (2018-19)||One-time loan fee||Interest paid for you during deferment||Annual loan limit|
|Subsidized||Undergraduate students with a demonstrated financial need||5.05%||1.062%||Yes||Up to $5,500 per school year|
|Unsubsidized||Undergraduate students||5.05%||1.062%||No||Up to $7,500 per school year for dependent students
Up to $12,500 per school year for independent students
|Unsubsidized (for graduate students)||Students working toward a graduate or professional degree||6.60%||1.062%||No||Up to $20,500 per school year|
|PLUS||Graduate students and parents of undergraduate students||7.60%||4.248%||No||Cost of attendance, after all other student aid is applied|
|All information current as of Oct. 4, 2018. Source: Federal Student Aid|
Private student loans
After exhausting federal funding, students who still need to borrow funds may turn to private student loans provided by banks, credit unions and online lenders. Some good options to obtain private student loans in Puerto Rico include:
- College Ave
- Currently offers APRs ranging from 3.96% to 12.94%
- Extends parent loans as well as loans for students
- Ascent Student Loans
- APRs available currently run from 4.23% to 14.16%
- Offers 1% cashback graduation award
- APRs here currently go from 4.40% to 9.37%
- Allows you to release your cosigner
There are no standard interest rates or terms with private lenders, unlike with federal student loans. This makes it important to comparison shop among different lenders to find the right private student loans for your situation.
Students will need good credit and proof of income to get private student loans, which makes qualifying difficult for many young people. In this case, finding a cosigner to accept shared legal responsibility for the loans could be necessary.
You’ll also need to pay attention to whether rates are fixed — which means they’ll stay the same the whole time you have the loan — or variable and can fluctuate with the market, meaning your payment could potentially rise. Federal loans, by comparison, are always fixed.
How to refinance Puerto Rico student loans
After graduation, you may decide to refinance your Puerto Rico student loans. This means taking a new loan and using the funds to repay your existing student debt.
Refinancing could potentially lower your interest rate, making monthly payments more affordable. You can also choose the term length of your new loan, giving yourself more time with smaller payments, or shortening it to get out of debt faster and save on interest.
Likewise, you also have the convenience of making several loans into a single loan, simplifying your monthly payments.
There are a number of different lenders offering refinance loans including:
- Has APRs ranging from 2.41% to 8.14%
- Offers unemployment protection
- Refinancing APRs run from 2.41% to 7.82%
- Has wide range of terms, from 5 to 20 years
- Offers APRs from 2.41% to 8.22%
- Like with SoFi, unemployment protection is available
Since there are variations in terms and interest rates from one refinance loan to another, it is also important to shop around among different lenders that refinance Puerto Rico student loans.
Note that you can refinance both federal and private student loans, but by refinancing federal student loans, you’ll lose access to key borrower protections, including both PSLF and income-based plans.
On the other hand, the federal government does have a direct consolidation loan you can use to turn all your (federal) loans into one, and even adjust the terms, though the interest rate will stay more or less the same.
Bottom line: Student loans in Puerto Rico
When you go to school in Puerto Rico, borrowing is just one option for paying for college. You should always exhaust scholarships and grants first so that you can borrow the minimum possible and keep your debt reasonable.
Once you’ve run through all your sources of free money, as well as work-study options and college savings, look for the most affordable loans possible. Here, you’ll usually want to opt for federal loans first so you can keep interest costs down and make repaying Puerto Rico student loans easier.
Note: Student Loan Hero has independently collected the above information related to student loan interest rates and terms, which is accurate as of October 2018. The financial institutions mentioned have neither provided nor reviewed the information shared in this article.
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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 Earnest.
Explanation of Rates “With Autopay” (APD)
In school deferred payment is not available in AL, AZ, CA, FL, MA, MD, MI, ND, NY, PA, and WA).
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 Discover.
5 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.
6 Important Disclosures for PNC.
Fixed Annual Percentage Rates (APRs): APRs range from 4.52% to 9.58% for a 5-year term. APRs range from 5.05% to 10.26% for a 10-year term. APRs range from 5.55% to 10.84% for a 15-year term. Fixed rates are based on the creditworthiness of the borrower and co-signer, if any. Loan Payment Example: The monthly payment per $10,000 borrowed at a fixed rate range of 5.05% APR to 10.26% APR for 10 years means you would make 120 payments which may range from $131.94 to $207.24. For the fixed rate loan, the monthly payment will remain fixed for the term of the loan. Payments may vary for other repayment term options.
Variable Annual Percentage Rates (APRs): APRs range from 4.90% to 9.92% for a 5-year term. APRs range from 5.38% to 10.57% for a 10-year term. APRs range from 5.85% to 11.11% for a 15-year term. Variable rates are based on the London Interbank Offered Rate (LIBOR) index plus a margin depending on the creditworthiness of the borrower and co-signer, if any. The LIBOR index, adjusted quarterly, is equal to the average of the one-month LIBOR rates as published in the “Money Rates” section of the Wall Street Journal on the first business day of each of the three (3) calendar months immediately preceding each quarterly adjustment date. The LIBOR index is currently 2.47%. If the index increases or decreases, your rate will increase or decrease accordingly. Loan Payment Example: The monthly payment per $10,000 borrowed at a variable rate range of 5.38% APR to 10.57% APR for 10 years means you would make 120 payments which may range from $135.93 to $212.65. For the variable rate loan, the monthly payment may increase or decrease if the interest rate increases or decreases. Payments may vary for other repayment term options.
APRs and loan payment examples are for the fully deferred repayment option for the Undergraduate & Graduate loan programs and include the 0.50% interest rate discount for automatic payments. The lowest APR is available to well qualified applicants. Your actual APR will be based on your credit qualifications, selection of fixed or variable rate option, loan program, repayment term, repayment option and whether you elect the automatic payment feature. Loan payment examples assume 30 days to first payment after the deferment period (45 months in school and 6 month grace period). Payments vary for other rates, repayment terms and repayment options.
In addition to Undergraduate and Graduate loans, PNC offers loans for Health & Medical Professions, Health Professions Residency and Bar Study. Rates may vary by loan program and are subject to change at any time. Visit pnconcampus.com for current rates, additional loan payment examples and more details about the Solution loan products.
Please note: PNC reserves the right to modify or discontinue the terms of these program at any time without notice. You are encouraged to explore all scholarship, grant and federal borrowing options before applying for a private loan. Private loans are subject to credit approval.
PNC is a registered service mark of The PNC Financial Services Group, Inc.
|3.98% – 11.35%*,1||Undergraduate and Graduate|
|3.99% – 11.44%2||Undergraduate and Graduate|
|3.96% – 11.98%3||Undergraduate, Graduate, and Parents|
|4.72% – 11.87%4||Undergraduate and Graduate|
|3.66% – 9.64%5||Undergraduate and Graduate|
|4.90% – 11.11%6||Undergraduate and Graduate|