You keep hearing about others who have taken the plunge and refinanced their student loans, and you’re mulling whether it’s the move for you. You’re starting to wonder whether there’s some sort of catch since everyone seems to be pleased with their decision. Alas, it is true: refi can save you money and streamline your payments, to boot. But this presupposes that you will qualify for a better rate, which you must, and likely will, since you’re employed, and your credit is good. That makes you less risky to lenders. Still, not every solution, no matter how great, fits every individual. Everything depends on one’s personal situation. In that light, here’s what you should know before refinancing student loans.
What Do You Want to Achieve?
We’ve already alluded to the benefits of a lower interest rate and a single monthly payment, which likely will be lower. But which of these are most important to you? It’s crucial to be certain about your goals.
What Will My Rates Be?
Put it this way: the better your credit, the better the rate. The service Juno tends to have the best student loan refinance interest rates, though. In any case, you can save a bundle if you can qualify for a lower rate. And your monthly payments will be lower.
How Much Must I Pay Off?
When you’re doing comparison shopping, pay attention to the loan payoff amount. This is how much you must cough up, including interest, to pay off your loans. This knowledge is key since these figures combined will be the balance of your new loan. Be certain you can handle your new payments.
How Do I Know What’s Manageable?
After you’ve determined your payoff totals, you want to choose the right student loan repayment period for you. Of course, a longer student learn term will net you lower monthly payments, which could be key if you have, for example, excessive living costs relative to your income. You can get out of debt faster with a shorter repayment term, which often comes with a lower rate.
How Much Credit Do I Need?
You’ll likely need to have a score of at least around the high 600s to qualify for the most favorable terms. What is refinancing? Eligibility’s the bottom line. So, make sure you know your score ahead of time. In any case, a service such as Juno can get you the best rates.
What Kind of Income Must I Have?
You’ll want to have steady, consistent income so that you can demonstrate that you can handle the monthly payments. Higher incomes are viewed more favorably by lenders. What’s also important, however, is your debt-to-income ratio. The lower the better.
What About a Cosigner?
Don’t throw in the towel if your credit score or income isn’t up to snuff. Many lenders will let you add a cosigner to your application, someone you trust, and who trusts you, who has the credit and salary to put you over the top. Be sure you’re able to handle the payments, though, because otherwise they’ll fall to your cosigner.
Now that you know what you should know before refinancing student loans, you’re able to make the best decision – for you. We know that refinancing has many advantages, so if you can find some way to swing it, you likely should. And again, if you decide to go the refi route, make sure you contact Juno first. It has the best rates around.