Graduate Student Loan Refinance
Everyone wants to pay off their graduate student loans as effectively as possible while saving as much money as possible. Especially if you are cash-strapped or trapped in a loan that offers no flexibility, high rates, and high monthly repayments.
Graduate student loan refinancing is one way you can pay off your loan effectively. It is a great solution for many students out there. Below we take a look at what graduate student loan refinancing is and what benefits it could have for you.
What is Graduate Student Loan Refinancing?
With graduate student loan refinancing, you take out a brand new loan from a private lender to pay off your existing student debt (whether private or federal). Your new loan will either have a better interest rate or better payment terms than your old ones.
If you get a lower interest rate, you will have lower monthly repayments and also save money in the long run by paying back less. You could also choose to pay back your loan faster by increasing your monthly payments and changing your payment terms with the new loan.
If you have multiple student loans, you can consolidate those loans into one loan to make your repayment simpler. Or, you might just want to change to a better lender who can offer you better customer service.
There are many advantages to graduate student loan refinancing. Let’s take a closer look at a few of them.
Advantages of Graduate Refinancing
Lower Monthly Payments
If you are cash-strapped and making your monthly loan payments is killing your budget, you can refinance in order to lower your monthly payments. This will make paying back your loan a lot easier each month. Keep in mind, however, if you lower your monthly repayments without having a lower interest rate, you will be paying back your loan over a longer period of time.
This means, in the long run, you’ll be paying back more interest. So make sure you weigh up the cost and benefit of lower monthly payments.
Lower Monthly Interest
In most cases with student loan refinance for graduate school, your credit score has increased while you have been paying off your student loans faithfully. Or, you now have a steady income after you graduated.
This means you will most probably be able to get a better interest rate on a new loan than your existing student loans. This is great news as it not only means you’ll be required to pay less each month, but you will be saving money in the long run. A lower interest rate results in less interest over the term of your loan.
Most of the time students aren’t able to qualify for student loans on their own due to a lack of credit score or lack of income. This means they have to sign with a cosigner who is liable for the loan in case you default in paying. If you take out a new loan for graduate student loan refinancing and you are able to qualify on your own, you might not have to sign with your cosigner again. In such a case, your cosigner can be released.
Choice of Variable or Fixed Rate
Unlike federal loans, private lenders often offer you a choice between fixed and variable interest rates. This means you can choose the one you feel most comfortable with. The advantage of choosing a variable interest rate is it starts at a lower rate than the fixed rate, but the rate can change over time. So you might end up at a higher rate than the fixed rate. The fixed rate will stay fixed over the lifetime of the loan.
Why It’s Hard for International Students to Refinance Graduate Loans
International students can find it difficult to get a lender willing to refinance their student loans. This is because student loans don’t usually come in small amounts, and it then takes a few years to pay them off.
In most cases, international students don’t get visas long enough to cover the period of the loan repayment. For lenders, this is a risky business as you could be required to leave the country before your loan is repaid. Then they’d have no way of getting their money back.
If you do find a lender willing to refinance even if you are an international student, you will probably get a higher interest rate than U.S. citizens or permanent residents. You might also have to sign with a local cosigner who can stand in for the loan if you leave the country.
This can be super frustrating, but there is good news. There are lenders like Stilt who focuses on providing loans to visa holders and immigrants. So you won’t face half the hurdles with them as you do with other lenders!
Refinancing Your Graduate Student Loans with Stilt
Stilt is an online private lender who offers loans specifically to visa holders and immigrants. You can also be a U.S. citizen or permanent resident to apply, but this is a bonus lender for those who are not! Getting a loan with Stilt is super easy.
You can apply for your loan online. Once you’ve applied, Stilt will send you an update on your application within 24 hours. If they need more info, they’ll schedule a phone call with you.
Stilt’s eligibility criteria looks quite different from other traditional lenders. Instead of looking at your credit score, they look at whether you have a bank account in the U.S. and whether you are physically present here. For full details on what Stilt requires, take a look at this page.
Your information and documents will be verified by their internal teams and as soon as they’ve ticked all the right boxes, you’ll receive a promissory note to sign. As soon as you’ve signed, the money will be released and available for use.
3 Signs You Should Refinance Your Graduate Student Loans
There are three sure signs telling you it is time for you to refinance your student loans.
1. Your Interest Rate is Too High
If you took out a loan as a student, the chances are pretty high this is true for you. If you’ve graduated, found a job and have been paying off your loans faithfully each month, there is a really good chance you could get a better interest rate than what you are paying now. So do some research and see what rate new lenders can offer you.
2. You have Expensive Loans
You might be paying tons of fees with your loan that is simply unnecessary. Or, again your interest rate is too high. This can result in high monthly payments that are difficult to manage. You don’t need to be cash-strapped for a longer time period than necessary.
With student loan refinance for graduate school, you can get a loan with lower monthly repayments that will take a lot of financial stress off your shoulders.
3. Your Loan Plan is Too Inflexible
We all enjoy some form of flexibility. Some lenders are super rigid in their payment terms and payment dates. There are even prepayment AND late payment penalties with most. It feel like you almost can’t win when you’re trying to do your part! If you need more flexibility, you should also consider refinancing with a new lender who can offer you the flexibility you need.
As you can see, there are a lot of perks to graduate student loan refinancing. Even if you are an international student! With lenders like Stilt, you can get the same advantages as U.S. citizens and permanent residents. So, take the first step and go get better rates and loan terms by refinancing today!