Refinance Bank of Baroda Student Loans in the U.S.
Managing student debt is always difficult, but dealing with an inefficient and predatory lender can make repaying your loans a nightmare. Many graduates end up paying a fortune in hidden fees and are stuck dealing with unresponsive customer service.
Refinancing is a simple way that you can escape a poor quality lender and obtain far better rates and terms, and a superior borrowing experience. This article explores Bank of Baroda student loans, and provides a guide on refinancing that will make repaying your loans much easier.
What is Student Loan Refinancing?
Students with existing student debt can refinance their debt with another lender. This involves taking out a new loan with the new lender, who then uses those funds to pay off your outstanding student debt with other lenders. The new loan will have different terms and a different interest rate than the previous loan, along with an adjusted repayment schedule.
Refinancing lets borrowers not only obtain a more favorable interest rate and save money but also qualify for terms and a repayment schedule more suited to their circumstances.
Why You Might Want to Refinance Your Bank of Baroda Student Loan
Lenders in India and America follow similar processes in disbursing loans, but they differ greatly in the way that they execute these processes. One of the major Indian student lenders is the Bank of Baroda, headquartered in Gujarat, India.
Borrowers with loans from Bank of Baroda can run into a whole host of problems, which can make refinancing worthwhile. See the following list for a few examples of the inefficiencies and exploitative practices of the Bank of Baroda.
4 Reasons the Bank of Baroda Probably Isn’t the Best Lender for You
Your Interest Gets Most of Your Payments
The biggest complaint among student borrowers is high interest rates. After graduation, most student borrowers can only afford to make monthly payments that see most of their hard earned money go toward paying down the accumulated interest. If this sounds like you, you deserve better.
Truly Lacking Customer Service
According to the reviews online, Bank of Baroda’s customer service might among the worst of Indian banks. Once customer went so far as to call the bank “one of the worst customer service[s] online.” That’s not what student borrowers want to hear about the bank they’ve entered into a potentially decades-long business relationship. Not only does it speak volumes about the professionalism of Bank of Baroda, but also of how it views it’s student borrowers.
You’re Likely Paying More with a Variable Interest Rate
Unfortunately for student borrowers, Indian banks don’t offer fixed interest rates on student loans–this includes Baroda. And with rates rising above that average more often than they fall below it, it means you’re making a smaller contribution toward your principal balance each month while the Baroda makes more money off of your loan.
Your Paying Extra for the Exchange Rate Each Month
Simply put, the exchange rate for sending your student loan payments to India while you’re in the U.S. is costing you more money. With the Indian rupee being a weaker currency than the American dollar, you end up paying the exchange rate every single time you make a payment to Bank of Baroda in India. The cost might not seem very much month-to-month, but over the course of a decades-long repayment period, those costs could run into the thousands of dollars.
3 Signs You Need to Refinance Your Student Loans
Many people can benefit from the improved terms of refinanced student loans. By refinancing, you can obtain a better interest rate and repayment schedule, along with a vastly improved customer experience. See below for a few signs that you may benefit from refinancing.
1. Your Repayment Terms Make Repayment Difficult
People with a more stable and substantial income may prefer a shorter repayment schedule and larger monthly payments. Other borrowers with lower earnings may want a longer repayment schedule for the smaller monthly payments, though this means greater overall interest payments. Of course, when you first took out student loans, you likely didn’t know what your financial situation would be.
Lenders purposely tailor the terms of a refinanced loan to your current needs, to improve their chances of recouping the loan. Refinancing can help you get a repayment schedule and terms that are much better suited to your current financial circumstances.
2. You’ve Improved Your Credit Score
The interest rate on your initial loan was largely determined by your credit score at the time. Thus, if your credit score has improved since then, you will qualify for a better interest rate.
3. You Need a Lower Interest Rate
High interest rates can force you to pay double or triple the principal loan amount over the course of a loan, along with higher monthly payments. If this cost is simply too great and you may qualify for a better rate, refinancing can help you obtain this rate.
Can You Refinance Bank of Baroda Student Loans in the U.S.?
International student loans can be refinanced by American lenders, including the Bank of Baroda. However, immigrants and noncitizens also frequently have great difficulty obtaining loans. Borrowers, then, must find a lender with eligibility criteria that they can meet, and this criteria often excludes immigrants.
Why It’s So Hard for Visa Holders to Refinance at American Banks?
Refinancing involves a lender reassessing your finances to give you different rates and terms than your previous loan. However, this typically involves scrutinizing metrics like credit history. Visa holders, by definition new to the country, lack a credit history in the United States and are frequently denied loans on that basis.
Lenders also see visa holders as riskier investments because of the temporary nature of visa status. If a visa holder has to leave the country when their status changes, the lender may be unable to recoup the loan. This leads to lenders penalizing visa holders in their loan applications.
What is Stilt?
Stilt is an online lender based in San Francisco, California, seeking to remedy this discrimination by targeting financial services at immigrants and noncitizens specifically. Rather than focusing on credit history, Stilt accounts for education, employment prospects, and other peripheral factors. This gives immigrants and noncitizens in the United States a much better chance at being eligible for loans.
How to Refinance Your Bank of Baroda Student Loan with Stilt
The process of refinancing with Stilt involves three simple steps, and you can get the funds transferred into your account within a couple of days of applying.
First, you fill out an application with important information on your educational and employment history, along with your finances. If your application meets the eligibility requirements for refinancing, Stilt will approve your application within 24 hours. Once your application is approved, you will see the interest rate that you qualify for, along with a range of loan amounts and term lengths.
All you have to do, then, is sign a promissory note with the details of your loans, and Stilt will place the funds into your account immediately.
5 Tips for Refinancing Student Loans
Refinancing is a valuable tool for reducing your debt burden, but there are other steps that you can take that will help you get better rates and terms when you do refinance. See the following list for a few ideas on how to get the most out of refinancing.
Tackle Your Other Debts First
The lender that you refinance with will judge your application partly based on the other debts that you currently hold. This helps lenders determine your overall financial health, and your ability to ultimately repay the loan. If you pay off your other debts before refinancing, then, the lender will deem you a lower-risk investment and offer better rates.
Find a Job or Be Employed
Employment means a steady income that can be projected into the future, something else that lenders value. By making sure that you have a job when you apply for refinancing, you can show the lender that you will have the funds on hand to repay the loan.
Make Sure You Understand Debt-to-Income Ratio
Debt-to-income ratio is the amount of recurring monthly debt that you hold in proportion to your monthly income. This metric reflects your overall fiscal solvency and spending habits. Calculate your debt-to-income ratio by adding up all your monthly bills, and then dividing the total by your gross monthly income. The lower the number, the stronger your financial profile.
Once you know your current debt-to-income ratio, you can work on bringing it down, which will help you qualify for refinancing.
Check Your Credit Score
All lenders will do a credit check upon receiving a loan application, and lenders often have a minimum credit score for eligibility. It’s important, then, that you know your credit score before applying, so you can match it against the minimum and see if you qualify. By checking your score consistently, you can work on lowering it and improving the refinancing rates that you qualify for.
Have Steady Income
As a general rule, the longer you’ve held your current position of employment, the more secure an investment lenders will consider you. A consistent income over a long period will go a long way towards demonstrating your fiscal responsibility to lenders.
There is no reason to labor under unfair, exploitative practices from predatory lenders. Refinancing can help you escape these circumstances and get terms that are suited to your needs and circumstances. With just a few simple steps, even immigrants and noncitizens can refinance for better rates.