You can refinance private student loans and save a lot of money and moreover, if you have a student loan along with the health degree then, you can save even more. Refinancing your student loan enables you to consolidate the existing federal and private loans into a single loan with a revised interest rate. This also renders the lower monthly repayment.
As per the Doc Benjamin (an affiliate of Make lemonade), the new student loan and refinancing the student loans for pharmacists, dentists and veterinarians can help to save more as compared to the other students having loan debt. For dental, medical, pharmacy and veterinary schools, the saving amount is 260,000 USD, 180,000 USD 160,000 USD and 140,000 USD respectively.
To refinance private student loans, the lenders have an elaborated and strict criterion. By lending money to the borrowers, the private lenders risk their capital. That’s why; the private lenders lend money only to those, whom they consider faithful.
To avoid rejections for the approval of student loan, these points may be helpful and can also increase your chances of getting the loan.
- A credit score is the first thing your lender will be certainly looking at. You need to maintain a good credit score by having a history of on-time payments. In general, the top lenders can consider your student loan at lower credit score ranging from mid to high 600’s. You should aim to maintain your credit score around 700 or more, this will ensure your chance of getting the approval.
- The private lenders ensure that their borrowers should have sufficient income to make the repayment monthly. Lenders ask for the proof of stable income and, its source. They also check for the adequate amount of living, which will be left over after you have made the monthly student loan payments. In case, if you don’t have sufficient income, you can increase your chances of approval with co-signer, who has got a good credit profile.
- The other debts like credit card, mortgage, and auto debt, can affect the underwriting refinance private student loans. If you already have a debt obligation, the lender will certainly approve your monthly debt payment in the underwriting process. To avoid this, you can clear your debt obligation before going for the refinance of student loans.
- The lenders will also look at your debt to income ratio. It is the ratio of your monthly income to your monthly debt obligations. Like, if you earn 10,000 USD per month and your monthly debt is 3,000 USD, then your debt to income ratio will be 30%. To have a high chance of student loan approval, make sure that you have low debt to income ratio.
- The next thing lender will be looking for is your employment. You should have a job or written job offer to get your refinance student loan approved. Some private lenders will refinance your student loan during your school or residency and some will ask for your work experience.
Learn about student loan refinance companies.