Student Loan Consolidation
Congratulations, you made it through higher education! Now, you likely realize that your student loans are outrageous, overwhelming, and completely stressing you out. It’s ok. We’re here to help. It’s time to look into student loan consolidation, and student loan refinance options.
What is the difference between student loan consolidation and student loan refinancing?
To define it simply, student loan consolidation is combining all loans into one primary loan for ease of managing the accounts. In comparison, student loan refinancing takes out a new loan to replace multiple loans. Often refinancing is used to receive a lower interest rate.
The basics of student loan consolidation and student loan refinance.
With federal student loan consolidation, you’re combining federal loans into one loan with a single monthly payment. The disadvantage of federal student loan consolidation is that you may not combine private loans with federal loans. Consolidating personal, state, and federal loans is refinancing. To clarify, if you’re simply combining loans of the same type, you’re consolidating. If you are combining loans into a new loan, you’re refinancing.
Often people use student loan consolidation when they want to make handling the accounts easier. Private student loan consolidation, or refinancing, will achieve this goal. With federal consolidation, you may still end up managing more than one loan. An advantage to federal student loan consolidation may be to extend your repayment term up to 25 years. There isn’t necessarily a price advantage to federal student loan consolidation.
In comparison, student loan refinancing combines all existing student loans into one private student loan. The objective of student loan refinancing is to obtain a lower interest rate. As a bonus, you’ll also get a single monthly payment and one private lender to deal with directly regarding your loan. Money FCU has fixed-rates starting as low as 4.74% APR* with a .25% discount for using the automatic payment option. Money FCU offers a student loan repayment term of 5, 10, or 15 years.
*Rates include a 0.25% discount for optional enrollment in automatic electronic payments.
When should I consider student loan refinancing?
Consider refinancing when the new lender’s interest rate is lower than your current loans. You may also contemplate student loan refinancing when the new lender repayment options fit your lifestyle better than your current lender’s loan terms. Let Money FCU show you how refinancing with us saves you money.
If you’re still in school, or within 6 months after graduation, don’t refinance yet. Every lender gives you 6 months of no payments. This is called a deferral. Take advantage of this time to get a steady job or save up some money.
Your best repayment plan.
How to pay off student loans? The easiest way to pay off student loans is to choose a refinance loan option with a lower interest rate than your original student loan. How long does it take to pay off student loans? According to US News, the general time frame for student loans is a 10-year repayment plan. This deadline is often unrealistic, and research shows that a bachelor’s degree takes closer to 21 years to repay the debt. For this reason, it’s most important to pick a lender that provides the best loan payment options to eliminate your student loan debt.
BEST APR TIPS:
Your credit score determines your annual percentage rate. If you have poor or no credit, consider getting a creditworthy cosigner to lower your APR (Annual Percentage Rate). A cosigner release option is available to credit worthy borrowers who make 48 consecutive on-time payments during the principal and interest repayment period.
Another point to remember is that the shorter the loan term, the lower the interest rate. Always choose the shortest loan term you’re comfortable with. This will get you the best possible interest rate.
| CREDIT SCORE | 5 YEAR LOAN | 10 YEAR LOAN | 15 YEAR LOAN |
|---|---|---|---|
| 781 & Higher | 4.74% | 5.24% | 5.74% |
| 741-780 | 5.49% | 5.99% | 6.49% |
| 701-740 | 6.49% | 6.99% | 7.49% |
| 660-700 | 7.49% | 7.99% | 8.49% |
Student Loan Consolidation – Clear Rates. No Games.
How to refinance student loans? Take control of your student loan debt with fixed-rate refinancing. Refinancing student loans shouldn’t be a guessing game. We won’t show you a teaser rate that skyrockets after you apply. The Annual Percentage Rate (APR) you qualify for is fixed for the loan’s lifetime.
Rates shown include a 0.25% discount for optional enrollment in automatic electronic payments. All loans are subject to approval and restrictions may apply. Program, rates, terms, and conditions may change at any time without notice. Your interest rate is fixed and your rate and/or credit approval depends upon the credit qualifications of the student borrower or cosigner (if applicable). Rate is based on official FICO credit score obtained through the credit bureau.
Why consolidate or refinance student loans?
Main reasons to refinance student loans.
- Lower interest rate and save money
- Youâve since established a better credit score and stable income
- Option to pay off your student loans faster, without prepayment penalties
- Switch to a fixed interest rate for the life of the loan
- Combine all loans into one easy, monthly payment
- Convenience of one trusted local lender for all your loan questions
- Borrower incentives (such as 0.25% automatic payment options) save you money throughout the loan term
- Opportunity to choose loan terms and length with a payment youâre comfortable affording
What do I need to be eligible for student loan refinancing?
- Graduation from an eligible school
- Steady employment for the past 24 months (student or co-borrower)
- Gross income of at least $36,000/year or $3,000/month (student or co-borrower)
- No prior defaults on any education loans
- Meet a credit score of 660 or higher or have a creditworthy cosigner
- Be a U.S. citizen or a permanent resident
- Total loans being refinanced is less than $50,000
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I’m ready to speak to someone about student loan consolidation.
Great, let’s get you started! Apply student loan refinancing. Want to learn more about any of our services before applying? Call (315) 671-4000 or chat with our friendly agents. We are ready to answer any of your questions.
