26 Wtheral Road Owerri, Imo Nigeria.
26 Wtheral Road Owerri, Imo Nigeria.
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For people who have no major money stack that has been kept for their post-secondary education, paying for books, supplies and tuition would be quite difficult and so, most students opt for student loans.
However, in a few instances, students might not be able to pay back those loans on time or might like to reduce the interest rates on the loan and save money and so they might have to opt for it.
You are basically getting a loan with lesser interest to back a loan with higher interest.
Note that student refinancing loans are usually applied for to repay existing student loans and reduce interest rates(primarily to save money) as the students’ loans are paid for and new terms and policies are discussed.
For instance, a person that has an $80,000 student loan to pay with an interest rate of 8%, would have to pay $972.62 monthly for the next 10 years. If the person is able to secure a student loan refinancing and loan is given at an interest rate of 5%.
The monthly payment will be reduced to 848.52, thereby happily saving almost $15,000.
To avoid mistakes and regrets, every action to be taken has to be weighed properly before deciding( especially in financial matters).
If you would want to get a student to refinance a loan, you might want to consider the pros and cons first to determine if the loan would suit your requirements or aspirations.
After weighing the pros and cons of student loan refinancing and deciding to go ahead with it. These steps will put you through what you need to do for a successful application process.
Read: Personal Guarantor Loans
The first step to take when starting your student loan application is to find out the lenders that give out student loan refinance and their requirements.
There are various lenders that can offer you a student loan refinance and each of them has their requirements however most of them require:
Once you have been to find out the requirements Of each lender and you have been able to shortlist some, you can request their loan rates or visit each lender’s website to see which would be suitable for you.
Once you have successfully enquired about an estimated loan rates, the next step is to decide on your preferred lender.
By the time you go through each lender’s rates, policies, and repayment plan, you must have been able to decide the one with policies that would favor you.
Asides from that, among the loan rates evaluated, you should be able to pick the plan most convenient for you. To save more money, choose the shortest repayment period you can afford.
If you would like lower monthly payments so you can prioritize other expenditures, pick a longer repayment period.
Fixed interest rates are mainly the nicest choice for most borrowers. Variable rates may be lower at first, but they’re liable to change monthly or quarterly.
The next thing to do would be to prepare your documents and fill out the application form.
You’ll be required to upload documents, like your loan statements, proof of income and monthly housing cost (rent, mortgage, etc.), Personal information, including employment details and monthly housing payment papers, etc.
Note, you’ll have to consent to a hard credit check during this period.
In recent times, researches have shown that the number of loan payment defaulters has increased to up to 20% and this is quite unpleasant. Remember that one of the worst mistakes you can make is simply choosing to ignore your loan debt.
Once your loan payment is 90 days overdue, it is officially “delinquent”, it is is up to 270 days your loan is rendered ” in default”.
When next you would want to get a new loan from any source, you might not be able to, as a loan default drops your credit. A bad credit rating affects you in several ways, not just when you want to get another loan.
When applying for a job, a potential employer could decide to use credit scores to determine the trustworthiness and business acumen of the job applicants. Of course, not paying back your debt alongside bad credit would make you seem like a person who does not accept responsibilities or take responsibility for his actions.
Even your cell phone service provider, might not want to allow you access to the type of service contract you like. Bad credit affects you in many ways that you might not think it would.
An advantage of your student debt is that, if you keep paying promptly, you would get good credit scores.
There are several programs you could apply for that would ensure you do not enter any trouble being unable to pay your loan. Your loan issues can be remedied, however, it must be done before 270 days, that is, when your account will be rendered ” in default”.
Several federal programs are formulated to help, and they are available to all who have federal student loans, such as Stafford or Grad Plus loans.
Many federal loan forgiveness plans are available to apply for online. Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Revised Pay As You Earn (REPAYE) are programs that can help lessen loan payments to a reasonable degree based on your income and family size.
There are also several other means for loan forgiveness and reduction, especially for federal loans.
Any loan is to be taken in your name as the borrower, whether federal or private can be refinanced.
Typically, a cosigner is a person that consents to stand as your guarantor in case you are not able to pay your loan, he/she takes responsibility.
Most times, a cosigner is required when an individual either has a poor credit score, does not meet the minimum income requirements, has a high debt-to-income ratio, etc.
Once you have submitted the borrower’s application part, a link is sent to your cosigner’s mail to fill his part.
The best person to use as your cosigner should be a trusted parent, grandparent, guardian, friend, or any other adult who is creditworthy and willing to assume legal responsibility for the loan liabilities along with you.
A cosigner that would be picked by you should have good credits, a steady income, and a reliable character. Note, a cosigner is not necessary if you have a good standing credit.
The major requirement for a student refinance loan is A GOOD CREDIT SCORE. If you belong under the category of ” fair” or ” poor” credit scores, you would most likely need to find out student refinance loan sources that can give you a loan ( although you would most likely not get favorable terms).
You might also want to consider getting a cosigner as some lenders will prefer you bring along a cosigner.
Asides from assessing the pros and cons of student refinancing loan, you might want to ask yourself these 5 questions to determine if the student refinance loan is for you,