How To Refinance Student Loans

Hi, welcome back to the channel on the college process. Once again, I'm Ed from Principia Prep and today we're going to be going over why now is the right time to refinance your student loans. Now before we begin, if you are new to the channel and are looking for additional college content, please hit the subscription button down below. It will notify you when new videos do come out, as well as if you have any comments or questions today throughout the video, just leave them in the comment section down below. We do answer all the questions you guys leave down below in the comment section. If you are looking for scholarship assistance, once again, we are running the James Russell Memorial Scholarship. To be eligible for James Russell Scholarship, very simple, in the description down below is the video link. You can just watch that video and explain to you guys how to apply. We also have in the description down below, we also have the organization's demo, as well as our buy us a coffee. If you want to help the channel out, allowing us to keep making these videos for you guys out there on the college process. And all that being said, let's jump right into today's video. Why now is the right time to refinance your student loan? Of course, federal loans now having gone into repayment again, as well as many students having variable rates on some of their private loans. It's really now time to start looking to refinance, especially if you've graduated. The refi lender rates right now are very low compared to what you probably have in place right now. So you want to try to lock in those rates now while they're still low. And what I'm going to do in today's video is I'm going to show you guys six different loan companies, six different refi companies to consider for your refinancing, as well as the ones we like the best and ones that you may already know of. We're basically going to go through the whole gambit of what they require, what you need to do, so on and so forth. And right at the back, before I jump into those six, let me just start off by telling you guys what you need to have in place before any lender, by the way, will allow you to do a refi. Right off the bat, these key items must be addressed before you guys are able to do a refi. Right off the bat, your student has to have graduated college. Now, if they graduated their undergrad and going to grad school, you can still technically refi with a lot of these companies. But most of them want to see the students completely done. But if you've already done the undergrad portion of your education path here, you guys can start looking to refi. Second thing I look for from the student side is they want the student to have a job. Now, of the six companies we're going to talk about, they range in what they want as far as an income. Some places will start at $25,000 minimum for the year of income necessary to do a refi. Other ones will need $50,000, in some cases $60,000. I'll go over that in a moment. But right off the bat, the second key you have to get out of the way, the student has to have a job. In addition to that, the student also has to have a credit score. Most of the lenders, good, bad, or indifferent, are looking for credit scores around that $550,000 to $650,000 credit score, somewhere in that range. You don't have to have perfect scores, but you have to have technically at least above a $550,000 score for many of these people to be able to allow you to do a refi. Now, another thing to consider is if you guys don't have a credit score as far as a student is concerned, the students can use a cosigner. If the cosigner, i.e. the parent in most cases, has a credit score above a $650,000, they will in many cases provide you that refinancing opportunity to be able to lower down your rates. In addition to that, many of these lenders, pretty much all the lenders now, it's a new thing they're doing now, they will allow you to take your Parent PLUS loans, so the loans you have in the parent's name only, from the federal government and refinance them into the student's name and the private lender's side. If you want to take the parent's name off the loan and put it into the student's name only, refinancing your Parent PLUS loan might be something you might want to consider. So all that being said, going over these items that need to be addressed before you guys can refinance, let's talk about the lenders out there, who are the best, what they offer, what they're looking for, so on and so forth. And I'm going to break this into two different groups of three companies. Now, the first three companies I'm going to talk about are companies you guys all heard of right here, they're basically name brand companies. And then the second group of companies, the other three are these guys right here, a little lesser known companies as far as a refi side goes, the more well known names, these guys right here are actually showing from what we're seeing between the clients that we're helping out, as well as what clients are telling us, the more well known names are actually showing higher interest rate refinances than the lesser known guys here. So let's start off with the first three here. So SoFi, Citizens Bank and CollegeAb. Now when it comes to these three guys, right at the top, they are going to look for more stringent information from you guys, such as CollegeAb and SoFi, they're going to want you guys to have at least an income coming in for the student of roughly around 50 to 55,000 between them respectively. So if students making under 55,000 right at the back, I wouldn't even apply, unfortunately, these guys are both going to deny you guys right at the back, because you're not making enough income from them to qualify you for the refis. Now the third choice here is Citizens Bank, one of the top three here, one of the big guys here. Citizens Bank only requires you guys to have an income of roughly around 24,000 or higher. So if you're looking at using one of the bigger guys here, if you have an income of over 24,000, I would like to probably go more likely with Citizens Bank, because the reality that they require a lesser amount of income coming in from the student. Now all three of the big guys here are going to want, whether you're making the 24,000 or over the 55,000, they are going to require you guys at least to have two pay stubs available for them to be sent in to them to verify your income. So it's not one of these things where you guys can just say, I make $100,000, I make $200,000 to try to see if the loan will come through and they'll get you a good refi. It's not going to be the way it works, unfortunately. For these guys, it's a lot more stringent to refi than it is to apply just for a regular student loan. They are going to want to see documentation, where for the regular student loans, they don't ask for this stuff. For the refis, they are going to ask for this stuff. So if you're not making the $55,000 income or higher for SoFi or College Ave, it's not going to make sense for you guys to apply here. Now all three of these guys are typically going to want from you guys at least a credit score on the student side of at least 625, if not higher. So if you don't have, for SoFi or for College Ave, a $55,000 income and at least a 625 credit score, it's probably not going to work out for these guys. In addition to that, these guys will, when they do do a pull on your credit, as far as they pull your credit in to see if you're eligible for the refi, by the way, all the lenders, these three guys here, as well as the next three I'll be talking about, all do a soft pull. So it doesn't actually affect your credit score. It's not going to be like a hard pull. When they do the soft pull, they'll give you an idea of what the rates will be for you guys. Then you're going to like to go through with a hard pull later on that will affect your credit. So you guys can do as many soft pulls from either these three guys or from the other three companies I'll be talking about in a moment. So just to kind of see who's giving you the best rates. And for all three of them, their interest rates are starting off 4.5% on the low end all the way up until around 7% on the fixed side. I would not be doing variable rates on any refinancing right now. I don't want to lock in the rates. So now when it comes to the big three here as well, what you're also going to realize is these guys do have a limitation to allow the amount to allow you to refinance. For most undergrad degrees, these three big guys here will only cap, will cap you guys out basically around $150,000 undergrad debt. So if you have over $150,000 of undergraduate debt, these guys here unfortunately will not let you refi the entire amount. So just things to think about. Now let's talk about the second group here. The second group being these guys right here, the lesser known companies on the refi side. These guys are the Credible, Earnest, and Splash Financial. Now when it comes to these guys right at the back, they have a lower starting point as far as the income requirements. These guys right here are starting off between $30,000 to $40,000 of the student needed having as far as income to be considered for a refi. Also these guys right here are starting off a little bit lower on the interest rate side. For these guys, the interest rates are starting at just under 4%. And what's making these guys more appealable as well is the credit score required by these guys starts at roughly around 550 to 600. So we're starting up a lower credit score requirement than the big guys. So when it comes to Credible, Earnest, and Splash Financial, the fact that we have opportunities for lower income as well as lower credit score does obviously provide a little bit more consideration to think about when you're looking to do a refi. In addition, we've also realized that these smaller lesser known names will allow you to refi up to half a million dollars. So they don't have the kind of caps of the 150 that big guys do. So in addition to all that as well, if you are looking for refinancing, if you guys want to help us out here, we do have a link. We do have an affiliation with Earnest as well as Splash Financial, both in the description down below. If you want to shop around, if you could use our link here down below in description, it would help out the organization. That being said, in closing, the way I would go about right now looking to refinance, I would consider doing a couple of things. I would basically take two or three of these guys, one of the big guys, maybe two of the small guys or two of the big guys or two of the small guys and basically do all of them and see who's giving me the best rates because all of them are doing a soft pull. So which one of you guys can give me the best, the lowest fixed rate? Now the benefit for all these guys is they all offer five, 10, 15 and 20 year programs. So it even provides you with more opportunities to figure out, do you want a longer term loan or a smaller term loan? Of course, that's more based on preference for you guys based on your financial situation. Now with all that being said, I hope you guys enjoyed today's video. If you do like the content here, please leave us a like, please leave us a comment down below and consider subscribing. And other than that, thank you for watching today's video. Once again, my name is Ed from Principia Prep. On the screen is my contact information. If you need more help or more assistance in the process, I do help out families with the admissions and financial aid process. If you need help, on the screen is my contact information. Just text me because text is actually the fastest way to reach me. If you email me, the second fastest way to reach me. If you call, typically there's anywhere from a week to two week delay for me to get back to you. But text message, once again, fastest and easiest way to get ahold of me if you need an appointment or need help in the process. Other than that, thank you for watching today's video. Once again, my name is Ed from Principia Prep.