Private Student Loan Debt
Private student loans are student loans provided by private lenders
such as banks and credit unions. Private loans tend to be less flexible than federal loans, offering fewer options for repayment. However, at the time you may have had different needs and abilities for paying off your debt. Also, many degree-seekers need to supplement federal loans with private loans just to cover their expenses. Absent deferment, cancellation, or forgiveness, you may find your best option for debt relief
What's Student Loan Refinancing?
Refinancing is when you basically renegotiate the terms of your student loan. If you’ve taken out multiple loans, you’d consolidate them into one new loan. Private lenders turn your loan(s) into one with a different rate and schedule.
You might choose to increase your loan term in order to lower your monthly payments. Your credit may be in better shape than when you were a young adult, qualifying you for lower interest rates.
A student loan refinancing marketplace is a platform for shopping your refi options. You can find student loan refinancing from many private lenders, but private student loan marketplace is a product offered with certain employee benefits packages. The service matches you with the right lender for your needs - rather than you seeking out a lender and trying to parse if you qualify.
While many private lenders offer refinancing, you can tackle your student loan debt with a dedicated marketplace approach. Some of the services offered are:
Customer support: finding the right lender can be as hard as finding the right school. When making your decision, leverage the knowledge of experts who have a wide view of the field. You get a different level of customer service from dedicated support specialists.
Matching & comparison: it’s easy to get all turned around trying to figure out which refi lender is right for you. With a financial wellness service you can get referrals to participating banks (including non-profit, local, and community) based on your unique debt scenario.
Eligibility: with a marketplace you can determine your eligibility for loans based on interest rate qualification. You don’t want to get far into the process and find out you don’t qualify, or have to wait long just to find out if you do. Student loan refinancing marketplace expedites this process because it’s centralized the info about participating banks. Plus, a marketplace may have a bigger appetite for underwriting risk than individual lenders.
Reasons to Refinance
Cosigner release: when you were a student, you likely needed someone to cosign your loan. One benefit of refinancing is you can drop your cosigner. Since your cosigner is often a parent or guardian, it can prove to be a wedge in your relationship. As you gain more independence it may be a welcome relief to both parties when you can release them from your loan.
Debt consolidation: between your household bills and recurring payments, you have many balls in the air to keep track of. If you’re managing multiple loans, refinancing is a chance to consolidate them. This simplifies at least one area of your busy life by getting you down to one monthly payment and one interest rate.
Lower rates: you already pay a lot for your education. Also, you can spend a lot on interest just trying to secure your degree. When you were first applying for a loan, you probably had a low or non-existent credit score. Now that you’ve had time to build credit, you may qualify for lower rates.
Lower payments: with private student loans, it can be hard-to-impossible to pursue any debt relief options such as income-based repayment (IBR), deferment, cancellation or forgiveness. When you refinance you can renegotiate the terms of your loan to extend the loan term, thus lowering your monthly payment. Private loan borrowers may find this their best option during times of financial hardship.
When You Don't Want to Refinance
As a student, many lenders give you a grace period
to delay repaying your loan as you find your footing. This can be essential to students who are just starting out in life and using the loan to find gainful employment. However, when you refinance, the clock starts on paying it back. Depending on your particular needs, this is one case in which refinancing may not be worth it. Whatever you choose, go forward with confidence: get your refi needs all in one place with student loan refinancing marketplace.