Frequently Asked Questions
Student Loan Refinancing
Yes! Splash offers refinancing options for college graduates with a four-year degree from a Title IV accredited institution or with an associate degree in an eligible field.
You can refinance private and federal student loans. If you have both private and federal student loans, you could consolidate them into a single loan. As noted with Splash’s student loan refinance, federal loans have specific protections that private student loans do not, so always understand exactly what you’re signing up for when you refinance.
Refinancing may help you secure a lower interest rate than your original loans and/or sign up for a new term length that is more aligned with your financial goals. You may be able to lower your monthly payment and/or save interest over the life of your loan. You may also be able to secure a fixed rate, if you currently have a variable rate on your student loan. Refinancing may help debt management, as consolidating multiple loans simplifies multiple payments into one single payment. Some private lenders also offer extra benefits, such as autopay discounts and prepayment benefits. However, this will depend on your loan terms and the way you choose to repay your student loan debt. These benefits will also vary between lenders.
If you decide student loan refinancing is not the best route for you, there are other options available, including:
- Deferment: A temporary freeze on making monthly student loan payments, during which time interest will not accrue on a subsidized loan. The federal government offers deferment for up to 3 years.
- Forbearance: A temporary pause on making student loan payments, though in this case interest would continue to accrue. The federal government typically offers forbearance for up to 1 year.
- Student Loan Forgiveness: If you have a federal student loan, you may be eligible for student loan forgiveness. There are currently no programs available for private student loan forgiveness.
The availability of deferment and forbearance for private student loans varies by private lender.
You may have heard the term “student loan consolidation.” This is another alternative to refinancing your student loans. And although many believe the two to be the same, they are different.
- Student Loan Refinancing: Offered by private lenders, refinancing is the issuance of a new loan with new repayment terms and a new interest rate to pay off multiple loans. Refinancing is available for both federal student loans and private student loans.
- Student Loan Consolidation: Primarily offered by the government for federal student loans, consolidation is the act of combining multiple federal student loans into one. The new loan will have an interest rate equal to the weighted average of your existing federal student loans.
Your credit score may decrease when the lender runs a credit inquiry to validate your credit worthiness. The resulting decrease in your credit score could rebound within a year.
And in fact, refinancing may help your credit. For example, if lower payments mean you are more consistent with your monthly payments, that may lead to a higher credit rating. Some lenders may even offer a discount for putting your monthly payments on autopay, allowing you never to miss a payment, improving your credit score, and saving you money.
Absolutely! Just as your financial standing may change (hopefully for the better!), interest rates in the market may also change.
In either case, you may want to consider refinancing your student loans to take advantage of the potential benefits of student loan refinancing that are available under improved conditions — in particular when it comes to getting a lower interest rate.
The downside? Private lenders will run a hard credit inquiry every time you apply to refinance your student loans, which could impact your credit score.
Although eligibility requirements vary by lender, typically to qualify for student loan refinancing, you must have the following:
- A low debt-to-income ratio (no more than 30%).
- A history of on-time payments.
- Good to excellent credit (preferably 700 or higher).
Other eligibility considerations may include a requirement that you have graduated, have a minimum income level, and/or are a US citizen or permanent resident.
The good news is that if you don’t currently qualify for student loan refinancing, you can re-apply again if your situation changes.
Typically, yes. Married couples, parents and people in other unique situations may be able to refinance their student loans into one loan. To discuss options with one of our representatives, give us a call at (800) 349-3938.
Our lenders each have their own minimum and maximum loan amounts. In general, the minimum loan amount is $5,000, and there is no maximum.
U.S. citizens are eligible to refinance their student loans through Splash as solo borrowers. Some lending partners also accept borrowers who are permanent residents.
Graduates with four-year degrees from Title IV accredited institutions, as well as professionals with an associate degree, are eligible to refinance. Parents are eligible to refinance two kinds of loans, as long as the child earned their degree: 1) educational loans taken out under their own name to finance their child’s education and 2) their child’s educational loans.
Splash offers refinancing options for college graduates with a four-year degree from a Title IV accredited institution or with an associate degree in an eligible field.
If you have a job loss or are going through an economic hardship, please get in touch with the lender or servicer of your loan as soon as possible to learn about your options.
Defaulting on a loan is a very serious matter which could have an adverse effect on your personal credit score. Further, it is difficult to cancel the obligation to repay an education loan in a bankruptcy. If you are about to miss a loan payment, contact your lender or loan servicer immediately to work out a repayment schedule.
Splash does not have lending partners that refinance student loans when a degree is not obtained. Splash lending partners require a minimum of an Associate’s degree.
Yes! Through Splash, you can refinance federal, private, and Parent PLUS student loans.
Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal student loans carry special benefits. If you refinance a federal student loan with Splash Financial, you will no longer be eligible for those benefits.
Yes! If your credit is good or has recently improved, or if interest rates have dropped, it will likely benefit you to refinance your loans.
Your monthly student loan payment will depend on a number of different factors, and it is entirely unique based on your financial situation. Below are a few factors that can impact your monthly payment:
- Total loan amount
- Interest rate
- Type of interest rate
- Loan term (how long it will take to repay your loan amount)
Because your student loan payment is often small compared to the overall loan amount, we recommend using a loan payment calculator to help you understand how decreasing or increasing your payment amount may affect what you pay over the life of your loan.
If you are eligible for student loan forgiveness, it releases you from the need to repay part or all of your federal loan, but it depends on very specific terms of forgiveness.