Student Loan Refinance FAQs: What You Should Know Before Applying
What does it mean to refinance student loans?
Refinancing student loans is meant to ease the burden and stress of paying back a single loan or multiple loans. When someone refinances their student loan(s), they are obtaining a new loan that pays off and replaces one or more student loans and that has terms that work better for their current financial situation, payment preferences and financial goals. By refinancing through Splash Financial, you may qualify for a lower interest rate or lower monthly payment on your student loans.
Should I refinance my student loans?
Refinancing student loans is a great opportunity to reduce your student debt. However, it’s not for everyone.
Refinancing can be a great option for you if you either have a private student loan or if you are in the workforce, have graduated with an associate degree or higher in an eligible field, and have high-interest rates on current outstanding student loans. You may save thousands and potentially shave years off your loan term, helping you get out of student loan debt faster.
Although there are many benefits to refinancing your loans, it may not be for everyone. There are specific benefits of a federal student loan that a private refinance/consolidation loan may not offer:
- Loan forgiveness: If you qualify for student loan forgiveness and you refinance to a private student loan, your refinanced loan will no longer be eligible. Federal student loan forgiveness programs, such as Public Student Loan Forgiveness (PSLF), are only applicable on federal loans.
- Deferment: Refinancing can restrict the options you have to postpone your payments in the event that you lose your job or fall into considered financial hardship. Private lenders’ deferment policies vary.
- Income-Driven Repayment Plans (IDR): Federal loan holders can apply for an IDR plan that reduces their minimum monthly payment and makes it a percentage of their discretionary income. When you refinance, you will be ineligible for any IDR plan.
- COVID-19: Temporary interest rate of 0% and pause on payments through August 31, 2022 for public service loan forgiveness, economic hardship programs, fee waivers and rebates on the principal.
When is the best time to refinance my student loans?
Deciding if now is the best time to refinance your student loans depends on a number of personal factors including your personal financial situation, your current interest rate and monthly payment, trends in the economy, and the remaining balance on your student loan.
Many of our lending partners are offering lower interest rates as a result of the financial burdens placed on millions of Americans during the COVID-19 pandemic.
Can I refinance private student loans?
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.
Can I refinance federal student loans?
Yes! With Splash, you can refinance federal, private, and Parent PLUS student loans.
How do I refinance federal student loans?
If you’re interested in refinancing your federal student loans, the first step is to check your rate with Splash! This will give you an understanding of the new interest rates and monthly payment options available to you by refinancing through our network of banks, credit unions and other lenders. Plus, checking your rate with Splash does not impact your credit score. If refinancing makes sense for your situation, you can complete the rest of your online application and start saving.
How do I refinance student loans?
Many private lenders offer the ability to refinance your student loans. This will allow you to transition from your old, high-interest rate loan(s) to one new loan with a lower interest rate. Our network of trusted banks, credit unions and other lenders allows you to have access to the best possible rates and monthly payment options for your situation.
Simply click Get My Rate – it’s free, only takes a couple minutes and doesn’t impact your credit score!
How often can I refinance student loans?
You can refinance your student loans as often as you’d like! We recommend refinancing if your credit improves significantly or if interest rates go down. These are signs that you could receive a loan with lower interest rates, which could help you save thousands on your student loans.
Is it bad to refinance student loans multiple times?
Just because you can refinance your student loans multiple times does not mean you should. Refinancing multiple times within a short period of time could have a negative impact on your credit score.
Where do I refinance student loans?
At Splash Financial, of course! Our mission is to help people save money on their student loans. When you refinance with us, you gain access to the best lenders, rates, and customer support. Our seamless online experience takes the hassle out of refinancing. With no application fees, no origination fees, and no prepayment penalties – refinancing with Splash is a no-brainer! Learn how we can help refinance your student loans today.
Are student loan refinance rates going down?
In 2020, student loan refinancing rates reached a new low. However, rates are always changing. Checking your rate through our quick, online rate check is the best way to tell whether or not you are eligible for a lower rate.
Can I refinance my student loans if I already have a degree?
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.
Can I refinance student loans without a degree?
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.
What happens if I default on my student loan?
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.
What happens if I have an economic hardship and miss a payment?
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.