Question 1

Why should I refinance my student loans?

Accepted Answer

Refinancing your student loans can save you a lot of money over the life of the loan, as well as provide other benefits to support your financial goals. Here are a few of the major advantages.

Lower interest rates

Many students have little to no credit history when they originate their loans, forcing them to take out loans with high interest rates. But if your credit score, income, and other financial markers improve, you could qualify for a lower interest rate. (Note that with most lenders, you’ll need a good-to-excellent credit score to qualify for refinancing.)

Reduced monthly payments

Student loan refinancing allows you to choose an entirely new repayment plan. If you choose a longer repayment term, you’ll likely get a lower, more affordable monthly payment, which can keep you from defaulting on your loans and doing serious damage to your credit.

However, lengthening your repayment term should only be used as a last resort. That’s because a longer loan term will ultimately result in more interest paid over the life of the loan. If it’s not absolutely necessary to lower your monthly payments, try to avoid it, as it can save you a significant amount of money over the life of the loan.

Cosigner release

If you had a cosigner when you initially took out your loan, refinancing can allow you to release that person from their obligation. (Note that some lenders allow you to use a cosigner to refinance, but NaviRefi does not offer this option.)

One easy payment

Because student loan refinancing combines all your old loans into a single new loan, it can vastly simplify your monthly payment. Post-refi, you’ll have just the single loan and single loan servicer to worry about.

Question 2

Do I need a good credit score to refinance my loans?

Accepted Answer

The short answer is yes, you do need a good credit score to refinance your loans. That’s because your credit score typically gives lenders a clear picture of your financial health, including any credit card debt, student debt, car payments, or past delinquencies.

That said, different lenders have different approaches when it comes to analyzing a borrower’s credit history. You can also improve your credit score over time, so if it’s not in the good-to-excellent range now, you may be able to work on it over the next few years and apply for refinancing then.

Your credit score is calculated using the information on your credit report. Your credit report is your borrowing history and is maintained by a consumer reporting agency. Information is reported by your existing and previous lenders and may report other debt as well. Negative credit information such as delinquency will stay on your credit report for up to seven years and bankruptcy data will stay for up to ten years. Lenders will most likely view your credit report but use your credit score to make a decision. You can review your credit report annually on annualcreditreport.com for free.

NaviRefi requires a credit score of 680 or higher for most borrowers. If you attended a not-for-profit institution more than six years ago and did not graduate, you must have a slightly higher credit score — at least 700.

Question 3

Will refinancing help me get lower monthly payments?

Accepted Answer

Yes, refinancing can lower your monthly payment. That can happen through a few different avenues:

Getting a lower interest rate: If you qualify for a lower interest rate in your refinancing offer, your monthly payment will automatically decrease. If you’ve improved your credit score and income since originating your student loans, you will likely receive a lower rate.
Extending your repayment period: Paying smaller monthly installments on your loan over a longer period of time is another way to lower your monthly payment. Disclaimer: While this will free up room in your monthly budget, it will cause you to pay more in interest over the life of the loan.
Qualifying for the rate reduction program: NaviRefi offers several different repayment options, including the Rate Reduction Program for qualifying borrowers. If you’re experiencing financial hardship but can still afford to pay a reduced amount on your loan, you may qualify. This program offers a reduced interest rate for a six-month period, which means your monthly payment amount will be lower during this period.

Question 4

How do I refinance my student loans?

Accepted Answer

You can refinance your student loans through a variety of different lenders, including banks, credit unions, and online lenders. The first step to finding the right lender is shopping around. Here are some things to consider.

Interest rates: Some lenders may allow you to check rates without triggering a hard credit pull. A hard credit pull will lower your credit score by a few points, since credit bureaus interpret this as looking into a new line of credit. To spare you from impacting your credit score, NaviRefi offers you a range of rates before you apply. If you then complete the application process, you’ll be given your final rate.
Repayment options and fees: Some lenders may offer more flexible repayment options, while others may offer better terms for borrowers with larger balances. Some lenders require fees, while others offer autopay discounts and other incentives. NaviRefi offers an autopay discount and charges no origination fees, late payment fees, or prepayment penalties.
Credit score and other requirements: While most lenders require a minimum credit score in the mid to high 600s, you should always verify each lender’s various criteria before you apply for refinancing. Other requirements may include income, debt-to-income ratio, state of residence, and school.

Once you’ve decided which lender to refinance your student loans with, gather the necessary documentation. You’ll usually need an ID, your social security number, and a recent payment stub to complete your loan application. Then the lender will begin the underwriting, or assessment, process.

If you decided to refinance your student loans with NaviRefi, you may have received an invitation code in the mail or an email. You can use this code to start your application. If you did not receive or can’t find your code, you can click the “Check your rate” button on the homepage and follow the prompts. Be sure to read all disclosures before you submit your application.

If you need assistance you can call our team at 844-381-6621 (Monday through Thursday 8 a.m. to 9 p.m. ET and Friday 8 a.m. to 8 p.m. ET). A team member will be happy to assist you with your application and any questions you may have.