🎓 Scholarship Alerts 🔔

List of All Latest Scholarships You Can Apply For

Apply New Scholarship
Categories: Education Loan

Refinancing of Education Loan: All You Need to Know

Do you want to reduce the burden of the high-interest rate on your education loan? Is your education loan costing you a huge repayment amount in the long run? If your answer is yes, then refinancing of your education loan is certainly the right option for you. It is the process of taking up a new loan at a new and lowered rate of interest to pay off the existing loan. It can turn out to be a boon for all those students who are facing problems in paying off their existing study loan on time.

Being an entirely different phenomenon from consolidation, people often erroneously use both the terms parallelly. While a refinancing can help you in saving on interest rates, consolidation does not offer any kind of interest savings. Additionally, refinancing has a cutting edge over consolidation for the students who have borrowed a student loan from private organizations or those who have a combination of private and federal education loan.

Also read: How to manage your education loan?

Why prefer refinancing for Education Loan?

Whether you wish to get out of the debt faster or save money, in both the conditions, refinancing a student loan can turn out to be helpful in the following ways.

Lower monthly payments

With the help of refinance, the students get the flexibility of extending their repayment period and reduce the rate of interest on the new loan. This further reduces the amount of monthly payment as well.

Shortened loan term

If you are capable of making higher contributions that the existing repayment plan, you can shorten your loan term with the help of refinance, that too at lowered rate of interest.

Lower interest rate

You can also reduce the interest rate of your new loan on the basis of your respective financial situation and credit score.

Releasing a co-signer

A student loan refinancing can help students to release their co-signers from the burden of loan thereby improving their credit scores as well.

Also read: 6 factors to consider before taking an education loan

Important tips to consider for refinancing of Education Loan

Now what to do after you have decided to apply for an education loan refinance considering your existing financial situation? You need to take the following additional key factors into consideration as well.

Your credit score

The chances of your refinance application getting accepted depends majorly on your respective credit scores. A credit score of 700 or higher is considered as a good score to maximise the chances of approval.

Your employment

Getting an education loan refinances essentially requires you to have a permanent job. A written offer of a job could also work in specific situations. Most of the lenders give preference to students having a certain amount of work experience.

Your debt-to-income ratio

This is yet another criterion that helps the lenders in giving approval to the refinance applications. This ratio compared your total monthly income with your overall debt obligations within a month.

Having these facts intact in your mind, you can start looking up for the organizations that offer refinancing services. However, it is advisable to make sure that you do your Education Loan market research about the interest rates and other factors before applying.

Manmath Nayak

Recent Posts

  • E-Kalyan

E-Kalyan Status 2021 – Steps to Check Online Application Status

E-Kalyan status is one of the prominent features of the E-Kalyan scholarship portal that allows…

2 days ago
  • E-Kalyan
  • Scholarships

E-Kalyan Login 2021- Process, Reset Username and Password, Scholarship Renewal

E-Kalyan Login is a distinctive feature of the E-Kalyan portal that allows the users to…

5 days ago
  • Maharashtra
  • News
  • Scholarships

Maharashtra Scholarship Test 2021 for Class 5 & 8 Postponed Again; Schedule Withheld till Further Notice

New Delhi, 11 May 2021 - The Maharashtra Scholarship Test 2021 for Classes 5 and…

6 days ago
  • Scholarships

Oasis Scholarship 2021-22 – A Dedicated Scholarship Portal for West Bengal Students

Oasis scholarship portal is a one-stop online scholarship portal for all the scholarships that are…

1 week ago
  • Scholarships

Prime Minister’s Research Fellowship (PMRF) 2021 – Updated Eligibility & Selection

PMRF or Prime Minister’s Research Fellowship scheme aims to attract the talent pool of the country…

1 week ago
  • Scholarships

MCM Scholarship 2021 – Know All About Merit cum Means Scholarship

MCM Scholarship is a merit cum means scholarship that offers monetary support to meritorious and…

1 week ago
  • Scholarships

How to Find the Right Scholarship Opportunity?

“How to find the right scholarship opportunity?” is one of the most commonly asked questions…

1 week ago
  • MahaDBT

MahaDBT Scholarship Status 2021 – Check Online Status, MahaDBT Key Dates

MahaDBT Scholarship Status is one of the important features of the MahaDBT scholarship portal that…

1 week ago
  • Scholarships
  • UP Scholarship

UP Scholarship Status 2021 – Check Scholarship Status through PFMS

UP scholarship status is one of the key features of UP scholarship portal (Scholarship &…

2 weeks ago
  • Exam
  • Olympiad

Olympiad Exams – Top 5 Competitive Exams to Take in 2021

Various organisations across the country conduct Olympiads, a category of competitive exams in India that…

2 weeks ago
  • Scholarships

DXC Progressing Minds Scholarship 2020-21 – Opening Ways for ‘Innovation in Technology’

‘DXC Progressing Minds Scholarship’ is an initiative of DXC Technology India to improve the social…

2 weeks ago
  • Scholarships

UGC Scholarship 2021 – University Grants Commission (UGC)

UGC Scholarship – University Grants Commission (UGC), a renowned statutory body established under the Ministry…

2 weeks ago