- 1 refinance student loans with bad credit
- 2 Welcome To Bad Credit Loans Directory - Refinancing
- 3 How To Get Approved For Student Loans With Bad Credit
- 4 Student Loans 101: What You Need to Know About Refinancing Your Debt
- 4.1 1. Refinancing is not the same thing as consolidation.
- 4.2 2. When you refinance federal student loans, you’re privatizing them.
- 4.3 3. Your credit score — among other factors — will help determine your interest rate.
- 4.4 4. You may be offered fixed or variable interest rates.
- 4.5 5. You may or may not be able to change the terms of a refinanced loan.
- 5 19 Options to Refinance Student Loans in 2017 – Get Your Lowest Rate
- 5.0.1 1. SoFi: Variable Rates from 2.815% and Fixed Rates from 3.35% (with AutoPay)*
- 5.0.2 2. Earnest: Variable Rates from 2.81% and Fixed Rates from 3.35% (with AutoPay)
- 5.0.3 3. CommonBond: Variable Rates from 2.80% and Fixed Rates from 3.35% (with AutoPay)
- 5.0.4 4. LendKey: Variable Rates from 2.67% and Fixed Rates from 3.25% (with AutoPay)
refinance student loans with bad credit
Are you looking for funding for your studies? You’ve come to the right place. There are many loans available designed to meet student needs. It doesn’t matter if you’ve had past financial problems, if your credit is bad or if you don’t have credit at all. We will help you find the loan you need regardless of your credit. We will provide you with all the tips you need to successfully apply for a loan, you’ll learn all there is to know about the federal loan programs as well as other alternative private loan options for students. We are so confident that we guarantee you’ll get your loan.
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How To Get Approved For Student Loans With Bad Credit
Most parents will do anything to help their children get a good education and succeed in life, and that may eventually mean getting approved for private student loans with bad credit.
Any parent with a child in college is likely aware of the exorbitant price tag of a college education nowadays. Over the past three decades, the cost of college tuition has increased more than four times that of the average rise in family incomes.
Because of this, families have had to turn to loans and other financing to help students with obtaining their college degrees. But unfortunately, not everyone has good credit. While some may feel that this could hinder them from finding the aid they need, there are still actually many student loan options available to you if you have a bad credit history. Below, we will discuss how to get a student loan with bad credit.
When it comes to any type of borrowing, your credit can play a key role – and lenders in the private student loan arena are no different. This is because the lender wants to be assured that they aren’t taking on too much risk in terms of being paid back for the funds that they are loaning you.
There are three credit bureaus that creditors report to. These are Equifax, Experian, and TransUnion. Some creditors will report to all three, while others may only report to one or two. Although each calculates scores just a bit differently, overall, credit scores can range from a high of 850 down to a low of 300.
In terms of what is viewed as “good” or “bad” credit, most lenders will break the scores down as follows:
A private lender will typically evaluate a student (or a student and parents) based on their credit score, and will not generally loan funds to anyone who has a score that is lower than 620. The good news is that your credit score can – and often does – change regularly. So, if it is in a lower range currently, you can usually bring it up by making payments on time and / or removing any negative information that may be inaccurate on your credit report.
If your credit falls into the poor or bad credit category, it doesn’t mean that getting a student loan won’t be possible. You may just need to narrow down your options. The best place to start in this case is with federal financial aid.
One of the primary reasons that federal student loans are a good option is because the federal government doesn’t check the credit history of applicants for student loans. This can make the process of approval much easier on a federal loan than going the route of financing through a private lender.
Although there are numerous options available via the government in terms of student funding, there are some that are more likely to be better than others if you have bad credit. These include the following:
There are actually two forms of the Stafford Loan. One is a need-based version that is based on income. The government pays the interest on this loan while the student is still going to school, and during the loan’s “grace period” before the repayment begins. This is referred to as a “subsidized” Stafford loan. These loans are only available to undergraduate students.
There is also an “unsubsidized” Stafford loan. This version of the Stafford loan is not based on income. The school determines the amount that can be borrowed, based on the cost to attend the institution, as well as any other financial aid that the student is receiving. With an unsubsidized Stafford loan, interest must be paid during all periods. These Stafford loans are available to undergraduates, as well as to graduate and professional degree students.
In order to be eligible for either type of Stafford loan, it is necessary to be enrolled at least half-time in a program that leads to either a degree or a certificate that is awarded by the school.
Perkins loans are low-interest federal student loans that are available to both undergraduate and graduate students who have what is considered to be exceptional financial need. As long as you are attending school at least half-time, you do not need to begin making repayments on a Perkins loan until nine months after you either graduate, leave school, or drop below half-time status as a student.
With a Perkins loan, the school actually acts as the lender, so repayments are made to the college or university. However, it is important to note that not all colleges and universities participate in the Perkins Loan program. Therefore, it will be necessary to check with your school in order to ensure that it is a part of this program if this is an area of financial aid that you want to pursue.
Students or parents may also obtain a PLUS loan. These federal loans are available directly to graduate or professional students, as well as to parents of dependent undergraduate students through the United States Department of Education.
Although a credit check will be performed during the application process, you may still be able to qualify for a PLUS loan if you are able to obtain a cosigner who has a good credit standing and / or you are able to document that your adverse credit history is due to extenuating circumstances.
How to Improve Your Chances for Financing with a Cosigner
Having a family member who has a strong credit history act as a cosigner can help a great deal in getting your student loan approved. This is especially the case if you are applying for private funding through a lender.
By having a financially responsible party on the application who has a high credit score, it can provide more assurance to the lender that payments on the loan will be carried out as promised. This can also help you to possibly obtain a lower interest rate on the loan, in turn, reducing your monthly payment amount.
Having low (or no) credit does not necessarily mean that a student loan will be impossible to obtain. There are still several avenues that you can take, including government financial aid, and even private loans with a cosigner. Knowing which loans you may be eligible for can help you to narrow down your options and get directly to your best potential options more quickly.
Student Loans 101: What You Need to Know About Refinancing Your Debt
With the price tag on higher education growing steeper every year, it’s become routine for most graduates to head into the real world not only with a degree, but also with about five figures of debt. In fact, the Wall Street Journal reported stats from student loan pro Mark Kantrowitz that show the average borrower from the class of 2016 left school with more than $37,000 in student loans—adding to the $1.3 trillion in total college debt the Federal Reserve reports that Americans now carry.
Typically, these balances are spread out across multiple loans that may carry varying conditions and interest rates. Some people may mistakenly believe that because they’ve signed those promissory notes, they are stuck with the loan terms they graduated with—but it is possible to refinance student loans in much the same way you can refinance a mortgage or car loan.
Refinancing can be a worthwhile strategy for borrowers hoping to ease the burden of repayment, because it could mean you’ll pay less over the life of your loan. That said, it may not be suitable for everyone’s situation, and there’s much to consider before you decide whether it’s the right option for you.
To help you understand the basics, we pulled together the quick primer below with five things you need to know about student loan refinancing.
1. Refinancing is not the same thing as consolidation.
Refinancing “means that you take out a new loan that pays off your other existing loans,” says Robert Farrington, founder of TheCollegeInvestor.com, a website that helps Millennials manage their student loan debt. Your new interest rate and terms depend on what you qualify for with your lender. Reasons why you may choose to refinance include getting better loan terms and a lower interest rate than what you’re currently getting, Farrington adds.
It is possible to refinance multiple student loans, whether they are public or private, into one loan, but be careful not to confuse refinancing with consolidation. Typically, when people talk about consolidating their student loans, they are referring to the federal government’s direct consolidation loan program, which only applies to federal loans. This enables you to combine multiple federal loans into a single loan, so you can make a single monthly payment. Your new interest rate is based on the weighted average of the interest rates on all the federal loans you’re consolidating, and it is fixed for the life of the loan.
2. When you refinance federal student loans, you’re privatizing them.
Both federal and private loans can be refinanced, but if you choose to refinance your federal loans, then you’re opting to pay back a private lender as opposed to the government—and there’s no reversing back to federal-loan status. “[Student loan consolidation] is a free service and it only impacts federal loans,” Farrington says. “Refinancing, on the other hand, is done by private banks and companies.”
Refinancing could give you a lower interest rate on both private and federal loans, but refinancing a federal loan may mean giving up some federal loan benefits that you might qualify for, such as income-driven repayment options, loan forgiveness or deferment and forbearance programs. Not all private lenders offer these options.
3. Your credit score — among other factors — will help determine your interest rate.
The interest rate for federal student loans is based on whatever federal law mandated at the time you borrowed the money and remains fixed for the duration of the loan. Private lenders, however, will look at your credit score to determine what kind of interest rates to offer you and might even consider other factors like your college degree and how much income you’re currently earning, says Pamela Capalad, CFP®, a Brooklyn, New York-based financial planner.
And, as with other types of loans, if your credit score isn’t strong enough to nab a lower interest rate than what you’re currently paying, you may be asked or required to get a cosigner for the loan, Farrington says. Just remember that your cosigner is potentially putting his or her credit on the line for you, so it’s worth looking to see if your lender offers features like a cosigner release, which removes the cosigner from the loan after a predetermined period of time in which you’ve proven you can make your payments.
4. You may be offered fixed or variable interest rates.
As we mentioned, federal student loans are fixed, which means their interest rate won’t change for the life of the loan unless you decide to consolidate them. But if you decide to go the refinancing route, you may be offered either fixed or variable interest rates, which means your interest rate could change after a specified period of time, generally anywhere from a month to a year.
Typically, variable rates start low, but they have the potential to shoot up once the introductory period is over, which means you potentially put yourself at risk of paying a much higher rate down the line. On the flip side, if you qualify for a loan that offers a really low interest rate for an extended period of time, it could save you on total interest paid, particularly if you pay off the loan before the interest rate goes up.
Another thing to keep an eye out for when it comes to calculating the total cost of refinancing a student loan is the amount you may end up paying in origination fees, says Capalad. If you see these costs, it “basically means that the loan company is charging you a certain percentage of the amount you borrow to actually switch the loan over,” she says. “So that’s something to take into consideration as well.”
5. You may or may not be able to change the terms of a refinanced loan.
Because refinancing means you’re taking on a new loan with new terms, once you’ve chosen to refinance you’ll be responsible for keeping up with your new monthly payment. Some private lenders do allow flexibility when it comes to changing your terms down the line. But it is typically harder to get deferment or forbearance options for private loans than it would be for federal loans.
So it’s important to weigh various factors before deciding to refinance. These can include how much in interest you’ll end up paying over the life of your loan; whether you’re willing to shorten or lengthen your repayment period; how much your monthly payment amount could be; and how stable you expect your income to be (which can help you determine if you may need to rely on federal income-based repayment options in the future).
Ultimately, what you’re trying to balance are your short- and long-term goals. “What makes the most sense for my budget now? And what will make the most sense for my budget later?” says Capalad. “I think those are the questions you should ask yourself when you’re considering refinancing.”
LearnVest Planning Services does not specifically recommend any particular security product or service. This article is presented by First Republic Bank in a paid partnership with LearnVest Planning Services.
LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Unless specifically identified as such, the individuals interviewed or otherwise listed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services and the views expressed are their own. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies. LearnVest, Inc., is wholly owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
The information in this article is provided as is and does not necessarily reflect the opinions of First Republic Bank.
19 Options to Refinance Student Loans in 2017 – Get Your Lowest Rate
Thursday, August 31, 2017
The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.
Nick Clements has worked in consumer banking for nearly 15 years and is the co-founder of MagnifyMoney.
Are you tired of paying a high interest rate on your student loan debt? You may be looking for ways to refinance your student loans at a lower interest rate, but don’t know where to turn. We have created the most complete list of lenders currently willing to refinance student loan debt.
You should always shop around for the best rate. Don’t worry about the impact on your credit score of applying to multiple lenders: so long as you complete all of your applications within 14 days, it will only count as one inquiry on your credit score. You can see the full list of lenders below, but we recommend you start here, and check rates from the top 4 national lenders offering the lowest interest rates. These 4 lenders also allow you to check your rate without impacting your score (using a soft credit pull), and offer the best rates of 2017:
We have also created:
- A student loan refinance calculator, which can help you find out how much money you can save if you refinance
- A comparison tool which lets you see student loan terms all at once, with no need to give up personal information.
But before you refinance, read on to see if you are ready to refinance your student loans.
Loan approval rules vary by lender. However, all of the lenders will want:
- Proof that you can afford your payments. That means you have a job with income that is sufficient to cover your student loans and all of your other expenses.
- Proof that you are a responsible borrower, with a demonstrated record of on-time payments. For some lenders, that means that they use the traditional FICO, requiring a good score. For other lenders, they may just have some basic rules, like no missed payments, or a certain number of on-time payments required to prove that you are responsible.
If you are in financial difficulty and can’t afford your monthly payments, a refinance is not the solution. Instead, you should look at options to avoid a default on student loan debt.
This is particularly important if you have Federal loans.
Don’t refinance Federal loans unless you are very comfortable with your ability to repay. Think hard about the chances you won’t be able to make payments for a few months. Once you refinance, you may lose flexible Federal payment options that can help you if you genuinely can’t afford the payments you have today. Check the Federal loan repayment estimator to make sure you see all the Federal options you have right now.
If you can afford your monthly payment, but you have been a sloppy payer, then you will likely need to demonstrate responsibility before applying for a refinance.
But, if you can afford your current monthly payment and have been responsible with those payments, then a refinance could be possible and help you pay the debt off sooner.
Like any form of debt, your goal with a student loan should be to pay as low an interest rate as possible. Other than a mortgage, you will likely never have a debt as large as your student loan.
If you are able to reduce the interest rate by re-financing, then you should consider the transaction. However, make sure you include the following in any decision:
Many lenders have no fee, which is great news. If there is an origination fee, you need to make sure that it is worth paying. If you plan on paying off your loan very quickly, then you may not want to pay a fee. But, if you are going to be paying your loan for a long time, a fee may be worth paying.
Variable interest rates will almost always be lower than fixed interest rates. But there is a reason: you end up taking all of the interest rate risk. We are currently at all-time low interest rates. So, we know that interest rates will go up, we just don’t know when.
This is a judgment call. Just remember, when rates go up, so do your payments. And, in a higher rate environment, you will not be able to refinance to a better option (because all rates will be going up).
We typically recommend fixing the rate as much as possible, unless you know that you can pay off your debt during a short time period. If you think it will take you 20 years to pay off your loan, you don’t want to bet on the next 20 years of interest rates. But, if you think you will pay it off in five years, you may want to take the bet. Some providers with variable rates will cap them, which can help temper some of the risk.
If you go to other sites they may claim to compare several student loan offers in one step. Just beware that they might only show you deals that pay them a referral fee, so you could miss out on lenders ready to give you better terms. Below is what we believe is the most comprehensive list of current student loan refinancing lenders.
You should take the time to shop around. FICO says there is little to no impact on your credit score for rate shopping as many providers as you’d like in a single shopping period (which can be between 14-30 days, depending upon the version of FICO). So set aside a day and apply to as many as you feel comfortable with to get a sense of who is ready to give you the best terms.
Here are more details on the 5 lenders offering the lowest interest rates:
1. SoFi: Variable Rates from 2.815% and Fixed Rates from 3.35% (with AutoPay)*
SoFi (read our full SoFi review) was one of the first lenders to start offering student loan refinancing products. More MagnifyMoney readers have chosen SoFi than any other lender. Although SoFi initially targeted a very select group of universities (it started with Stanford), now almost anyone can apply, including if you graduated from a trade school. The only requirement is that you graduated from a Title IV school. You need to have a degree, a good job and good income in order to qualify. SoFi wants to be more than just a lender. If you lose your job, SoFi will help you find a new one. If you need a mortgage for a first home, they are there to help. And, surprisingly, they also want to get you a date. SoFi is famous for hosting parties for customers across the country, and creating a dating app to match borrowers with each other.
on SoFi’s secure website
2. Earnest: Variable Rates from 2.81% and Fixed Rates from 3.35% (with AutoPay)
Earnest (read our full Earnest review) offers fixed interest rates starting at 3.35% and variable rates starting at 2.81%. Unlike any of the other lenders, you can switch between fixed and variable rates throughout the life of your loan. You can do that one time every six months until the loan is paid off. That means you can take advantage of the low variable interest rates now, and then lock in a higher fixed rate later. You can choose your own monthly payment, based upon what you can afford (to the penny). Earnest also offers bi-weekly payments and “skip a payment” if you run into difficulty.
3. CommonBond: Variable Rates from 2.80% and Fixed Rates from 3.35% (with AutoPay)
CommonBond (read our full CommonBond review) started out lending exclusively to graduate students. They initially targeted doctors with more than $100,000 of debt. Over time, CommonBond has expanded and now offers student loan refinancing options to graduates of almost any university (graduate and undergraduate). In addition (and we think this is pretty cool), CommonBond will fund the education of someone in need in an emerging market for every loan that closes. So not only will you save money, but someone in need will get access to an education.
4. LendKey: Variable Rates from 2.67% and Fixed Rates from 3.25% (with AutoPay)
LendKey (read our full LendKey review) works with community banks and credit unions across the country. Although you apply with LendKey, your loan will be with a community bank. If you like the idea of working with a credit union or community bank, LendKey could be a great option. Over the past year, LendKey has become increasingly competitive on pricing, and frequently has a better rate than some of the more famous marketplace lenders.
In addition to the Top 4 (ranked by interest rate), there are many more lenders offering to refinance student loans. Below is a listing of all providers we have found so far. This list includes credit unions that may have limited membership. We will continue to update this list as we find more lenders. This list is ordered alphabetically:
- Alliant Credit Union: Anyone can join this credit union. Interest rates start as low as 4.25% APR. You can borrow up to $100,000 for up to 25 years.
- Citizens Bank: Variable interest rates range from 2.77% APR – 8.62% APR and fixed rates range from 4.74% – 8.24%. You can borrow for up to 20 years. Citizens also offers discounts up to 0.50% (0.25% if you have another account and 0.25% if you have automated monthly payments).
- College Avenue: If you have a medical degree, you can borrow up to $250,000. Otherwise, you can borrow up to $150,000. Fixed rates range from 4.65% – 7.50% APR. Variable rates range from 4.01% – 7.01% APR.
- Credit Union Student Choice: If you like credit unions and community banks, we recommend that you start with LendKey. However, if you can’t find a good loan from a LendKey partner, this tool could be helpful. Just check to see if you or an immediate family member belong to one of their featured credit union and you can apply to refinance your loan.
- Laurel Road (formerly known as DRB) Student Loan: Laurel Road offers variable rates ranging from 2.99% – 6.42% APR and fixed rates from 3.95% – 6.99% APR. Rates vary by term, and you can borrow up to 20 years.
- Eastman Credit Union: Credit union membership is restricted (see eligibility here). Fixed rates start at 6.50% and go up to 8% APR.
- Education Success Loans: This company has a unique pricing structure: your interest rate is fixed and then becomes variable thereafter. You can fix the rate at 4.99% APR for the first year, and it is then becomes variable. The longest you can fix the rate is 10 years at 7.99%, and it is then variable thereafter. Given this pricing, you would probably get a better deal elsewhere.
- EdVest: This company is the non-profit student loan program of the state of New Hampshire which has become available more broadly. Rates are very competitive, ranging from 3.94% – 7.54% (fixed) and 3.16% – 6.76% APR (variable).
- First Republic Eagle Gold. The interest rates are great, but this option is not for everyone. Fixed rates range from 2.35% – 3.95% APR. You need to visit a branch and open a checking account (which has a $3,500 minimum balance to avoid fees). Branches are located in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich or New York City. Loans must be $60,000 – $300,000. First Republic wants to recruit their future high net worth clients with this product.
- IHelp: This service will find a community bank. Unfortunately, these community banks don’t have the best interest rates. Fixed rates range from 4.65% to 8.84% APR (for loans up to 15 years). If you want to get a loan from a community bank or credit union, we recommend trying LendKey instead.
- Navy Federal Credit Union: This credit union offers limited membership. For men and women who serve (or have served), the credit union can offer excellent rates and specialized underwriting. Variable interest rates start at 3.42% and fixed rates start at 4.00%.
- Purefy: Only fixed interest rates are available, with rates ranging from 3.95% – 6.75% APR. You can borrow up to $150,000 for up to 15 years. Just answer a few questions on their site, and you can get an indication of the rate.
- RISLA: Just like New Hampshire, the state of Rhode Island wants to help you save. You can get fixed rates starting as low as 3.49%. And you do not need to have lived or studied in Rhode Island to benefit.
- UW Credit Union: This credit union has limited membership (you can find out who can join here, but you had better be in Wisconsin). You can borrow from $5,000 to $60,000 and rates start as low as 2.76% (variable) and 4.04% APR (fixed).
- Wells Fargo: As a traditional lender, Wells Fargo will look at credit score and debt burden. They offer both fixed and variable loans, with variable rates starting at 4.49% and fixed rates starting at 6.24%. You would likely get much lower interest rates from some of the new Silicon Valley lenders or the credit unions.