Student Loan Refinance | Wright-Patt Credit Union (2024)

FAQs

Is it hard to get approved for student loan refinance? ›

In order to refinance a student loan, lenders tend to require a strong credit score, a stable income, a degree and a decent debt-to-income ratio. Lenders require a minimum refinancing amount, which is the amount you still have to pay on the loan. This is so the lender can make enough interest.

According to Experian, one of the three main credit bureaus, 670 is generally the base credit score that lenders require to be eligible for student loan refinancing. On the FICO Score ranges, scores between 670 and 739 are considered 'good.

Service Credit Union student loan refinancing options are available for private and federal student loans. Parents can also refinance their federal Direct PLUS loans. Variable or fixed-rate refinancing options are available across multiple repayment terms.

You generally can't or shouldn't refinance if: You have federal loans and could see a drop in income. If there's a chance your income could decrease, don't refinance federal student loans. You'll miss out on federal student loan relief options, as well as government programs like income-driven repayment.

Before refinancing your student loans, carefully analyze your financial situation and compare lenders to make an informed decision. While refinancing can potentially lower your interest rate and monthly payments, it may also result in the loss of federal benefits and require a good credit score to qualify.

ELFI Student Loan Refinance Eligibility Requirements*

Must have earned a Bachelor's degree or higher. Must have a minimum income of $35,000. Must have a minimum credit score of 680. Must have a minimum credit history of 36 months.

Because credit unions are “non-profit” credit unions tend to have lower mortgage interest rates and fewer lender fees. So, if you're shopping for a lender and comparing banks and mortgage brokers, don't forget to see what credit unions have to offer. We think you'll be pleasantly surprised.

Consolidating Student Loans with Bad Credit

If your score is under 650, It is unlikely you will qualify for consolidation from private lenders by yourself. You'll need to find a co-signer with good credit and continue to pay bills on time until your credit score improves. Things get more difficult without a co-signer.

There's no penalty for paying off student loans early or paying more than the minimum.

Can I transfer my student loan to a credit union? ›

With student loan refinancing, you work with a private lender to consolidate your loans. Your loans are transferred to the bank or credit union issuing the loan, so your loans are no longer federal. Private student loan refinancing can help you qualify for a lower rate and save money.

Refinancing is essentially just borrowing money via a new loan to pay off an existing lender, so there's no limit to the number of times you can do this. You're only limited by the amount of time you have to research what's best for you. You can refinance all of your student loans at once or just part of what you owe.

Not all homeowners are approved for refinancing, though. With home prices and interest rates still high, lenders are careful about who they approve. The rejection rate on mortgage refinance applications increased to 15.5% in 2023 from 9.9% in 2022, according to the Federal Reserve Bank of New York.

In general, you'll need to have a credit score in the mid- to high 600s, a debt-to-income ratio of less than 43 percent and a source of steady income to refinance a student loan, but the requirements vary by lender. Getting pre-qualified is an excellent way to see if you're eligible for student loan refinancing.

Some of these penalties include added interest, higher fees, or even wage garnishment. As mentioned above, this also affects your credit score, having a rippling effect on big purchases you plan to make. Staying on top of your loan payments is crucial for your financial success.

Your credit score gauges how likely you are to repay a loan and is usually measured on a scale from 300 to 850. To be approved for a conventional mortgage, you typically need a minimum 620 credit score. If your score is below the mid-600s, however, you may have a harder time qualifying for a refinance.

Fortunately, about a third (35.1%) of borrowers refinanced with the goal of lowering their interest rate. More than a quarter of borrowers (26.5%) refinanced in order to consolidate multiple loans into one.

Typically, it will take 30-45 days for the existing loan provider to receive the payment and apply it to your account. It is essential to check with your current provider to see if the payoff is applied to your account. How long do I need to continue making payments with my existing lender after I refinance?

For private student loans, interest can be fixed or variable and vary by lender. The lowest rates are usually reserved for those with the highest credit scores. Having a low credit score or none at all means you may struggle to be approved.