Guide to Refinancing Student Loans at Nursing Schools

From: Kathleen Gaines, MSN, BA, RN, CBC

According to a 2018 report by the American Association of Colleges of Nursing (AACN), college nursing students expected to graduate from their program with an average debt of $ 40,000 to $ 54,999. And the National Student Nurses’ Association found a small percentage of ADN-RNs and BSN-RNs with up to $ 80,000 in student debt.

If you are a nursing student struggling with such debts, your student loans can be refinanced. Refinancing your student loan essentially means taking out a new loan at a new (hopefully lower) interest rate. Caregivers with high interest rates or loans from multiple lenders can save big money and reduce repayment time by years by consolidating their loans and refinancing at a new, lower interest rate. In this article, we will tell you what refinancing your loan means, how best to do it, and how you can benefit from it.

What is Student Loan Refinancing?

When refinancing the student loan, a new loan is taken out at a new (lower) interest rate. Private student loans can be refinanced with a new or same lender. Federal student loans are often paid off through a personal loan.

Refinancing the student loan at a lower interest rate has MANY benefits including:

  • Lower monthly payments
  • The ability to repay student loans faster
  • A decreased debt to income ratio
  • The ability to pause payments
  • Simplified student loan administration

>> Check if you are eligible for a Nursing Student Loan Refinance. *

Should You Consider Refinancing Your Student Loans?

Student loan refinancing is a great option for those looking to save thousands of dollars and meet the eligibility criteria. Refinancing private student loans has minor disadvantages, but refinancing federal student loans has potential disadvantages. Individuals would give up income-oriented repayment plans, loan deferrals, and loan waivers. Even if you refinance a government student loan and it becomes a private student loan, you will not be eligible for any government grant for student debt.

Refinancing is often a good option if the interest rates are well below the original interest rate on your student loan. Now is a VERY good time as interest rates are low due to COVID-19, but whether or not it is a good time will depend on your specific situation. Ultimately, not everyone can qualify to refinance their student loan. If you meet the above requirements, consider refinancing.

Refinance or not refinance?

Refinancing is a good option if you:

Refinancing is not a good option if you:

  • Can lower your interest rate enough to earn you significant savings every month
  • Can repay your loans faster
  • Have private student loans
  • Have student loans with high variable interest rates
  • Your finances have improved since you received your loan
  • Have federal loans
  • Have a decline in or fluctuating income
  • Strive for student loan remission
  • Have recently filed for bankruptcy or are planning to file for bankruptcy
  • Recently defaulted with student debt

What qualifications do I need to get refinancing?

Lenders will consider a few factors to determine whether or not you are a good candidate for loan refinancing. These include:

1. Creditworthiness

Lenders will first check your creditworthiness to determine your financial responsibility. By evaluating your creditworthiness, lenders can determine whether you are able to meet your financial obligations and whether you have made timely payments in the past. Some lenders charge it a credit rating of at least 600 while others have no minimum. Recommend financial advisor a credit score of at least 700 to maximize the chances of getting approval.

Co-signers can improve your chances when you have poor credit

Don’t have a good credit score and not sure if you will qualify? Lenders will approve a co-signer for the new loan, but that person must have a solid credit history. Remember, if you default on payments or are unable to make payments, this person is responsible for making payments. Most will have their parents or spouse sign it if possible, but this can also affect their creditworthiness.

If co-signing is not an option, your best bet is to upgrade your credit score before refinancing. You can do this by paying off your credit card debt, making sure your payments are on time, and increasing your salary if possible. Upgrading your credit score can take some time, so it may not be an option if you’re looking for low interest rates now.

2. Debt-To-Income Ratio

Your debt-to-income ratio is very important to lenders as it tells them what percentage of the income will be used for bills. This is one of the first things a lender will check along with your creditworthiness.

Essentially, they divide your total monthly payments by your monthly earnings. Generally, lenders want that Debt-to-income ratio below 50%.

3. Employment

Lenders also want to see that you have a steady job and / or income to show that you can make payments continuously with no problems. Some will require Proof of income and you should be able to do it prove that you have savings to pay for at least two months of recurring expenses, including housing.

4. Completion of studies

The refinancing of the student loan is generally only available to graduates. Some will ask for details about your degree and degree. While a degree is not always required, it dramatically reduces student loan refinancing options and with so many lenders you will be out of the question.

How to refinance your student loan

  1. Determine if you are eligible and the refinance is right for you
  2. Look around to find the best student loan interest rates (these are generally the same, but some banks offer incentives)
  3. Contact multiple lenders for interest rate estimates
  4. Talk to lenders to find the best solution and ask all of your questions
  5. Choose a lender and loan terms
  6. Fill out a student loan refinancing application
  7. Sign all documents and related paperwork
  8. Wait for a credit check
  9. Pay off other student loans (federal or personal loans) with the loan repayment check

>> Check if you are eligible for a Nursing Student Loan Refinance. *

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