Need help paying off your student loan due to steep EMIs? Student loan refinancing may be the right option. It is a simple process where you can use a new loan to replace your existing student loan. The new loan typically comes with more favourable terms and conditions.
Before you get into the details of refinancing a student loan, decide whether or not you should opt for this facility. Typically, refinancing your student loan may be a good option if:
If you’re ready to refinance your student loan for more convenient and beneficial borrowing, here’s what you need to do.
To qualify for student loan refinancing, you must have a good credit score and meet the lender’s eligibility criteria. Typically, these criteria revolve around the borrower’s income levels, the nature of their job and overall repayment history.
You can then proceed to compare the various refinancing options available to you. See how the interest rates match the rates on your existing student loans. Check if any lenders offer favourable terms and conditions concerning the repayment tenure and the loan. This will help you shortlist the loans that best meet your repayment capacity.
Once you’ve narrowed down your options, you can choose a lender whose refinancing terms meet what you’re seeking. Ensure you meet this lender’s eligibility criteria to qualify for the student loan refinancing facility. If it works both ways, you can move on to the next step.
These days, most leading banks and lending institutions facilitate online loan applications. You can also apply for the refinancing option in person if that’s more convenient for you. Whichever option you choose, ensure that you fill out the application form completely and without errors and submit all the necessary paperwork along with it.
If your new loan is approved, you will have to pay the revised EMI each month. Pay these dues promptly so your credit score remains high and your repayment history remains impeccable.
Now that you know how to refinance a student loan, you need to make an informed and prudent decision about whether or not this is the right course of action for you. Comparing your financial liability under your existing loans and a new loan can be a good place to begin.
Fi Money’s EMI calculator can help you with this. Additionally, suppose you want to make your repayments more manageable. In that case, you can always use the Analyser — an AI-powered money management platform from Fi — to analyse and reduce your expenses to save more and repay your loans quickly.
It can be hard to refinance student loans if you have a poor credit score or if your repayment history is less than satisfactory. Additionally, refinancing your student loan can be challenging if you do not have a steady source of income or if your income levels do not meet the lender’s eligibility criteria.
Student loan refinancing has several benefits, including lower EMI payments, more convenient repayment tenure and more favourable terms. Once you know how to refinance student loans, you can complete the process and enjoy the benefits.