5 Big Student Loan Misconceptions to Avoid
- Is there a need of an 800 credit score to be approved for student loan refinance? Every private lender company sets its own criteria, including credit score, employment status and monthly cash flow. Usually, the needed credit score is about mid-600’s. In case, you do not meet the criteria for your student loan refinance, companies can approve and refinance your loan with a help of a co-signer. A co-signer is a person who can be responsible for your refinance approval. It can be a parent, a spouse, a relative, or even a friend who supports your education goals. Once you are approved for a student loan refinance, a co-signer can avoid being financially responsible for your student loan. A company can release a co-singer from the obligation to repay the student loan.
- It is nearly impossible to get a student loan forgiven. There are several criteria for your student loan to be forgiven. It must be Stafford Loan, a federal direct student loan, or consolidated loan you borrow from the federal government. You should clarify this issue from the very beginning. If it is a private loan, it cannot be forgiven. Plus, you need to apply for Public Service Loan Forgiveness and Teacher Student Loan Forgiveness. There you will need to meet some qualifications to have your student loan forgiven. That is why be careful not to be surprised within years that you loan is private. Clear this issue straight away.
- If somebody once refinanced their student loan, they can’t refinance student loans again. You can freely make use of low interest rates to refinance your student loan. There is no limit on how many times you do so. Remember that you need to find a company to refinance your student loan that do not have any fee, either application or origination one.
- If you apply to more than one lender to refinance, it can hurt your credit score. This is a common misconception. You can apply to as many student loan companies as you want. It will highly increase your chances of approval. If your application takes only several minutes, you can find out about your interest rate, and it will not have any impact on your credit score. If you do some interest rate shopping for a focused time period, it will little or will not affect your credit score at all.
- Can I choose what student loan to refinance? Yes, you can. Certainly, you can choose high rates interest student loan to refinance. This is how you can lower your overall student payments. Plus this is how you can save on your student loan interest. You choose and pick what student loan you want to refinance.
These are five main misconceptions and unanswered questions lots of students have. We hope we clarified lack of information and explained all the subtleties of student loan refinance, student loan repayment and student loan forgiveness.
Choose a company to refinance your student loan wisely, as it will help you to save your time and money. Do not be scared to ask as many times as you need to get the information about your student loan, as this is your money you are talking about.