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Is Refinancing Student Loans Right for You?

It’s a great time to reevaluate your finances and work toward paying down debt. One way to achieve this is to refinance your student loans. Sherry Peplinski, UW Credit Union’s educational lending product manager, answers common questions to help you determine if refinancing could be right for you.

What are some benefits of refinancing my student loans?

Refinancing your student loans can help you pay them off quicker. You could potentially lower your monthly payment, if that’s important to you. Lowering your interest rate or shortening your repayment term will result in paying less in interest. If you have multiple loans, having only one payment to manage each month can be achieved by refinancing. We offer terms to fit your situation—choose from a 5, 10 or 15-year term.

How can I determine what I’ll save by refinancing?

We can help you calculate your savings, as well as give you estimates for all your options, to help you select the loan that best suits your budget. Simply stop by any UW Credit Union branch or call us at 800-533-6773, ext. 2950 or email us at studentloans@uwcu.org. If you’re having budget challenges, you can also meet with a financial specialist for a no-cost Credit Consultation. During a Credit Consultation, we’ll review your full financial picture and look for ways to reduce payments and save interest on all your loans. Get started by booking a Credit Consultation.

What types of student loans am I able to refinance?

You can refinance private and federal student loans. Parents can also refinance PLUS loans, and children can refinance PLUS loans originally held by their parents. Keep in mind that if you choose to refinance federal student loans, you will lose the benefits associated with them like the ability to defer payments if you go back to school and loan forgiveness through the Public Service Loan Forgiveness Program. If you have multiple student loans, and some are at low rates, but others are high, you can decide to refinance only the higher rate loans.

What are some of the qualifications I should meet to refinance?

We ask for four years of credit history (not including student loans), a satisfactory credit score and the ability to comfortably afford the monthly payment. If you don’t have four years of credit history, you can also apply with a cosigner. A cosigner may also help you obtain a better interest rate, if you don’t have credit history.

What documents do I need, and what does the timeline look like?

You’ll need current student loan statements. We’ll confirm balances and verify where the payoff needs to be sent. It takes 2-4 weeks, on average, until your new loan is funded. It may take 1-2 weeks for your lender to process your payoff, so it’s possible that you’ll still have to make a payment to them before the payoff is processed. If this should occur, the lender sends the extra funds back to us to apply to your new loan as a refund.

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