Refinancing Your Loan
Clever Strategy that helped me finish my loan installments earlier
Taking a loan for higher education is actually pretty expensive. And firms like credila charge a whopping 12% for loan amounts. Yes, there are cheaper options like State Banks and government banks which can offer loans with collateral. However, even those are at 8%. This is where I was advised by someone to pursue a loan from USA And they offer loans at literally half the rates of Indian counterparts. And I could have gotten the loan directly at the time of study. However, I didn’t have a co-signor.
A cosignor is someone who has a green card/citizen and is willing to provide guarantee on your behalf. So, that meant I could still get the refinancing option. The only thing is I needed a job. So, until that time, I had to pay on my interest payments to Credila. However, as soon as I had a job, I started looking at refinancing options which would help me reduce my fees. And here’s the options I found. I have also listed their features below.
1. Credible
Fixed APR: Starting at 3.99%
Variable APR: Starting at 3.99%
Loan Amounts: $10,000 to $400,000
Loan Terms: 5–20 years
Minimum Credit Score: Typically 720
Highlights: Allows comparison of rates from multiple lenders without affecting your credit score
2. SoFi
Fixed APR: 4.49%–9.99% (with autopay and direct deposit discounts)
Variable APR: 5.99%–9.99%
Loan Terms: 5–20 years
Minimum Credit Score: Not specified
Highlights: Offers unemployment protection, career coaching, and financial planning services.
3. ELFI (Education Loan Finance)
Fixed APR: 4.88%–8.44%
Loan Amounts: Starting at $10,000
Loan Terms: 5–20 years
Minimum Credit Score: 680
Highlights: Provides a personal loan advisor to guide you through the refinancing process.
4. LendKey
Fixed APR: 4.89%–9.64%
Loan Amounts: $5,000 up to 100% of the amount borrowed
Loan Terms: 5–20 years
Minimum Credit Score: 680
Highlights: Connects borrowers with community banks and credit unions, offering competitive rates.
5. Laurel Road
Fixed APR: 4.99%–8.90% (with discounts)
Variable APR: 5.29%–9.20%
Loan Terms: 5–20 years
Highlights: Offers additional discounts when you open a Laurel Road Linked Checking® account and set up qualifying direct deposits.
6. Earnest
Fixed APR: 4.50%–10.74%
Variable APR: 6.13%–10.74%
Loan Terms: 5–20 years
Highlights: Allows customization of your monthly payment and loan term to fit your budget.
Process of Applying for a Loan :
Check Your Credit Score
A score of 670+ is typically needed; 700+ gets better rates.
Improve your score if needed before applying.
Compare Lenders
Use platforms like Credible, LendKey, or individual lenders (e.g., SoFi, Earnest) as mentioned above to compare rates.
Use prequalification tools to check rates without affecting your credit score.
Choose a Lender
Select the lender that offers the best combination of rate, term, and benefits.
Complete a Formal Application
This triggers a hard credit inquiry.
You'll need to provide personal, financial, and loan information.
Submit Required Documents
See document checklist below.
Loan Approval and Offer
If approved, you’ll receive loan terms for review and acceptance.
Accept the Offer
Sign the loan agreement electronically.
Disbursement
The lender pays off your existing loans directly.
You’ll now make payments to the new lender.
DOCUMENTS REQUIRED :
Proof of Identity
Government-issued ID (passport, driver’s license)
Proof of Employment and Income
Most recent pay stubs (last 1–2 months)
W-2 forms or tax returns (especially for self-employed)
Employment verification letter (sometimes)
Loan Information
Current loan statements (with loan balance, interest rate, lender name, account number)
Proof of Graduation
Degree certificate or transcript from your university
Proof of Residency
Utility bill, lease agreement, or driver’s license with current address
Social Security Number
For identity and credit check
Hope you find this helpful!