Check student loan refinance rates in 2022 offered by these 5 best student loan refinance lenders. Get to know the pros and cons of student loan refinancing, how to apply, the interest rate on student loans right now, and how to pay off student loans in easy steps. Let Mount Shine’s comparison help you in choosing the best student loan refinance lender in 2022 and help you make a sound and smart decision.
Although the expenses differ from major to major, higher education, in general, can be pretty costly in today’s world. Therefore, student loans are a big help to move forward with education. At the same time, paying off those student loans becomes a difficult task. Refinancing student loans not only helps to save some money but also makes the repayment process faster.
What Is A Student Loan?
A student loan means borrowing money to pay for your education expenses which include college fees, books, etc. You can get this loan from the government or a private lender. Like all loans, you must pay back a student loan after you finish college.
To get government-sponsored student loans, you need to apply for federal loans by filling up the form called Free Application for Federal Student Aid (FAFSA) where you and your parents will provide all information about your financial situation. After your selected colleges go through this form, they will come up with a basic plan which will include how much loan you qualify for. In the case of private loans, students and parents go directly to the lender.
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How To Refinance Student Loans In 2022?
Refinancing student loans refers to the process of taking out a new loan from a private lender to pay back your student loans. The whole process usually includes a lot of shopping around to see what private lender gives you maximum benefits. However, there are a lot many factors that decide your interest rates based on which you can make a decision whether refinancing the student loan is a good option for you or not.
The interest rates on your new loan depend on multiple factors. Since one of the reasons behind refinancing is to get lower interest rates on the loans, you must be worried about what determines your interest rates. Obviously, a good credit score is the first step to getting lower rates. However, in order to understand whether you are a risky borrower or not, they will go over your debt vs income ratio which means how much of your monthly income goes into paying existing loans. The bigger this ratio is, the riskier you become as a borrower, which ultimately leads to higher interest rates.
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Why Is Refinance Student Loan A Better Option In 2022?
There are many benefits that come with refinancing a student loan. However, we should clear out one thing straightaway. Whereas it is better to refinance your private student loans, you should always think twice before refinancing any federal student loans. Federal student loans come with many benefits of their own, such as income-driven repayment plans, loan forgiveness programs, and many more. With a refinancing, you would lose all of these extra perks of the federal loans.
The very first reason to refinance is to pay lower interest than you pay for the private student loan already. In that case, more of your hard-earned money would go into paying the principal loan money, paying off your loan a lot faster.
Another good reason is to lessen the monthly bills for debt repayment. While refinancing you can opt for a longer loan repayment plan, reducing your monthly bill for debts. At the same time, if you have more than one student loan, consolidating them into one refinanced loan would cut out a lot of stress and chaos while reducing the monthly payment.
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How Do Student Loans Impact Your Taxes In 2022?
Student loans are not considered taxable income by the IRS as you will have to pay back that money eventually. However, there are other situations where your student loans can impact your taxes. One such instance is when your loans are forgiven or discharged. Under the loan forgiveness program, you do have to pay back the money anymore, hence making that loan taxable income.
Another way your student loans can affect your tax bill is if you opt for any employer assistance in paying off your debt. As many employers have started to recognize how student loans can become an obstacle to job performance, there are now multiple programs where the employer will assist by contributing to the repayment plan. However, in that case, the contribution amount will be counted as a taxable income which will obviously increase your tax bill. You will not have to pay any extra taxes for the first $5,250 of the employer assistance to your repayment plan, after which all assistance will be considered your income that can be taxed by the IRS.
How To Pay Off Student Loans In 2022?
Refinancing is one of the best options to pay off student loans. In that case, you will have two options to choose from. Depending on your financial situation and ambitions, you may make a decision. Firstly, you can find a private lender who will give a lower interest rate than you already have. In doing so, you will be able to contribute more to the actual loan rather than wasting on extra interests.
For lower interest rates, you would possibly need to apply for a short-term plan which would increase your monthly payment. However, in the end, you are paying way less money for interest than you would have. Otherwise, you can opt for a longer plan with lower interest rates to reduce your monthly bill. In both cases, you need a good credit score and stable employment to qualify for a good deal.
How To Pick The Best Student Loan Refinance Lender In 2022?
The safest way to choose the best student loan lenders for refinancing is through student loan refinance rates compare by going over various companies and calculating whether refinancing would be beneficial for you or not. Remember, the goal is to opt for a plan which will have a lower interest rate. However, there is more than one factor. You need to go over the terms and conditions very carefully to identify any hidden fees and regulations that would cause more problems than solving your existing ones.
The good news is that many online calculators make student loan refinance rates compare easy. You can compare pre-qualified interest rates without actually applying and submitting exhaustive forms. Also, before you select a lender, make sure you understand the pros and cons of fixed-rate and variable-rate loans. Whereas in fixed-rate loans, the interest rates remain the same, in the case of variable-rate loans, they fluctuate with the market. Therefore, with variable-rate loans, while you can have the chance to get a lower rate, you can also get higher if the market doesn’t do well.
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5 Best Student Loan Refinance Lender Rates: [Compare + Review]
Compare 5 best student loan refinance lender rates and see what their offers are, how much loan amount they are giving, the credit score required, what their fixed and variable APR is, etc.
1. Sofi student loan refinance rates: Best Overal Student Loan Refinance Company
2. Earnest student loan refinance rates: Best Student Loan Refinance Company For Flexible Repayment Options
3. Citizens Bank student loan refinance rates: Best Student Loan Refinance Company For Available Discounts
4. Splash Financial student loan refinance rates: Best Student Loan Refinance Company For Low Rates
5. College Ave student loan refinance rates: Best Student Loan Refinance Company for No Fees and Bad Credit
1. Sofi Student Loan Refinance Rates: Best Overal Student Loan Refinance Company
Sofi is one of the trustworthy options for both federal and private student loans. They have various forbearance programs including unemployment protection to help the borrower in financial crises.
- Credit Score: Good or Excellent
- Loan Amount: $5k – $500k
- Fixed APR: 3.49 – 7.99%
- Variable APR: 1.74% – 7.99%
2. Earnest Student Loan Refinance Rates: Best Student Loan Refinance Company For Flexible Repayment Options
Having a lot of options in regard to the repayment programs, Earnest is known for its flexibility. Although it does provide any cosigned loans, Earnest has deferment plans for financial hardship for up to 12 months. Most importantly, the whole process does not take much time.
- Credit Score: 650
- Loan Amount: $5k – $500k
- Fixed APR: 2.99% – 7.99%
- Variable APR: 1.74% – 7.99%
3. Citizens Bank Student Loan Refinance Rates: Best Student Loan Refinance Company For Available Discounts
Based on your education degree, Citizens bank can provide up to $750k for refinancing student loans. Moreover, there are a lot of discounts that they give based on many factors, including your loyalty, automatic payment, etc. With these discounts, the interest rate can get reduced by 0.5%.
- Credit Score: 650
- Loan Amount: $10k – $750k
- Fixed APR: 2.99% – 8.63%
- Variable APR: 1.99% – 8.38%
4. Splash Financial Student Loan Refinance Rates: Best Student Loan Refinance Company For Low Rates
Splash is particularly known for its low rates when it comes to student loan refinancing. However, you need to have a four-year higher education degree and a good credit score to qualify.
- Credit Score: 650-660
- Loan Amount: $25k – $500k
- Fixed APR: 1.99% – 8.27%
- Variable APR: 1.74% – 8.27%
5. College Ave Student Loan Refinance Rates: Best Student Loan Refinance Company For No Fees and Bad Credit
The best thing about College Ave is that you don’t have to pay any fees, except for a late fee. Although the prequalification takes less time, the starting interest rates are higher than others.
- Credit Score: Undisclosed
- Loan Amount: $5k – $300k
- Fixed APR: 3.49% – 6.74%
- Variable APR: 3.44% – 6.64%
Now that we have covered everything that you need to know about student loan refinancing, it is now your task to go over your priorities and do your student loan refinance rates compare to make an informed decision. Moreover, you should keep in mind that the lenders do not start paying off your student debt immediately. In that case, pay any due loan payment to avoid late fees.
How To Apply To Refinance Student Loans In 2022?
1. As already mentioned before, refinancing should start with researching. Start with your own credentials such as existing debt and credit score.
2. Based on your own financial needs, compare the rates of various lenders and select the one that suits you best.
3. Now submit an official loan application. At this stage, along with a credit inquiry about you and your consigner, if any, they will ask for your ID, existing loan statements, educational credentials, and employment proof.
4. Finally, if you get approved, you confirm the application by signing the necessary documents and you are good to go.
Will Wells Fargo’s student loan refinance rates still work in 2022?
Student loans are no longer provided by Wells Fargo. After January 28, 2021, Wells Fargo ceased providing private student loans and refinancing student loans. Wells Fargo will no longer handle private or refinancing loans since it is selling and transferring all current student loans.
What are current student loan refinance rates in 2022?
According to our research, All new federal direct undergraduate student loan interest rates are now 4.99%, up from 3.73% in 2021–2022 Rates for unsubsidized direct graduate student loans have increased from 5.28% to 6.54%. Rates on PLUS loans, which are for parents and graduate students, have increased from 6.28% to 7.54%.
How does the student loan refinance estimator work?
It becomes easier with the estimator to calculate refinance student loan interest rates. Use the estimator to determine how much you could save by refinancing student loans and to determine your new monthly payment and interest charges. Below is an example where you can see how the student loan refinance estimator works: