Here's How to Refinance Student Loans Without a Degree - Student Loan Gal (2024)

FAQs

Can I refinance a student loan without a degree? ›

Several lenders will refinance student loans if you haven't earned a degree. If you're making payments on time and have a good credit score and a stable job, you may find that you can refinance your loans at a lower interest rate. That could reduce your payments or allow you to pay off the loans more quickly.

Your student loans stay with you even if you leave school, and your loans will enter repayment. While they can't be erased, student loan refinancing can be one option for better managing your debt.

In general, you'll need to have a credit score in the mid- to high 600s, a debt-to-income ratio of less than 43 percent and a source of steady income to refinance a student loan, but the requirements vary by lender. Getting pre-qualified is an excellent way to see if you're eligible for student loan refinancing.

When you shouldn't refinance student loans. You generally can't or shouldn't refinance if: You have federal loans and could see a drop in income. If there's a chance your income could decrease, don't refinance federal student loans.

Nondegree students typically don't qualify for federal student loans. To qualify, you need to participate in an eligible certificate program and also attend school at least half-time. You might also be eligible if you are: Completing prerequisite coursework required for entrance to a degree program.

Just about every type of federal student loan qualifies for forgiveness, including direct subsidized or unsubsidized loans as well as graduate or parent PLUS loans. The forgiveness plan does not make a distinction between borrowers who graduated from college and those who didn't.

In most cases, the Fair Credit Reporting Act (FCRA) allows derogatory items like defaulted debts or collection accounts to stay on your credit report for up to seven years. Because federal student loans do not have a statute of limitations, these negative accounts can remain on your credit report indefinitely.

Your loan can be discharged only under specific circ*mstances, such as school closure, a school's false certification of your eligibility to receive a loan, a school's failure to pay a required loan refund, or because of total and permanent disability, bankruptcy, identity theft, or death.

Payment and Credit History

Credit isn't the only factor in whether you get approved or denied. The lender will also pay special attention to your payment and credit history. If you've missed several payments in the past or made a late payment, student loan refinance lenders are more likely to reject your application.

What is a good student loan refinance rate? ›

Refinancing can be a rigorous process that requires a home appraisal, documentation of your income and assets, a review of your credit history and your debt-to-income ratio. Falling short of a lender's requirements in just one of these areas could cause your refinance application to be rejected.

Alternatively, you can provide documentation, such as your most recent tax return. If you didn't file taxes, other acceptable income information can include pay stubs or a letter from your employer. After you submit your application, it will be processed over the next few weeks.

If you have multiple loans, a partial refinance is straightforward: Simply choose the individual ones to refi. It could be those with the largest balances or highest interest rates, depending on your repayment goals. If you have a single loan, you'll want to ask the lender to not pay off the entire debt.

It can take a few days to a few weeks for that process to be completed, so keep making payments on your current debt until you receive a notification that the loan was disbursed. If you refinance your student loan with ELFI, you'll have a Student Loan Advisor who will be your guide throughout the entire process.

Lenders want to know that you can afford the payments on your refinanced student loans. Most require their applicants to provide pay stubs or other proof of consistent income. You must be employed in the U.S., and your income must be in U.S. dollars. Usually, the higher your income, the better rate you'll qualify for.

Generally, you're eligible to consolidate any time after you graduate, leave school, or drop below half-time enrollment.

You can refinance and defer your loan payments until after you graduate, or you can start making payments immediately and qualify for a lower rate. Discover. You can refinance at any time while you're in school, but you'll need to start making payments within 30 to 45 days after the new loan is disbursed.

One strategy you might consider to help better manage student loan debt while jobless is student loan refinancing. However, you'll have to qualify — and that isn't necessarily easy to do when you're on the sidelines, job-wise.