When to Consider Refinancing Student Loans

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when to refinance student loans

Are you facing high interest rates on student loans with months (or years) to go before you have to start paying them back? You may wonder if there’s any way to refinance to a new lower rate now and still delay payments until after college. (Also, be sure to check out MMCCU’s Student Financial Resources page HERE.)

MMCCU works with ISL Education Lending to offer private loans to help you pay for college as well as refinance existing student loans. ISL Education Lending is a nonprofit organization with decades of student loan experience offering lower-priced loans.* ISL Education Lending offers fixed rates that may be lower than what you have from your current lender. Now is the time to refinance to a lower fixed rate you can rely on for the future.

“Today, students and recent graduates are facing higher student loan balances, so higher interest rates can have a detrimental impact on the total amount they pay for their years in college,” said MMCCU President David Murphy. “With the ISL Student Loan refinance program, any reduction in term and/or interest rate they can generate can have big returns for members now and in the future.”

You should consider refinancing while in college if you want to:

    • Get a lower interest rate, which means less interest to repay later.

There are several reasons — such as economic changes, credit score changes or simply finding a lender that offers a better rate — why your current private student loan rates could be higher than a new refinance rate would be. If you can lower your interest rate today, less interest will accrue on your loans before you have to start making payments.

If your existing private student loans carry a variable interest rate, refinancing to a fixed interest rate can provide the assurance of a set rate regardless of market conditions.

ISL Education Lending offers a quick pre-qualification tool that lets you or your cosigners get your rate, without impacting your credit score, before you apply. Note: If you have a cosigner on your current loans, you’ll likely need a cosigner on your refinance loan to meet the debt-to-income ratio underwriting criteria. Even if you successfully pre-qualify based on your credit score, including a cosigner may be necessary to refinance.

    • Continue to defer repayment until after college.

With the Reset Refinance Loan for In-School Borrowers, repayment is deferred until you’re out of college. This is a special feature unique to this specific loan as most lenders require payments to begin immediately after refinancing. If you’re still enrolled in college, refinancing without the option to defer could cause a financial hardship.

You should not consider refinancing certain student loans while still in school, such as:

    • Federal Direct Subsidized and Unsubsidized Loans.

Generally these federal loans carry a lower rate and offer certain benefits that would be lost with a private refinancing loan. In addition, the U.S. Department of Education pays the interest on federal Direct Subsidized Loans while a student is attending school, and retaining that subsidy reduces the overall amount of debt to repay later.

Get started today

If you’re ready to refinance your student loans after considering these options, contact MMCCU today!

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*Marshfield Medical Center Credit Union is compensated by ISL Education Lending for the referral of student loan customers.

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