Student Loan Refinancing for Struggling Borrowers

Refinancing your student loan can be a smart financial move if it provides one or more of the following benefits:

1. Customized payments: A new loan can offer a repayment plan that fits your monthly budget.
2. Decreased total cost: Refinancing can help you secure a lower rate, which could mean thousands of dollars in interest saved over the term of the loan.
3. Lower interest rate: Refinancing from a variable-rate loan to a fixed-interest loan means your monthly payment won't change. We offer low fixed interest rates ranging from 0.1-5.99% APR interest rates, some of the best student loan interest rates available to qualified applicants. 

Eligibility Requirements from Traditional Lenders:

Typically, traditional lenders will determine eligibility and build a refinance rate based on a borrower's financial profile.

This can include:

• Credit score: Traditional lenders place a large emphasis on your credit score and typically require a minimum credit score of 650.
• Credit history: A history of your credit usage, bill payment history and length of credit (how long you've used or maintained a line of credit).
• Stable income: Consistent income demonstrates the ability to make loan payments.
• Debt-to-income (DTI) ratio: Your monthly income before taxes (also called gross), compared against your monthly debts.
• Loan amount: The size of the loan you want to refinance.
• Degree status: The education levels you have completed.
• U.S. citizen/permanent resident status
• Loan type: Whether your loan is private or federal.

Traditional lenders may require a minimum credit score of 650 and a good debt-to-income ratio. As a general rule, a good debt-to-income ratio is 35%. For example, if someone earns $100,000 per year, their total debt should ideally be no more than $35,000.

The factors listed above help a lender determine if a borrower will be able to meet their loan's payment obligations.

Yrefy's Eligibility Requirements:

Yrefy's eligibility requirements are unique among lenders, which is why we want to quickly highlight the differences.

We know that you are more than a number, and our approach to eligibility does not require a minimum credit score to get a low fixed student loan interest rate. In fact, many of our current borrowers were rejected by other lenders! Typically, our borrowers are in delinquency or default with their current private student loans. Most traditional lenders will immediately reject borrowers in this status.

What Yrefy takes into consideration to refinance your student loan (but not limited to):

• No minimum credit score
• Credit history
• Stable income
• Debt-to-income (DTI) ratio
• Loan amount
• U.S. citizen/permanent resident status
• Loan type: Yrefy only refinances private student loans.

We take a holistic approach to eligibility, and can help struggling borrowers reduce their debt, create repayment plans that fit their budget, and save money through student loan refinancing.

Before we answer this question, let's define what a cosigner is.

For any loan, a cosigner is a person who agrees to take legal responsibility for repaying it if the primary borrower fails to make the payments. Often, cosigners are parents, family members, or close friends.

During the loan application process, cosigners may need to provide information such as income and credit history, which can help the borrower qualify for or secure a lower interest rate.

Why is a Cosigner Necessary?

Whether a cosigner is required to refinance a loan is decided on a case-by-case basis, as each student loan refinance situation is unique. Lenders may require a cosigner if they feel the borrower doesn't meet certain requirements, such as having a strong enough credit history, income, or debt-to-income ratio.

Key Benefits to Consider

1. Lower Interest Rates: By securing a lower rate, borrowers can reduce the total interest paid over the life of the loan.
2. Consolidation: Refinancing provides the convenience of a single monthly payment by consolidating multiple loans.
3. Flexible Repayment Terms: Borrowers can choose new loan terms that better suit their financial situation.

Refinancing a student loan can lower monthly payments, reduce interest costs, and relieve pressure from cosigners. However, every student loan is unique, and every borrower's financial situation is different.

In general, refinancing is worth considering if it meets one or more of the conditions discussed earlier—provided you're not giving up federal loan benefits you still want or need.

If a borrower is struggling with payments or has defaulted, then additional options, including refinancing, should be considered.

Refinance Frequency

You may be wondering, "Can't I just keep refinancing my student loan to get better rates or terms?"

Student loans can be refinanced more than once, but there are some financial caveats to consider.

Each loan refinance requires qualifications, so a borrower could refinance as often as they qualify, but it may not always make financial sense. Remember, there can be upfront costs to refinancing which may take time to be offset by resulting savings. Most experts suggest waiting at least 12 months before refinancing a student loan, which would allow for meaningful interest savings to outweigh the costs.

Thankfully, the refinancing process is fairly straightforward.

1. Complete an online application or call us: We offer an online application or you can call us, which can usually be completed in just a few minutes. The application may request personal information such as your name, address and Social Security number, along with current income levels, loan details, and consent to perform a credit check.
2. Wait for lender review: Following submission, lenders will review your information and prepare an offer. Typically, you will receive a phone call from one of our loan specialists, and if approved, a formal offer will be sent, typically via email.
3. Accept or reject the offer: Once approved, you can choose whether to accept the lender's offer. If you accept, the new lender will pay off your existing loan. You are under no obligation to accept the offer.
4. Begin payments with your new lender: Moving forward, all payments are made to the new lender under the agreed terms.

At Yrefy, we offer unique advantages that help a broad range of borrowers qualify for student loan refinancing, even those with a credit score below 500. Our benefits include:

1. Low fixed interest rates: Stable rates mean predictable monthly payments.
2. Cosigner release: If you make on-time payments, your cosigner can get released from the loan.
3. Flexible payment plans: We work with your budget.
4. Default loan assistance: We can get you out of default and stop the collection calls.

Yrefy works with borrowers who have defaulted private student loans, and because our rates aren't dependent on credit scores, we can proudly serve borrowers from all financial backgrounds.

These advantages, combined with our competitive interest rates, are why so many borrowers trust Yrefy to manage their student loan refinance.