Refinancing your student loan can lower your monthly payment and potentially save you thousands of dollars on interest. While the process isn’t difficult, refinancing college loans does require some research on your part in order to get the most benefit. Here’s what you need to do:
Preparation is Key
Your credit score is a major factor that lenders consider when you apply to refinance your student loans. Since earning your degree, you have probably been earning a salary and consistently making payments on your loans and credit cards. These can contribute to a good credit score. You should check your credit report to make sure it accurately reflects your creditworthiness and that all the reported information is correct. Here’s how:
- Get your credit report : Go to AnnualCreditReport.com or call (877) 322-8228 for a free copy of your credit report from each of the three major credit reporting agencies: Equifax®, Experian® and TransUnion®. You are entitled to one free credit report each year.
- Correct any mistakes: Check the reports to make sure all information is correct and up to date. If you need to correct any information, contact the credit reporting agency in writing through certified mail and ask that your report be corrected. Along with your letter, include any documents that support the correction. Be sure to keep copies of your letter and documentation.
- Improve your credit score: If your credit score is 660 or higher, you are likely a good candidate for a student loan refinance. If your credit score is less than that, you can help improve it by staying current on all your bills, including credit cards and student loans, and making sure your credit card balances are below 30% of their limit.
Get These Documents Together
Refinancing your student loans is pretty easy – most of the paperwork can be done online. Before you apply, make sure you have these documents available to upload as part of the application process:
- Loan statements: You will need the most recent loan statement for each loan that you want to refinance. Each statement must clearly show the loan servicer name and address, loan balance and interest rate.
- Documentation of address: You will need a copy of your driver’s license, passport or bank statement to verify your address.
- Income verification: You will need your most recent pay stub and your most recent tax return.
- Proof of citizenship: You will need your Social Security number or government ID number.
Ask These Questions Before You Sign
Before you commit to refinancing your student loans with any lender, make sure you find out:
- What day your first payment is due
- How much you’ll owe each month
- What your new interest rate will be
- How long your repayment term will be
- How to pay more than the minimum payment each month
- What the final payoff amount will be
- What happens if you lose your job or can’t make payments
- How to get in touch with customer service
In addition, make sure you ask about discounts. For example, if you refinance your student loans with USC Credit Union, you get an extra discount when you set up automatic payments through AutoPay.
Refinance With USC Credit Union
If you’re looking for a fast, easy process and better rate, turn to us. Within a few weeks, eligible applicants can start enjoying a much more affordable loan payment or even a faster timeline for getting out of debt. Check out our free guide to learn how you can quickly and easily refinance your student loans.
Not a member? Not a problem. If you live, work, worship or go to school in the city of Los Angeles or Orange County, you are eligible for membership in USC Credit Union. Learn more.