Students Loans
May 22, 2019

How To Predict Whether You Will Qualify for Student Loan Refinancing

Written By Mary Beth Eastman
Last updated January 25, 2020

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Student loan debt is one of the largest debts many people will face in their lifetime. However, many have also learned that they can significantly reduce the amount of debt they owe and pay back their loans quicker through student loan financing.

Refinancing your student loans enables you to consolidate any current student loans you have into one loan at a lower interest rate. Before you hire a student loan refinancing company, you need to determine whether or not you will qualify.

As with any loan, lenders carefully and thoroughly review your financial situation and your creditworthiness in order to make a determination as to whether you qualify for refinancing. So the first thing you need to focus on is ensuring you have a good credit score.

Raise Your Credit Score

Make payments on time and lower your debt if possible. This will help to raise your credit score. Typically, anything above 650 will be okay. However, lenders definitely prefer a score of 700 or higher.

You can also check your credit report to see if there are any errors. Sometimes there are errors or old issues that have since been resolved, but haven’t been removed from the credit report yet. Fixing these errors can raise your credit score.

Proof of Income

Being able to show proof of income that is stable and recurring, ensuring you can make your monthly payments, will also help you to qualify for student loan refinancing.

Amount of Debt

The less other debts you have (credit cards, mortgages, auto loan payments), the better your chances of qualifying for student loan refinancing. The amount of debt you have figures into your debt to income ratio. Too much monthly debt in comparison to your monthly income can be a red flag for many lenders.

If you have a few different debts, such as multiple credit cards, consider consolidating them to make them easier to pay off. Debt consolidation companies that are reputable can help you streamline your debts and pay them off faster. Take a look at our National Debt Relief reviews to see the most reputable companies compared against each other.

Get a Cosigner

If you are still worried you might not meet the criteria to qualify for student loan refinancing, you can always seek a qualified co-signer. This can be a relative, a spouse, or even a close friend. And, with student loan refinancing, there is often little risk to the co-signer because many lenders offer a co-signer release that releases them of financial responsibility if certain qualifications are met.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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