Your student loan debt likely consists of a bunch, maybe even dozens, of smaller loans. There are different interest rates, minimum payments for each, and you might even have a couple of different student loan servicers. To save you money and to simplify your payment, refinancing your student loans can be a viable option, and Credible is an online marketplace to help you find the best lender.
Refinancing your student loans is a way to roll your individual loans together, then borrowing one larger loan to pay off all of your smaller ones.
The benefit to refinancing your student loans is that you can knock out anything with a high-interest rate, and that’s where you really save money. For example, if you have several loans equalling $50,000 with rates around 6%, finding a new lender through Credible at a rate of 4% can save you over $5,000 in interest over the course of your loan.
Sounds awesome, right?
But, student loan refinancing isn’t for everyone, like if you have federal loans or don’t have a steady job (more on this a little farther down).
What is Credible?
Credible is a student loan refinancing marketplace, not a lender. Credible is where you will find that larger loan to pay off the smaller ones. They work with a number of banks to find you the best rates, like Citizens Bank, MEFA, PenFed, Advantage Education Loans, College Avenue Student Loans, and more.
In addition to refinancing student loans, Credible also offers student loans, mortgages, mortgage refinancing, and personal loans.
Credible is one of several student loan refinancing marketplaces out there, but what makes Credible standout is that after a short survey, think two minutes, they are able to provide you with personalized and prequalified rates. And, this part of the process will not affect your credit score.
To learn more about their lenders, what they do, and to take the survey, click on my exclusive M$M Credible link.
A little side notes here, but Credible is the only student loan refinancer I work with. I take the business of offering this kind of advice very, very seriously. Not all student loan refinancers are the same, and some have a less than stellar reputation. Credible isn’t one of those companies, and that’s why I’m excited to tell you about them.
How the Credible student loan refinancing marketplace works
1. Fill out a short application
Credible prides themselves on giving you rates in around two minutes, and really filling out the pre-qualification survey is just that quick. You will be asked about your finances, education, and the amount you are wanting to refinance. To make it easier, gather your information before you get started.
During this step, Credible will need to check your credit to see what kind of rates they can find for you. This is a soft pull on your credit, which does not affect your credit score.
2. Compare rates and lenders
After filling out the application, Credible will give you a list of lenders, rates, terms, and eligible degrees. This is where you shop around to find which loan best fits your needs.
Probably the biggest things you’ll need to pay attention to in this step are whether you want a fixed or variable rate and the length of your loan period.
- Fixed rates are usually a little higher, but you’re protected if interest rates go up too much during your repayment period.
- Variable rates are typically lower and riskier, but they can save you money when you know you can pay your loan off quickly.
- Loan terms can vary from 5-25 years depending on the lender. A longer term means smaller monthly payments and more interest. A shorter term means higher monthly payments and less interest.
You can also apply and adjust filters here to get a more specific look at your refinancing options.
It would also be very, very wise to research your top lender options before applying to refinance your student loans with one of them.
3. Choose your lender and apply for refinancing
Once you have chosen your lender, you will stay on Credible’s website to fill out a more detailed application that digs into your finances and student loans even more. This is also where the lender will run a hard credit check to finalize your approval (this will ding your credit score by a few points, but your score can rebound pretty quickly).
After you’ve done all of that, your new student loan lender will contact you with the rest of the details of your loan.
M$M tip: Read everything you need to know about refinancing your student loans at Refinancing Student Loans: The Ultimate Guide.
When refinancing your student loans is a good idea
Here’s the thing, student loan refinancing isn’t for everyone. If you have federal student loans, you will lose any protections – forbearance, deferment, extended payment plans, etc. – during the refinancing process. Remember, refinancing is borrowing a larger loan to pay off your smaller ones. So technically, you would no longer be in the student loan business with the federal government which is who offers those protections.
Refinancing your student loans with Credible is ideal if you have private student loans, which can have higher rates and no protections to begin with. And, refinancing is still an option for federal student loans as long as you know you can make your monthly payments.
That’s the key… as long as you can afford your payments, refinancing your student loans through Credible’s marketplace can save you a lot of money.
M$M tip: If you need some motivation to destroy your student loan debt, here are 13 people who crushed over $600,000 in student loan debt.
Frequently asked questions about refinancing your student loans with Credible
Do I need to have a credit score?
Yes, and actually having student loans and paying them on time can help you build your credit score. I managed to work up to 800, thanks to on-time student loan payments. A good credit score will help you qualify for the best rates, and having a score in the mid-600s is needed to refinance.
Will applying for Credible hurt my credit score?
During the preapproval process, Credible runs a soft credit check. It’s basically the information you see when you view your own credit score through a budgeting app like Mint – a soft credit check will not hurt your score.
To finalize things and lock in a rate, your new lender will run a hard credit check. This will show up on your credit report and basically lets future lenders know that you were inquiring about a new line of credit. It has a pretty negligible effect on your score, but that ding can make a difference if you’re also about to open a new credit card, apply for a mortgage, etc.
Can I use a cosigner on my refi?
Yes, and some people with lower credit scores will need a cosigner to qualify for the best rates or qualify at all. When you are shopping for loans through Credible, there is a tool that lets you see what adding a cosigner can do for your refinance.
The only warning is that a cosigner is bearing the burden if you are late on your payments, become delinquent, or even default. If you can’t pay your loan, your cosigner becomes responsible… and so does their credit. You might want to look into other repayment options before asking someone to cosign.
How much does it cost to use Credible for student loan refinancing?
Credible is 100% free to use. They’re just the marketplace and lenders pay them a “finder’s fee” for your business.
Are there minimum requirements to use Credible?
Because Credible is just a platform for looking at refinancing options, technically no. However, to refinance a student loan, you will need to be at least 18 years old and have at least $5,000 in student loans.
Do I have to refinance all of my student loans?
Nope. Some people only use Credible for their private loans so they can keep the protections in place with their federal ones.
How much can I save refinancing my student loans with Credible?
Sorry, no easy answer here, but ideally you will save money when you refinance your student loans. You could save a few hundred dollars or several thousand – it depends on your total amount of student loans, your interest rates, and loan term.
The best refinance are ones that save you the most money, but here’s an example of how a refinance can cost you more:
- You currently have $40,000 in student loans at an average rate of 6%. You are on a standard 10-year repayment plan. Your monthly payment is around $440, and you will pay around $13,300 in interest charges.
- You refinance this $40,000n at a rate of 4%, but you choose a 25-year term. Your monthly payment is now just over $200 a month, BUT you will pay over $23,000 in interest.
Don’t do this.
If you are struggling to make your monthly payment and are considering an option like what I just explained, please find a side hustle. My favorite is running Facebook ads for small businesses. It can bring in an additional $1,000-$1,500 per month. Learn more at Facebook Side Hustle Course.
What if I’m in forbearance or deferment?
It’s possible that you won’t be able to refinance your student loans through Credible, but you’ll find out during their short, two-minute survey. Remember, there’s no cost or hard credit pull to look into your refinancing options.
Can I pay more than my minimum payment when I refinance my student loans?
Heck yeah! Just like most loans, you can always make extra or overpayments. Actually, refinancing can make it a little easier because you don’t have to pick a loan to direct it to.
Paying more than the minimum payment is a great way to save money and reduce the life of your loan. Contact your lender first so you know how to overpay.
Can I refinance more than once?
Sure, but first think about why you’re refinancing. Is it because rates have gone down and you want to save even more? Refinancing again in this situation would make sense.
But, if you’re refinancing again for a longer loan term because you can’t afford your payments, then that’s another thing entirely, especially if the rates are now higher. Have you tried to cut your monthly household expenses? Have you looked into a side hustle?
Final thoughts on refinancing your student loans with Credible
Overall, Credible is a transparent company that simplifies the student loan refinancing process.
Refinancing your student loans can save you money over the course of your loan, but really spend some time looking over your finances to see if it makes sense for you. If it doesn’t make sense, don’t do it.
If you’re curious about what rates you can get, take two minutes to see if Credible is worthy of earning your business.