Law school is costly and can leave college students drowning in loan debt. The average law graduate leaves school with $130,000 in student loans. Luckily, options allow you to refinance your law school loans to reduce your payments and interest rates.
First Tech Federal Credit Union provides competitive rates, but you'll require a membership to receive those benefits. To become a member, you'll have to meet some strict requirements.
UNDERGRADUATE LOANS: Fixed rates from 3.47% to 12.55% annual percentage rate ("APR") (with autopay), variable rates from 2.26% to 13.54 % APR (with autopay). GRADUATE LOANS: Fixed rates from 4.60% to 12.55% APR (with autopay), variable rates from 2.96% to 13.54% APR (with autopay). PARENT LOANS: Fixed rates from 4.48% to 13.05% APR (with autopay), variable rates from 2.06% to 14.04% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 06/08/2022.
Should you refinance law school loans?
Refinancing law school loans can be appropriate for some people — but not everyone. Here are some reasons where refinancing could be beneficial:
Lower interest rate: If you have good credit, you could qualify for a lower interest rate than what you’re currently paying on your loans. Lenders may offer lower rates because of the income potential from lawyers.
Extended term and payment period:Most consolidations extend the term of the loan and payment period so that fewer payments are due each month, making them easier to manage. This can be especially helpful if you’re having trouble making your monthly payments now.
Save money on interest payments over time:Refinancing can help reduce your monthly payment and eliminate any high-interest private loans. You’ll pay less interest over time if you do lock down a lower rate.
Work in the private sector: Avoid refinancing federal student loans if you work in public service or might want to work in that field because you may be eligible for better law school loan repayment options than refinancing, such as loan forgiveness and loan repayment assistance programs. Private loans don’t qualify for federal repayment programs – a private loan’s main benefit is lower rates.
How to refinance law school loans?
If you’re looking for a way out of your current loan situation, here is how to refinance law school loans:
Have a high credit score: If you have a high credit score, this will help you get approved for a loan because lenders are more confident that you will pay back the loan. The higher your score, the better your chances of getting approved for a loan.
Good employment history and strong income: The other factor that lenders take into account is your employment history and income level. You must have a steady job and enough income to repay their loans without difficulties.
Low debt-to-income ratio: Lenders see this ratio as indicating how much you have left over each month after paying all your bills and loan payments. It’s calculated by taking your monthly debt payments divided by your gross income. If your debt is too high compared to your income, you may be denied.
Shop around: Look for the best loan terms and lowest interest rates. You should also consider a private or alternative lender if you have a high income and good credit or have already exhausted the federal loan options.
Pick a lender and apply: When you find a lender, apply online or over the phone. The lender will run your credit report and approve or deny your application based on your credit score and other factors. If you are approved, they’ll send you an offer letter, which will list all of the details of your loan agreement.
How much could you save when refinancing law school loans?
How much you could save when refinancing your student loans depends on several important factors, including the interest rate and the amount of money you have borrowed.
You could save thousands of dollars when refinancing your law school loan. Here is an example:
Loan amount: $250,000
Months remaining: 120
Interest rate: 5%
Monthly payment: $2,652
Lifetime costs: $318,197
Based on the above scenario, if you refinance at a 3% rate, your monthly payments will drop to $2,414 and your lifetime cost will drop to $289,682. In this case, you’ll save $238 a month and roughly $28,515 over the life of the loan.
Will refinancing hurt your credit score?
Refinancing your student loan will temporarily hurt your credit score from the hard credit pull. However, it can be beneficial in the long run for your credit score as you continue to make payments on time.
Law school student loan consolidation vs. refinancing
Refinancing student loans can help you save money on interest and make monthly payments more manageable. Just keep to note if you refinance a federal student loan, you will no longer qualify for existing or future benefits offered by the federal government. That’s where consolidating might be worth looking into.
Student loan refinancing, It’s about saving money: If your student loan interest rate is higher than the current market rate, it may be worth refinancing to lower your monthly payment.
Student loan consolidation, keep your federal benefits: Consolidation combines all of your federal student loans into a single loan with a new repayment term, interest rate, and monthly payment amount. ou.
Benefits of refinancing law school loans
Refinancing law school loans can have many benefits. Here are just a few:
Lower monthly payments: When you refinance, you’ll likely have the chance to reduce your monthly payments. This can help you pay off your student loans faster and save money in the long run.
Faster repayment: Refinancing a student loan can make it easier to repay your debt in a shorter amount of time.
Extended terms: Refinancing can allow you to pay off your law school debt over a longer period, which can be especially helpful if you have trouble making monthly payments or if you want to keep more cash available for other uses.
How to choose the best law school loan refinancing option
Here are some factors to consider, so you get the best refinancing deal:
Shop around: When you’re looking at refinancing your student loans, it’s important to shop around for the best rate. You can do this by comparing offers from different lenders and weighing the pros and cons of each offer. Some lenders may offer rock bottom interest rates while others offer better terms, such as lower monthly payments or a longer repayment period.
Eligibility requirements: Before applying for a student loan refinancing, ensure you meet all the program eligibility requirements. Many lenders will require you to have good credit or a co-signer before they approve your application.
Repayment terms and conditions: Lenders usually have a standard set of requirements that they offer all applicants, but if you have any specific requests, you’ll have to speak with them, so they can give you advice based on what’s available for your situation.
Customer experience: If you’re considering refinancing your law school debt, talk with your lender about their customer service policies before signing up for a loan. You’ll want to know how responsive they are and if their representatives are friendly and knowledgeable about the process before you commit to working with them.
