Refinancing your MBA loan could save you money by lowering your interest rate, and help you pay off your debt faster. We’ve evaluated the best refinancing options based on rates, terms, process, fees, and overall quality.
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 MBA student loans?
Refinancing your MBA loan can be worth it based on the following:
Better interest rates: The main reason for refinancing MBA student loans is to get better interest rates. A lower interest rate will help you save money on monthly payments and reduce the total interest you pay over the life of your loan. This can be a significant amount of money depending on how much you owe and how long it takes you to repay your loan.
Incentive and benefits: You should refinance MBA student loans if your current lender doesn’t offer some type of incentive or benefit that other lenders have. For example, some lenders may offer a lower rate but don’t have special programs or incentives like payment deferrals or late fees waived after one year of on-time payments. If this applies to your current situation, it will make sense to look elsewhere for refinancing options.
One monthly payment to manage: If you have multiple loans that are refinanced, then you may end up paying more in interest over time. Each loan will have its own interest rate and term length, so the longer it takes to pay off all of your loans, the more interest you will pay over time. By consolidating into one loan, you’ll only have to worry about one term and its interest rate. Moreover, it will be easier to track how much money you’ve paid over time.
Co-signer release: If your parents co-signed on your original loan agreement, they might not be able to receive co-signer release until after you graduate and find employment (unless they co-sign on another loan). By refinancing with the lender before applying for a new loan as an alumnus, your parents will be able to apply for co-signer release immediately upon your graduation instead of waiting until later down the road when you’ve built up credit.
How much can you save by refinancing MBA loans?
An MBA degree can be expensive, but the benefits are well worth it. Refinancing can help you save money and pay off your debt faster if you’re currently paying off your student loans. Refinancing your MBA loans means that you will be able to lower your monthly payments and get a better interest rate on loans. In many cases, this can mean saving thousands of dollars over the life of the loan.
The average savings from refinancing a student loan is $272 per month and $13,940 overall.
What are the requirements to refinance an MBA student loan?
To refinance an MBA student loan, the following is required:
Excellent credit: To refinance your MBA student loan, you will need excellent score. If you’re unsure of what your credit score is, you can check on Credit Karma or Experian. Having good credit when applying for refinancing is essential, and a low credit score can result in higher interest rates and fees. If you have bad credit now but want to improve it, consider paying off past debts or adding positive information to your report.
Steady income: You should have a steady income when applying for a refinance as it will determine the amount of money available for your monthly payment and how much of the original balance will be paid off each month. If your income is variable or unstable (i.e. self-employed), make sure your lender knows about this before moving forward with the application process.
Be a U.S. Citizen: To qualify for federal student loans, you must be a U.S. citizen or permanent resident at least 18 years of age.
Is refinancing student loans better than consolidation?
Refinancing is a fantastic option if you’re experiencing financial difficulties and want to save money. A refinance can help you pay off your debt faster and reduce the interest rate on your student loans. It can also be beneficial if you have a high-interest rate and have been making payments for several years.
Conversely, consolidation is usually a good idea if you would like to keep federal loan benefits (i.e. income-driven repayment plans) because it allows borrowers to combine multiple loans into one single loan with one monthly payment. This can help simplify your finances by reducing the number of payments that you have to make.
Additionally, the decision between refinancing or consolidation depends on several factors, such as your current interest rate, credit score, and how long you’ve been making payments on your loans.
When you refinance student loans, you’re taking out a new loan to pay off your existing ones. The new loan will have different terms — most likely a lower interest rate and shorter repayment period than what you currently have.
If you consolidate student loans, they will be combined into one new loan with a single repayment schedule and interest rate.
How to choose the best MBA student loan refinancing options
Here are some tips for making sure you choose the best MBA student loan refinancing options:
Compare multiple lenders to find the best deal: You should first compare multiple lenders’ rates and terms to find the best options. It’s not uncommon for lenders to vary their offer by as much as 0.5% (sometimes more) based on your credit score, so it pays to compare multiple options from reputable lenders.
Consider the timing for refinancing: It can be beneficial to refinance your student loan right after graduation, especially if you have a co-signer so they can be released from your contract. However, it could also work in your favor if you wait a few years to refinance as you move up the pay scale in your career. Some students go on to become entrepreneurs and are able to pay off their student loan in large sums instead of years of student loan payments. Weigh out what works best for you and in which direction you think your career will go. Also keep in mind what works best for your cash flow.
Browse other benefits along with refinancing: Along with refinancing your loan you will want to consider the perks that come along with it. Weigh out what benefits the lender offers you such as flexible repayment terms, an autopay discount, and/or a formal forbearance policy. Compare each lender’s benefits and determine what is most fitting for you.
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