Student Loan Refinance | Wright-Patt Credit Union (2024)

FAQs

Is it hard to get approved for student loan refinance? ›

In order to refinance a student loan, lenders tend to require a strong credit score, a stable income, a degree and a decent debt-to-income ratio. Lenders require a minimum refinancing amount, which is the amount you still have to pay on the loan. This is so the lender can make enough interest.

According to Experian, one of the three main credit bureaus, 670 is generally the base credit score that lenders require to be eligible for student loan refinancing. On the FICO Score ranges, scores between 670 and 739 are considered 'good.

Service Credit Union student loan refinancing options are available for private and federal student loans. Parents can also refinance their federal Direct PLUS loans. Variable or fixed-rate refinancing options are available across multiple repayment terms.

You generally can't or shouldn't refinance if: You have federal loans and could see a drop in income. If there's a chance your income could decrease, don't refinance federal student loans. You'll miss out on federal student loan relief options, as well as government programs like income-driven repayment.

Con: You'll lose access to federal student loan protections

If you want to refinance federal student loans, you'll be giving up your right to federal protections that can help you in the event you become unable to pay your loans, such as deferment and forbearance.

ELFI Student Loan Refinance Eligibility Requirements*

Must have earned a Bachelor's degree or higher. Must have a minimum income of $35,000. Must have a minimum credit score of 680. Must have a minimum credit history of 36 months.

Because credit unions are “non-profit” credit unions tend to have lower mortgage interest rates and fewer lender fees. So, if you're shopping for a lender and comparing banks and mortgage brokers, don't forget to see what credit unions have to offer. We think you'll be pleasantly surprised.

Consolidating Student Loans with Bad Credit

If your score is under 650, It is unlikely you will qualify for consolidation from private lenders by yourself. You'll need to find a co-signer with good credit and continue to pay bills on time until your credit score improves. Things get more difficult without a co-signer.

Refinancing: Student loans can be refinanced through a private lender, like a bank or credit union. Refinancing is the process of taking out a new loan to pay off your existing student loans. You can refinance both federal and private student loans.

How many times can you refinance a student loan? ›

Refinancing is essentially just borrowing money via a new loan to pay off an existing lender, so there's no limit to the number of times you can do this. You're only limited by the amount of time you have to research what's best for you. You can refinance all of your student loans at once or just part of what you owe.

When you refinance your student loans, you essentially trade in your existing loan(s) for one new loan through a private lender, such as a bank. In the best-case scenario, refinancing allows a borrower to sign up for a lower interest rate, which can lower their monthly payments and save them money over time.

Not all homeowners are approved for refinancing, though. With home prices and interest rates still high, lenders are careful about who they approve. The rejection rate on mortgage refinance applications increased to 15.5% in 2023 from 9.9% in 2022, according to the Federal Reserve Bank of New York.

The bottom line. If you have bad credit, you may be motivated to refinance your student loans to lower monthly payments. However, many lenders require a minimum credit score in the mid-to-high 600s. You will likely need a cosigner on the loan application to qualify.

You can refinance an FHA loan with the same minimum credit score you needed to get one: 580. However, if you qualify for an FHA streamline refinance, you'll be able to bypass this requirement entirely.

Most lenders require a credit score of 620 to refinance to a conventional loan. FHA loans have a 500 minimum median qualifying credit score. However, most FHA-approved lenders set their own credit limits. Rocket Mortgage^® requires a minimum 580 credit score to qualify.

Among our partner lenders, you'll need a credit score of at least 670 to qualify for a private student loan, although some lenders don't disclose their minimum credit score requirements. However, the higher your score, the better. Most lenders will give you better rates and terms if your score is at least 700.

Fair (580-669) Good (670-739) Very Good (740-799) Excellent (800-850)