Sallie Mae is a loan company well known by American students. If you are one of them, you might have thought about refinancing your loan in order to get lower interest rates. While this might sound like a good idea, Sallie Mae does not offer refinancing for student loans. Despite these unfortunate conditions, there might still be a chance for you.

How does refinancing work?

Studen loan refinancing happens when you take another loan in order to pay your student loans. Doing this might help you qualify for a better interest rate. This happens because your credit score is improved compared to the moment when you took out your student loans.

Refinancing your private student loan will help you reduce your monthly payments, in some cases by over $250 a month (source). Your payments will be diminished because you are extending the term of your loan.

Another advantage is the fact that you can save money over the life of a loan. On average, a borrower can save over $16000.

Start with your credit score

If you want to refinance your student loan, you should start by checking your credit score. In order to qualify for refinancing you will need to meet specific criteria. In most cases, you will need to have a good credit score, which means that it should be somewhere above 680. Loaners will also look for other things such as your current employment situation.

Your credit score is essential because it will also determine your future interest rate. That is the reason why you should try to improve your score before you refinance your private student loans.

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