Refinancing your student loans can help save you money and it can reduce the amount of time you’ll be paying back your loan. However, as an international student, your options are limited. If you’re considering refinancing your student loans for international students, it’s important to know where you can go and how it can help you.
How Refinancing Student Loans Works
Student loan refinancing is the process of replacing your current student loans with one new one. You can refinance both federal and private student loans, potentially saving you money and time as you pay off your debt.
Student loan refinancing companies like SoFi offer fixed and variable interest rates that can be lower than what you’re currently paying on your student loans.
You can also choose from various student loan repayment options and terms, allowing you to pay off your loans as quickly as your budget allows. As you can guess, the shorter your repayment period, the more you’re likely to save on interest.
Refinancing your student loans can also simplify your repayment plan because you only have one monthly payment instead of several.
As you consider your strategy for paying off your student loan debt, refinancing can be a crucial element in helping you achieve your goal.
Another word you may hear that’s close to refinancing is consolidation. With other loans, the terms are typically synonymous. But with student loans, consolidation is generally associated with the federal direct loan consolidation program, while refinancing is always done through a private lender.
Where to Refinance Student Loans for International Students
Many refinancing companies require you to be a U.S. citizen or permanent resident to be eligible. As a result, it’s not always easy to know where to go, and it can be frustrating to get turned down over and over again because of your international student status.
Fortunately, some companies provide more flexibility for international students. SoFi, for example, considers U.S. citizens, permanent residents, and people who hold a J-1, H-1B, E-2, O-1, or TN visa (as of the date of this article).
If you’re a permanent resident, you’ll need to either have at least two years left until your status expires or you’ve filed an extension. And if you’re a visa holder, you’ll need to have at least two years left before your status expires, or you’ve filed for a renewal or applied for permanent residency.
That said, qualifying based on your citizenship, resident, or visa status doesn’t necessarily mean you qualify based on all criteria. Student loan refinancing lenders also typically have credit and income requirements.
This means that if you don’t have an established credit history—which is not always the case for international students—you may have a tough time getting approved on your own.
If this is your situation, it might be worth getting a student loan co-signer, such as a trusted family member or friend who is a U.S. citizen or permanent resident, to apply with you. Even if you do qualify to refinance your student loans on your own, a co-signer could help you get a lower interest rate.
To help improve your chances of getting approved with more favorable terms, such as a low rate, it’s a good idea to choose a co-signer who has a stellar credit history and a solid income.
Three Things to Consider Before Refinancing Your Student Loans
Refinancing might not be the right option for everyone. Here are three things to think about before you make your decision:
You’ll Lose Federal Student Loan Benefits
If you have federal student loans, you have access to certain benefits to help with repayment, including income-driven repayment plans and student loan forgiveness programs. If you refinance your student loans through a private lender like SoFi, your federal student loans will be paid in full, and you’ll no longer get those benefits.
If you anticipate needing an income-driven repayment plan or are on track for student loan forgiveness, refinancing may not be the best choice. If, however, you don’t plan on taking advantage of those perks, refinancing your loans is worth considering.
You May Not Qualify for a Lower Rate
Your eligibility and interest rate are based on several factors, including your credit history and income. As such, there’s no guarantee you’ll get approved for a lower interest rate than what you’re currently paying, even with a co-signer.
Also, if you already have a relatively low interest rate with your current lender, you may have a hard time getting an even lower rate.
Fortunately, some lenders, including SoFi, allow you to check your rate before you officially apply. This is done with a soft credit check, which doesn’t impact your credit score.
Refinancing Is Just One Piece of the Puzzle
As you think through your student loan repayment strategy, keep in mind that refinancing isn’t the end of the line. Once you complete the process of refinancing your loans, it’s important to still make sure you’re paying down your debt.
For example, consider getting on a budget and looking for ways to put extra cash toward your student loan payments each month.
Also, you could go with a shorter repayment period to save even more time and money on your debt.
The sooner you start the process to refinance your student loans, the more money you could potentially save.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the
FTC’s website on credit.