How To Refinance Student Loans

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  • How To Refinance Student Loans
Author: Joseph Reinke, CFA

In this article, I detail how to refinance student loans so you can become familiar with the process. In doing so, you’ll increase the likelihood of having a good experience from beginning to end.

The good news is you don’t have to go through the refinance process by yourself. If you need help, check out our free student loan refinance service.

Table of Contents

  1. Step 1: How To Gather Your Paperwork
  2. Step 2: How To Do Your Research
  3. Step 3: How To Get Pre-Approved
  4. Step 4: How To Get Verified
  5. Step 5: How To Get Approved & Funded

Step One: How To Gather Your Paperwork

The first step is to answer the question Should I refinance my student loans?  If you decide the answer is yes or maybe, that is when you begin with step 1 of how to refinance your student loans…

Most recent graduates usually have more than one loan so it is critical to get into the next level of details.  For example, you have to determine which student loans you should refinance based on your existing interest rates, balances, terms etc…

Unlike what the student loan industry would like you to believe, you do not have to refinance all your loans. You can pick and choose which loans to refinance and which ones to leave “as is”.  This is one of the myths we discuss in our article 8 Student Loan Refinancing Myths.

In order to determine which loans you might refinance, you have to know what your interest rates are, which ones are private versus federal, fixed versus variable rate, and which ones may be eligible for forgiveness based on service time (if you qualify for public service loan forgiveness).

In summary, step one is to write down each of your loans with the details above or input them into your FitBUX profile by becoming a free FitBUX Member.

Step Two: How To Do Your Research

With your loan details in hand, you then have to do some market research.  This entails researching which companies may refinance your loan and the types of loans they offer.

During this research, you should determine what the current market rates are and the length of the loan that is right for you.  This can be a very time consuming process but it doesn’t have to be.

Here are 3 ways FitBUX can make this easier for you:

  1. We’ve put together a list of the best student loan refinance companies that also contain review for each company.  These reviews will help you asses each company’s pros and cons based on your unique situation.
  2. We know that determining what is right can be really confusing. This is why we have created our free student loan refinance service whereby our expert FitBUX Coaches help you do the research.
  3. We put together a detailed description of the three most common mistakes people make when refinancing. Check it out…

At this point, if it doesn’t make sense to refinance then you can stop the refinance process.  Many people skip these initial 2 steps and waste weeks and even months before they figure out that it doesn’t make since for them to refinance.

FitBUX Student Loan Refinance Give Away

Step Three: How To Get Pre-Approved

This step requires you to fill out a rate check application at each lender. This step will not hurt your credit because its a soft credit inquiry.  However, be sure not to submit the application until you know that its the loan you want to go with. You should be able to complete each rate check in 2 – 3 minutes.

When doing the quick application, the more accurate information you provide, the less the loan terms will change between pre-approval and closing.  However, do not get too excited yet.  As I just mentioned, your “pre-approval” is not the final loan, i.e. your terms can still change.

As an FYI, FitBUX is in the process of automating this process so you don’t have to fill out a bunch of applications at each company but that technology won’t be ready until 2022.

For now, if you have built your free FitBUX profile, you can log into it and select “My Solutions” from the left hand menu. Then click the second option “Student Loan Refinance.”

There is a list of our 10 student loan refinance partners. Click get rate under the company’s logo and you’ll be taken to their quick application page.  

Step Four: How To Get Verified

Step four of the refinance process is verification.  This is where the refinance process can start to drag on but you can make it speed up by completing steps one and two above.

In this step, the lender needs to verify information such as income, graduation, etc…  Many companies are now using technology for some of the necessary verification steps.  However, there is some data only you can supply   Of course, the longer you delay getting the info into the hands of the lender, the longer the process will be delayed.

One key item you will need for verification is the loan-payoff amount.  For student loans, you can obtain this from your current lender.  However, many lenders do not provide this information easily.  If you need help getting this, your FitBUX Coach can help you as part of our free refinance service.

Step Five: How To Get Approved & Funded

Once you complete the verification step, the lender will then make a decision and choose to fund you loan (or not…).  If you are approved  and sign the relevant paperwork, the new lender will be ready to pay-off your existing loan and will fund your new loan.  However, payments do not begin right away.

After you sign the documents, the student loan refinance company has to give you a 3 day cancelation policy. This means you have three business days to cancel this new loan.

After the 3 days, the loan is fully processed and the new lender pays off the old lender. Your first payment will be due 30 – 45 days after you sign the documents.

By Joseph Reinke, CFA, Founder of FitBUX

Joseph Reinke, CFA

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About the Author

Joseph Reinke is a Chartered Financial Analyst (CFA) Charter Holder and founder of FitBUX which has helped over 14,000 young professionals on their journey to financial freedom. Joseph has been personally investing since he was 12 years old.

In addition, he has experience in student loans, mortgages, wealth management, investment banking, valuation, stock trading, and option trading. He has been on 100s of podcast and has been invited to 100s of universities to discuss financial planning with their soon to be graduates.

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