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Student loan refinancing can be a cost-saving strategy for borrowers with significant amounts of student debt or high-interest loans. Refinancing involves taking out a single, new loan to pay off all or a portion of outstanding student debts to achieve a lower cost of borrowing, a more amenable repayment term, or a consolidation of multiple loan balances.
However, you’ll want to compare offers among the many lenders that provide student loan refinancing solutions. When looking for a lender to help you refinance, it is important to understand what each lender offers in terms of cost of refinancing, total cost of the new loan, repayment terms, and flexibility throughout the process.
Advantage Education Loans, part of Kentucky Higher Education Student Loan Corporation (KHESLC), offers qualified borrowers the chance to refinance student loans through its loan program. Here’s what borrowers need to know.
Refinancing With Advantage Education Loans
Refinancing student debt with Advantage Education Loans follows a similar process to other student loan providers. Borrowers may submit an initial application online, answering questions about their income, credit history, and total student loan balances across federal, private, or both types of debt.
Fortunately, student loan borrowers may decide which loans they want to include in the refinance process, and which they may want to keep elsewhere. Advantage Education Loans then reviews the application to determine if the borrower is a strong candidate for refinancing, based heavily on credit history, score, and income. Borrowers who might not qualify on their own may add a cosigner to the application to strengthen their chance of getting approved.
Once a refinance is approved by the lender, a borrower’s new refinance loan may have an interest rate as low as 3.49%. All interest rates offered on Advantage Education Loans are fixed, unlike other lenders that offer both fixed and variable interest rates. Borrowers can receive up to a 0.5% interest rate reduction for establishing automatic payments from a checking or savings account, which is higher than most other student loan lenders.
Advantage Education Loans offers four repayment terms for student loan refinances: 10, 15, 20, and 25 years. The lender also offers a fixed and a graduated repayment plan, the latter consisting of a reduced initial payment followed by a 10 percent increase in payments every two years.
Borrowers benefit from no loan origination fees, application fees, or funding fees, nor are they subjected to prepayment penalties should a loan balance be repaid before its original term is up. However, Advantage Education Loans does require a minimum refinance loan amount of $7,500, and a minimum monthly payment amount of $50.
How Advantage Education Loans Compares
The current fixed interest rate offering for refinanced student loans through Advantage Education Loan is lower than most other private student loan lenders. The fact that the organization offers only fixed rates may be less attractive to borrowers, but it provides predictability in total loan costs over time.
Compared to other refinance lenders, Advantage Education Loans is similar in that there are no additional fees charged, but it is more cost-effective than some, given there is no funding or origination fee charged at the time a loan is accepted.
Advantage Education Loans offers one of the highest automatic payment discounts of 0.5% compared to similar lenders, and its repayment terms extend out longer (up to 25 years) than most other private lenders.
The ability for borrowers to select a graduated repayment plan is a benefit of Advantage Education Loans, as most lenders only offer a fixed payment repayment schedule that cannot be changed over time.
Additionally, while most private student loan lenders allow borrowers to add a cosigner to a loan application, not all provide the opportunity for that cosigner to be released. Advantage Education Loans does give cosigners the chance to request release, so long as 36 months of on-time regularly scheduled payments have been made.
Finding the Right Student Loan Refinance Deal
Finding the best-fit student loan for refinancing federal or private loan balances takes time and effort, as well as an in-depth understanding of the features, terms, and costs of the new refinanced loan. For most borrowers, having the ability to lock in a low fixed interest rate is beneficial in the long run, as is an extended repayment term that offers flexibility and predictability.
Finally, securing a student loan refinance that does not come with any added fees, including origination, funding, application, or prepayment penalties, can help keep the total cost of refinancing low for student loan borrowers.
Author: Jeff Gitlen