Student loan refinancing options are widely available to people who have graduated and hold a degree, but what about those who haven’t graduated? Its entirely possible that you might not have made it through your entire program, but continue to juggle multiple student loans each month. While it is true that the number of options available to non-graduates are substantially more restricted, the good news is there is at least one option on the table.
Refinancing student loans without a degree does take a little bit more work than is required under most other circumstances. In fact, at the moment, there is only one viable option open to non-graduates. The folks over at Citizens Bank understand that sometimes life throws you curve balls in the middle of your degree program. All other lenders, currently on the market, require a degree or equivalent proof of graduation before considering someone for their refinancing products.
The State of Student Loans in America
It’s important to talk about refinancing because student loan debt in the United States could be reaching a crisis status. The latest statistics from 2017 indicate that Americans hold over $1.41 trillion in student loan debt. Crazier still is that this astronomical number is almost double the currently held credit card balance, which stands at $810 billion.
Think about that for a moment; student loans account for almost 50 percent more debt than credit card debt in the U.S. Over 44 million people have student loan debt, and over 10 percent of those people have already entered into delinquency status.
Rising tuition costs combined with a stable minimum wage means that more people than ever before are required to take on larger amounts of debt to receive an education. It’s increasingly necessary to take on substantial debt in the name of education.
When Should You Consider Refinancing?
Whether you have graduated or not, sometimes financial circumstances change. Refinancing a student loan is one means of adjusting to the surprises life throws your way. Refinancing could help you reduce the cost of your loans over time, and can help reduce multiple monthly payments into one.
Refinancing student loan debt essentially pays off one (or more) loans with a new lump sum. The new loan takes into account the previous student loan interest rates to create a new one. Before entering into the process you should understand your current financial restrictions, and what changes you are looking to make.
For example, one of the most common reasons why people choose to refinance is because they are burdened by multiple payments a month. For some borrowers, it’s much easier to manage one bulk payment to one financial institution instead of a bunch of different ones.
Other people refinance in order to reduce their interest rate and therefore reduce their monthly payment. Because the original debt was paid off before initially expected, the new refinanced loan could offer better terms.
Still, other people recognize they are going through a period of financial hardship and would like to renegotiate their debts. Usually, this means increasing the term length to reduce the monthly payment.
Finally, many students originally required a cosigner to be approved for their student loan. It’s possible their financial situation has changed and they can now pay the debt off on their own accord. If this is the case, a refinanced solution is also required.
What Lenders Offer Refinancing to Non-Graduates?
For starters, not many lenders or banks accept degree-less applicants when it comes to student loan refinancing. In fact, only one lender that we know of accommodates non-grads. Citizens Bank offers students the option to refinance student loans without a degree.
The only product now on the market for non-graduates is called the Citizens Bank Education Refinance Loan. It is open to all U.S. citizens, permanent residents, and resident aliens who have an approved cosigner. The minimum value approved for their refinancing service is $10,000, but it can go up to $500,000 depending on the degree program.
There is one restriction which could affect the application process. Students who do not hold a bachelor’s degree are required to have made at least twelve on-time payments on their loans. Although only listed in the fine print, this restriction could potentially have serious consequence for non-graduate students.
A final note is that the Citizens Bank Education Refinance Loan is only open to people who are no longer attending school. If you are still in school, you may be out of luck when it comes to a successful refinance.
Author: Jeff Gitlen
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