Key Things to Know About Student Loan Refinance

While student loan is a great way to fund higher education abroad, managing the loan effectively is a crucial aspect of personal finance. Student loan refinance is a smart move to reduce monthly payments and secure a lower interest rate. Refinancing an education loan is about replacing a current study loan with a new one from a bank or NBFC. It can help borrowers to secure more favourable terms as compared to original loans, leading to extra savings and an easier repayment schedule. Here are some key things you need to know about student loan refinance.

Student Loan Refinance – Key Benefits 

With student loan refinance, you can reduce your financial burden. It can also unlock a lot of other benefits like: -

Reduced Interest Rate

Opting for refinancing allows borrowers to lower their interest rates, which can make monthly payments more affordable and easier for them. 

Ease of Adjusting Repayment Terms

A shorter loan tenure can help students repay their loans faster by reducing the total amount payable. However, a longer term will help students make affordable payments from month to monthly basis.

Release a Co-Signer

For those who have a co-signer on their existing student loans, refinancing loans can help them release co-signers from any future liability.

Eligibility Criteria

• Completed education

• Current loan for studies in India or abroad

• There should be no defaults in the repayment history 

• Stable income or co-applicant support

All leading banks and NBFCs evaluate credit history, income and employment status, and Debt-to-income ratio before approving student loan refinancing applications. 

Process of Student Loan Refinancing

• Approach your current lender to express your wish to opt for refinance

• Research and identify potential lenders

• Select the best one as per your needs

• Submit all the required documents 

• Use your credit score to get a better deal on the interest rate

While refinancing is a wise option for most students, it is not the correct choice for all. So, it is important to consider your refinancing needs, loan processing fees, and terms from different lenders. Leading NBFCs like Avanse Global Finance offer education loans without collateral or with collateral with the ease of refinance.