Earning a PhD is quite an accomplishment, but that accomplishment can sometimes come at the high cost of PhD student loan debt. Luckily, you may be able to save money if you can get a better deal when you refinance PhDs. We spoke with Jay S. Fleischman, a student loan lawyer and host of the podcast The Student Loan Show, to see what you need to know when refinancing PhD student loans. While refinancing PhD student loans may be overwhelming, Fleischman said "There is no difference between the refinancing options or procedures for PhD level student loans as opposed to those for other loans." So, you already know the process of refinancing PhD student loans if you have refinanced other undergraduate or graduate loans.
Know Your Current PhD Loans
The first thing you need to do if you're considering refinancing your PhD student loans is figure out what loans you currently have. Get all of your loan paperwork together and make a list of every loan. One particularly important item to note is the type of student loans you have, either federal or private, to make sure you don't give up some potentially huge benefits. According to Fleischman, "Federal student loans offer a wealth of repayment and forgiveness options, whereas private student loans do not."
In addition to noting whether a student loan is a federal loan or a private loan, make sure you list the interest rate, whether the loan has a variable interest rate or a fixed interest rate, the monthly payment on the loan and the length of the loan. Once you have this list, you can start making decisions on which loans you want to consider refinancing and which loans you should keep.
Special Federal Student Loan Considerations
Federal student loans have special protections and repayment options, so you may want to consider refinancing them separately from private student loans. Fleischman suggested that "borrowers who have federal student loans may want to look into consolidation of those loans under the Direct Loan Program, which is administered solely by the U.S. Department of Education."
It may be frustrating to have to manage your federal and private student loans separately, but it could be well worth it. "The Direct Loan Program offers the ability for federal student loan borrowers to continue to take advantage of federal repayment and forgiveness programs as well as forbearance and deferment," said Fleischman. There may be other considerations to take into account when dealing with federal student loans depending on your specific situation, so make sure you completely understand your options before you use a private refinance loan to pay off your federal student loans.
Know Your Credit Score
You'll need an excellent credit score if you want to qualify for the best interest rates while refinancing your student loans with a private refinance loan. You should find out if your credit score will help you qualify for the best refinance rates or if you need to improve your credit score before applying. You can do this by getting your credit score for free on LendingTree. If your credit score won't qualify you for the rates you're hoping for, work to raise your credit score before applying for refinancing.
Apply for Refinancing
It's time to apply to refinance your loans after you've achieved the credit score you need for the interest rate you want. Make sure you get multiple student loan refinancing quotes so you can get the best deal possible. You can individually check with banks, credit unions and student loan refinancing companies, but each will require you to fill out their own application. If you want to speed up the process, you can get multiple student loan refinancing quotes in one place on LendingTree by just answering a few easy questions.
Pick the Best Loan for You
Now that you've received your refinance quotes, you can start comparing the loan offers. Make sure you completely understand the terms and conditions of each quote as they can be quite complicated. "Many private loans require a guarantor or cosigner, application or underwriting fees, and other terms that may make a seemingly attractive offer less enticing," said Fleischman.
Once you've narrowed down the loan offers you're considering, you can do an analysis to see which loan saves you the most money over the term of the loan. Simply add up all fees and payments you'll pay over the life of each loan to get the total cost of each loan. Compare the total cost for each loan to see which has the overall lowest cost. Remember, choosing the loan with the lowest overall cost may not be the best option for you if there are other non-financial terms that make a loan less attractive, such as limited repayment options or a required guarantor.
If you have decided to refinance PhDs, get started by getting multiple quotes on LendingTree today. Then pick the best option for your situation and start saving money.