All freelancers are looking for ways to save money. Instead of picking up more jobs or working extended weeks to pocket some cash, there may be a simple solution that can help you save each month. For freelancers with student loans, student loan refinancing can potentially unlock thousands of dollars in savings and the process has never been easier.
Credible has partnered with the Freelancer’s Union, and has saved the average graduate around $11,000 on their student loans. For freelancers, refinancing student loans could be a huge timesaver, especially since the whole process takes less than 30 minutes. Here are some tips to help freelancers save on their student debt.
Pick a goal: to maximize long term or short-term savings
Lowering your monthly payment as much as possible could mean opting for a longer term (15-25 year) refinancing option while picking the shortest possible term (or even prepaying your loans) will get you a lower possible rate and save you interest payments. It can’t hurt to look into elongating your payments with a longer-term option as you can always refinance again back to a shorter-term option after you’re on more sound financial footing.
Refinance when your income is high
If you have a relatively high and stable income at the moment or some other income source, it’s worth looking into refinancing ASAP. Remember that your debt to income ratio is one of the key factors lenders to consider. Even for freelancers, if you can show strong credit and work history your chances for a better offer increases
Understand that refinancing rates are low
The rates offered by lenders directly correspond to market interest rates so you’ll usually get better offers when interest rates are low. Currently refinancing lenders are offering rates under 2%, well below current federal products.
Make sure you compare
Rates and terms offered by lenders in the student loan refinancing space vary significantly. Find out which lenders offer the best rates for the loan types (fixed vs. variable interest rates or short loan term vs. long loan terms) that fits your repayment goals. Also, apply to multiple lenders as you may qualify for one lender and not the next. Don’t worry this is considered “rate shopping” and is reported as one credit pull as long as the inquiries are within 30 days.
Consider adding a cosigner
Consider adding a cosigner with strong credit as you can increase your chances of getting a low interest rate or reducing your monthly repayment. Cosigners can help you if your credit score is below 700 get the best rate possible. You can always have that cosigner removed later when your income is higher.
Don’t try to refinance without a salary
If you just quit your freelancing position or have little or no income, wait until you have an income again as most lenders won’t refinance anyone making less than $20,000. (If you have a cosigner with a strong financial profile, some might consider you.)
Refinancing your student loans is an easy way for many freelancers to find savings. If you are interested in applying to multiple student loan lenders using one form, visit Credible.