It can be difficult to pay back student loans when you live in the United States and send your payments to a bank in another nation. Refinancing your international student loans with a lender based in the United States could make repayment easier and perhaps result in interest cost savings.
The answer to the question, “Should I refinance my private student loans?” may be yes for a number of reasons.
5 REASONS TO REFINANCE PRIVATE STUDENT LOANS IN THE U.S.
Here are the top five advantages of refinancing your student loans in the United States:
1. Qualify for student loan repayment assistance.
More businesses than ever are providing their employees with student loan advantages. To assist you in repaying your student loans, these businesses will match a portion of them up to $5,250 year tax-free.
You might not be eligible for this help with your overseas student loan even if you work for one of these organizations. Fortunately, there is a workaround: You can refinance your loan with a lender in the United States to make it eligible.
You can refinance and swap out your foreign student loans with a loan from the United States. You could pay off your debt more quickly if your new loan qualifies for employer-sponsored student loan aid.
2. Score a lower interest rate.
Receiving a cheaper interest rate is among the main advantages of refinancing private student loans. You might save hundreds or even thousands of dollars over the course of your loan if you are approved for a rate that is lower than the one you currently have.
Consider the scenario where you have $35,000 in student loan debt with an interest rate of 11%. If you can lower that rate to 7.99 percent, you might save close to $7,000 in interest over the course of ten years. Additionally, your monthly payment would decrease by $58.
Refinancing your student loans could lower your interest rate, save you money, and make repayment easier.
3. Release a cosigner or collateral from your loan.
You might be able to discharge a cosigner or collateral from your foreign student loan if you choose to refinance your student loans. Your cosigner, if you used them when you applied for the loan, is responsible for your student loan debt.
The lender may ask your cosigner for repayment if you don’t make payments. If your overseas student loan has collateral connected to it, the lender may consider your loan to be in default and start the procedure to seize your assets if you fail to make payments.
You might be able to refinance and then take out a new student loan on your own, removing the need for a cosigner or collateral. While some refinancing lenders need applications from international graduates with a cosigner who is an American citizen.
4. Build your U.S. credit history.
To obtain a loan, apply for a credit card, or perhaps even rent an apartment in the United States, you must have a high credit score. Your history of debt management is one of the elements used to determine your credit score. Your credit score will rise if you pay your bills on time, while it will fall if you miss payments or use all of your credit cards.
International loans are not taken into account when calculating your credit score; it is solely based on U.S.-based financial activities. You might have to rebuild your credit score from scratch if you immigrated to the United States from another nation.
You can begin to establish your credit history and raise your credit score by deciding to refinance your overseas student loans in the United States. Your credit score will start to rise if you pay your bills on time.
You’ll find it simpler to be approved for loans, credit cards, and other financial goods in the US as your credit score rises.
5. Switch to a lender that’s easier to work with.
If you live in the United States, refinancing with a U.S.-based lender may make paying back student loans simpler because you won’t have to worry about currency exchange rates, overseas transfers, or foreign banking costs.
Additionally, you can get new advantages. If you experience financial difficulty, some lenders offer borrower safeguards like the option to suspend payments through forbearance or deferment.
Others allow you to prepay your student loans without incurring fines, allowing you to make additional payments to reduce your debt more quickly without incurring any penalties. If your relationship with your current lender hasn’t been terrific, switching to a new one through refinancing can make things better.
