Over 40 million Americans hold $1.4 trillion in student loan debt, according to the Federal Reserve Bank of New York. ASDA partner SoFi answers some commonly asked questions about student loan refinancing.
Who should refinance?
Refinancing is a great solution for working dentists who have high-interest, unsubsidized Direct Loans, Graduate PLUS loans and/or private loans. Federal loans do carry some special benefits, such as public service forgiveness and economic hardship programs, that may not be accessible to you after you refinance.
What is a Direct Consolidation Loan?
A Direct Consolidation Loan is a government program that allows you to combine multiple federal education loans into a single loan. The resulting interest rate is a weighted average of your prior loan rates.
What is the difference between consolidation and refinancing?
When you consolidate federal loans through the federal loan consolidation program, you’re combining multiple loans with a resulting interest rate that’s the weighted average of your original loans’ rates. When you refinance loans with a private lender, you’re also consolidating (i.e., combining) them, but the lender will use your financial information to give you a new, hopefully lower, interest rate.
Will applying for a student loan refinancing affect my credit?
Typically, a lender will conduct a soft credit pull to check the rates and terms you qualify for; this will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.
When is the best time to refinance?
You must have graduated and have a job offer to start within 90 days. The earlier you refinance to a lower loan rate, the more money you will save. Even if you are in your grace period, interest accrues for unsubsidized federal loans.
SoFi extends ASDA members the opportunity to save money on their student loan debt by refinancing through SoFi.com/ASDA. SoFi honors the first six months of any existing grace period of the loans you refinance with the company. Members and their families who refinance their student loans through SoFi.com/ASDA are eligible to receive a $300 welcome bonus1 upon refinancing.