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Business school graduates are excellent candidates to refinance MBA loans. Because an MBA degree comes with MBA student debt (the average grad school debt is $66,300) and a bigger salary, choosing to refinance your MBA loans could save you thousands of dollars.
- Why you should refinance your MBA loans
- How much can I save if I refinance my MBA loans?
- How to qualify for refinancing
- Should you refinance MBA loans?
Why you should refinance your MBA loans
Expensive federal student loans and private student loans can hold you back from so many other ventures in your life, like buying a home, getting married, or growing your family. There are a few reasons refinancing student loans can be a smart move.
- It could lower your interest rate. Getting a lower interest rate means you’ll pay less in total over the lifetime of your loans. The less interest, the less extra money you owe back to your lender. A lower rate isn’t guaranteed, so try exploring all your options with many different lenders first.
- It could lower your monthly payment. Being able to afford your monthly payment is crucial to building and maintaining a solid credit score. The more on-time payments you have, the more your score climbs; the longer you go without making payments, the more it lowers. Lowering your monthly payment gives you the chance to be able to afford your monthly payment so you can pay on time.
- You can combine multiple loans into one. If you have many different loans from many different lenders, keeping track of your payments can be difficult. Refinancing can combine them into one, convenient payment. This is helpful even if all your loans are from the same lender or loan servicer (like the Department of Education).
Keep in mind, though, that when you refinance your federal loans, you’ll lose access to a number of federal programs that could help, including income-driven repayment plans (like income-based repayment) and forgiveness programs (like Public Service Loan Forgiveness). So make sure you won’t need access to these programs before you get a refinance loan.
How much can I save if I refinance my MBA loans?
Let’s say you’ve recently graduated and you owe about the average MBA debt of $66,000. Your interest rate is 6.31% and you had Direct PLUS Loans to fund your education.
Right now you’ll probably pay around $743 a month over a 10 year term (on one of the typical repayment plans). Over the life of the loan, you’re going to pay $89,166. If you refinance, you could get an interest rate as low as 4.61%, lowering your monthly payments by $56 and your total by $6,664.
|What you pay now ...||If you refinance ...|
|Interest rate||6.31% APR||4.61% APR|
|Total repayment cost||$89,166||$82,502|
Refinancing isn’t for everyone, so make sure the loan terms are in line with your budget and financial future. But if you’re still on the fence, check out our student loan refinancing calculator to see how much you can save.
Step 1. Enter your loan balance
Step 2. Enter current loan information
Step 3. Enter your new loan information to start calculating your savings
If you refinance your student loan at % interest rate, you can save will pay an additional $ monthly and pay off your loan by . The total cost of the new loan will be $.
Does refinancing make sense for you?
Compare offers from top refinancing lenders to determine your actual savings.
Checking rates won’t affect your credit score.
How to qualify for refinancing
To get the most out of your MBA refinancing, you’ll want to make sure you’re an ideal refinancing customer. Besides being a U.S. citizen or permanent resident (or having a co-signer that meets this criteria), here’s what a private lender is looking for when choosing the best candidates.
- Credit score and credit history: The higher your credit score, the more likely you are to qualify for a loan. Along with that, the lower your interest rate will be. If you’re hoping to refinance but your credit report isn’t in the best shape, work on building it up first. Pay down other debt like credit cards, get bad marks removed, and make consistent payments.
- Income: It’s difficult to take out a new loan if you can’t prove you can pay it back. If you don’t have reliable income coming in on a regular basis, you may want to hold off on refinancing. It’s important to show lenders that you’re serious about borrowing money that you’ll pay back on time every month. Along with that, how much you earn matters as well. It can determine how much you can refinance and your interest rate.
- Cosigner: If you don’t have a great credit score or a solid paycheck to prove your creditworthiness, you’ll likely need to find someone who can. Getting a cosigner means they’re going to be responsible for the loan too in case you aren’t able to pay it back.
The student loan consolidation companies in the table below are Credible’s approved partner lenders. Because they compete for your business through Credible, you can request rates from all of them by filling out a single form. Then, you can compare your available options side-by-side. Requesting rates is free, doesn’t affect your credit score, and your personal information is not shared with our partner lenders unless you see an option you like.
|Lender||Variable rates from (APR)||Fixed rates from (APR)||Check rates from multiple lenders in 2 min|
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|Compare personalized rates from multiple lenders without affecting your credit score. 100% free!
Should you refinance MBA loans?
If you refinance or consolidate your student loans, you can significantly cut down the cost of your repayment. But before you start the student loan refinance application process, make sure you’re a good candidate. Make sure you qualify, can afford the loan payments, and are getting the best deal around by comparing student loan refinancing companies.