Ah marriage, that blessed arrangement that legally brings couples, and their debt, together. Whether you have already tied the knot, or may in the future, there are a few things you should know about how student debt can affect your finances when you marry.
Taxes – Filing your taxes jointly can lead to a smaller tax bill come April, but filing separately can maintain lower monthly payments on your student loans if you are using federal benefits such as income based repayment. If you have income based repayment, filing jointly will increase your income which will also increase your student loan payment. It’s important to remember that when you refinance your loans, you give up several federal benefits but gain some or all of: shorter terms, lower lifetime costs and lower monthly payments.
Fine Print –It’s important to read the fine print in your partner’s and your own student debt terms. All federal loans, and some private loans, will discharge your student debt after death or full disability. Always be sure to carefully review the fine print on any financial documents, but especially when you marry.
Planning – Knowing what debts and assets you both bring to the table is a good way to properly plan for your financial future. If you and your spouse have different terms, payments dates, and interest rates it can be confusing to keep straight. When refinancing, you can combine your and your spouse’s loans into one joint monthly payment for all of your federal and private loans. By refinancing jointly, you can select a new term (number of years) and your interest rate will be determined by the higher of the two credit scores. Refinancing is a great way to simplify your finances, lower your interest rate and get out of debt sooner.
Unlike most lenders, Purefy will base qualification on your and your spouse’s credit profiles taken together, rather than qualify you each individually. If your spouse or partner has student loan debt, yet may not have as strong a credit profile, we will underwrite your loan as if you were one person by combining your debts and income – and will use the higher of your two credit scores.
So plan accordingly for your dream within a dream. Call, chat or email us if you have any questions about refinancing your student loans.