10 Questions to Ask Before Refinancing Your Student Loans

Published on Author Kelsey Radcliffe

We’re back with another round of your FAQs. Still have a burning question we haven’t answered yet? Tweet us @Purefy or get in touch on our Facebook page.

1. What discounts are available and are there any fees?

We are all about saving you money, not charging you for wanting to get out of debt. We never charge prepayment penalties, application or origination fees – ever. We offer a 0.25% interest rate discount just for signing up for auto pay. If you have an advanced or specialty degree, there is a range of discounts available depending on the type of degree and your credit score. Check to see exactly what you qualify for with our Find My Rate tool.

2. When does repayment start? Is there a deferment period?

When you refinance a loan with Purefy there is no deferment period; your first payment is due 30 days after the loan disburses. Disbursement depends on your former servicer but it typically takes place 3 – 14 business days after the promissory note is signed. This brings us to another frequently asked question…

3. How do I make payments?

After disbursement, you will receive an e-mail with information on how to set up an account and make a payment with our partners at UAS. Keep in mind that if you sign up for auto pay, you will receive a 0.25% interest rate discount. Need to adjust your payment date? Contact us and we can take care of that.

4. What will my new loan term be?

That’s completely up to you. We currently offer 5, 8 and 12 year terms for fixed rates and 5 or 8 year terms for variable rates. Our most popular term is our 8 year and on average, our borrowers shorten their existing repayment term by 3 years. The term you select depends on your goals for refinancing. If you can afford to increase your monthly payments and want to get out of debt as fast as possible, then a 5 year term is best for you. Want to lower your monthly payments on your 10 year term but still save money? Try a 12 year loan term. Feel free to call one of our refinancing experts at 202-524-1115 if you need help determining the best strategy for your situation – we are here to help.

5. Am I able to combine federal and private loans, or do they need to be refinanced separately?

Yes, we can refinance both federal and private loans together. Remember, refinancing your federal loans will mean that you are no longer eligible for the benefits of federal loans, such as income-based repayment or student loan forgiveness for public service jobs. Read our blog post weighing the pros and cons of refinancing federal loans.

6. Is there a maximum amount of student loan debt that I can refinance?

Our maximum loan amount is $350,000.  If you have a MD, DO, DDS, or DMD, there is no maximum loan amount provided that you meet the other program requirements. Our minimum amount for refinancing is $20,000.

7. What are your DTI requirements?

Generally, your DTI (debt-to-income ratio) should fall under 40%, although our thresholds vary based on your income. Try calculating your DTI with an online calculator (like this one from Zillow) before applying to see if you are eligible. When married couples apply together (with one partner as the cosigner), we combine the income and debts which can increase your likelihood of being approved for DTI-related issues.

8. How are your interest rates determined? Will my loan amount or annual income have any effect on my rate?

Our interest rates are determined by your credit score and the type of degree you have. Your loan amount has no impact on the rates we offer. Your annual income is factored into DTI calculations but won’t have any effect on your interest rate. If you apply with a cosigner, we’ll use the higher credit score to calculate your interest rate.

9. How long do I need to continue making payments with my old servicer after I refinance?

We recommend that you continue making regular payments with your existing loan servicer to avoid missing a payment while the disbursement goes through. Once your loan disburses, it can take anywhere from 3-14 business days for a payoff to be processed. Keep checking your account to ensure that the payoff is applied within this time frame.  Any overpayment we make to your existing loan servicer will be refunded directly to you in the form of a paper check sent to the address on your application.

10. What type of customer support does Purefy offer?

In addition to telephone and e-mail support, you can chat with us through our website or text your Purefy representative. If you need help with the application or want to figure out how to save the most money by refinancing, please reach out to us. If you have questions after business hours, we are always available on chat.

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