Thousands of people in the UK refinance their student loans each year to make paying them off more manageable, including those who are self-employed. It is a common myth that people who work for themselves do not have the option of refinancing their student loans. There is no question that being self-employed can present many great challenges, including fluctuating income and difficulty paying one’s bills on time consistently. If you are having trouble making payments on your student loans, you should consider refinancing them immediately.
What does Refinancing Student Loans Entail?
Refinancing your student loans involves finding a private lender who can work with your current lender to transfer the loan. If you are successful in doing this, you can get new and improved terms for your loans that will make paying them off on time much easier. If you currently have a high interest rate, refinancing can help lower it significantly.
Before You Get Started
It is important to keep in mind that refinancing isn’t right for every single person with student loans. Those who have student loans through the government and decide to refinance with a private lender could end up in an even worse position. You will need to carefully weigh the benefits and drawbacks of doing this before making a final decision.
Requirements for Refinancing
There will be some basic requirements that you will have to meet before you can refinance your student loans, such as having a steady job with adequate income. You will have a very hard time finding a private lender to refinance your loans with unless you have stable employment and make enough to cover your new monthly payments on time. Those with bad credit can still refinance their loans through a private lender, as many of these lenders don’t even factor in credit with applicants.
You Are a Higher Risk
You will need to be aware that most lenders will view you as a higher risk or liability because you are self employed. If you receive a steady income from your work, however, you can get approved. Those who are self-employed sometimes get higher interest rates with their loans, but this is not always the case. There is still a fairly good chance that you can get a lower rate than what you have now if you refinance though, which is the whole point.
Fortunately, it is very easy to apply for student loan refinancing in our digital age. As long as you have access to a computer and internet connection, you can go online to fill out an application via Emu payday loans. This process won’t take up much of your time and you will be very glad you did it. The lender will have a section on their site with an application form that you will be required to fill out and submit. Make sure that all of the information that you fill out in the application is accurate so you don’t run into any problems later on.
You will be required to turn over certain documentation when applying for student loan refinancing, but the specific documents will depend on the lender. A lot of lenders will ask you to provide them with tax returns, invoices and bank statements to prove your income. The lender uses this information when determining whether or not to approve your application. You should make a point of getting these documents together ahead of time so that you are fully prepared.
Alternative Options for Getting Approved
If you are having difficulty getting approved for student loan refinancing, there are a number of alternative things you can do to boost your chances.
• Work on improving your credit score: If your credit score is holding you back from getting approved, take some time to work on improving it. There are lots of ways to do this, such as taking out a credit card and paying it off on time consistently. The more you pay your bills on time, the higher your score will get.
• Get a Co-Signer: Another good way to seriously boost your chances of approval for student loan refinancing is to find someone who can act as your co-signer. This person will be added to the loan in the contract with the responsibility of covering the remaining payments if you are no longer able to. Most lenders will rethink approving someone if they have a co-signer. You will need to find someone with good credit and stable income though.
• Increase your income: Whether it is asking your employer for a raise or taking on a second job, increasing your income significantly can be an effective way to get the approval you need from a lender. The more money you make, the more willing most lenders will be to give you the green stamp of approval.
Read the Fine Print
Before you can receive your loan from the lender, you will be required to sign a contract with them. Take all the time you need to read through the loan so you know precisely what it says down to the last detail. This contract will cover everything from the total amount of the loan to the specific date it is due to be paid back. If there is anything in the contract that jumps out at you as unfair or shady, you should ask the lender about it before signing.
Should I Refinance My Student Loans?
When you are trying to decide whether or not to refinance your student loans, you will first need to consider how much more you have left to pay off. If you only have a few hundred pounds left to pay on your loans, refinancing is probably not necessary. You should also make a point of looking at your credit and financial situation prior to submitting any applications. Everyone should know what their credit score is, and this situation will give you a good excuse to check. As long as you follow these instructions, you should be able to make the right overall decision.