What To Do if You’re Denied for a Student Loan Refinance

By Ryan Lane With fixed interest rates as low as 3%, it’s a great time to refinance private student loans. Except if you can’t. Mario Martinez, a 29-year-old from Houston, owes approximately $130,000 in private student loans and hoped that refinancing could reduce the $1,600 he pays each month. “I’d […]

By Ryan Lane

With fixed interest rates as low as 3%, it’s a great time to refinance private student loans. Except if you can’t.

Mario Martinez, a 29-year-old from Houston, owes approximately $130,000 in private student loans and hoped that refinancing could reduce the $1,600 he pays each month.

“I’d finally have some wiggle room to do extra things I wanted to do,” he says.

But he hasn’t found a lender he qualifies with. So he’s put this plan on hold, even though his six-figure debt is accruing interest at 12%.

If you’ve also been denied for refinancing — or think you might be — keep trying if this option could save you money. Here’s how to put yourself in a better position before applying.

Understand Your Eligibility

If you’re not sure whether you’ll qualify for student loan refinancing, start by looking at lenders’ eligibility criteria. Most have similar baselines: generally a FICO credit score in at least the high 600s, a debt-to-income ratio below 50% and steady income.

Other requirements will vary by lender. For example, many want borrowers who have graduated, often with at least a bachelor’s degree. Most won’t accept noncitizens; that factor contributed to Martinez’s denial.

“Because of my status as a non-U.S. citizen, I wasn’t able to go through the usual channels of refinancing,” he says.

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