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Young people aged 25 to 34 constitute the largest cohort of student loan borrowers, totaling 14.8 million borrowers in total. The average individual in this age bracket has a student loan balance of $ 33,817.56, according to statistics from the US Department of Education Q4 2020 data.
While this figure is just below the amount the average student loan borrower of all ages carries ($ 39,351), that’s more than double what the 24 and under cohort faces (their average balance is $ 14,807.69).
The increase in outstanding debt can be attributed in part to the years of additional interest that young people aged 25 to 34 pay compared to those under 25, as well as the additional loans they may have. contracted to finance additional schooling.
If you’re in the 25-34 age range and struggling with five-figure (or more) debt, you can take some comfort in knowing that it’s not too late to start. reach. In advance, Select offers you some advice on managing your student loans.
Here’s what student borrowers aged 25-34 should consider
Your mid-twenties and early thirties mark an important chapter in your adulthood – whether you’re advancing your career or getting married and planning a family – and these are good times to prioritize a repayment plan. of your student debt.
For example, as you advance in your career, your salary may allow you to make more than the minimum payment on your monthly student loan bill. As you get married and prepare to start a family, now is the time to focus on reducing your student debt before tackling competing expenses, like a monthly mortgage payment and child care. children.
A way of paying off your student loans faster means refinancing them through a private lender. Borrowers with good credit can probably get a lower interest rate and choose their new loan repayment schedule.
If you have the extra funds to spend more money on paying off your debt, you can shorten your loan term from 10 to five years, for example, or whatever makes sense for your finances and the outstanding balance. of your loan. A shorter payment schedule would mean higher monthly payments, but with a lower interest rate and shorter loan term, you can speed up debt repayment and save money in the long run.
Select the best student loan refinance options to help simplify your search. They all offer a wide choice of loan terms and interest rates to choose from, charge no application or origination fees, have no prepayment penalties, and offer flexible repayment terms, payment options. in the event of economic hardship and automatic repayment interest rate reductions. (See our methodology for more information on how we chose the best student loan refinancing companies.)
We do not recommend that federal student loan borrowers refinance while the payment and interest freeze is in effect, currently until September 30, 2021. Once the federal student loan suspension is over, think about what federal protections you can expect. you will lose if you choose to refinance privately. Private student loan borrowers, on the other hand, should consider refinancing if their interest rate is high, especially in this low rate environment.
To determine which student loan refinancing companies are best for borrowers, Select has analyzed and compared the financing of private student loans by national banks, credit unions and online lenders. We reduced our ranking by only considering those that offer low student loan refinance rates and prequalification tools that don’t hurt your credit.
Although the companies we have chosen in this article consistently rank among the most competitive interest rates for refinancing, we also compared each company on the following characteristics:
- Wide availability: All of the companies on our list refinance federal and private student loans, and each offers your choice of variable and fixed interest rates.
- Flexible loan terms: Each company offers a variety of financing options that you can customize based on your monthly budget and the time you need to pay off your student loan.
- No creation or registration fees: None of the companies on our list charge borrowers an upfront “origination fee” for refinancing your loan.
- No prepayment penalty: The companies on our list do not charge borrowers for prepayment of loans.
- Simplified application process: We made sure companies offered a quick online application process.
- Co-signer options: Each company on our list allows a co-signer if the direct borrower is not eligible for refinancing on their own.
- Autopay discounts: All of the companies listed already calculate automatic payment discounts in their advertised rates.
- Protection of private student loans: Although you lose federal student loan benefits when you refinance, every company on our list offers some kind of financial hardship protection for borrowers.
- Loan sizes: The above companies refinance loans in a range of sizes, from $ 5,000 to $ 500,000. Each company advertises their respective loan amounts, and completing a pre-approval process can give you an idea of your interest rate and monthly payment.
- Credit / eligibility conditions: We took into consideration the minimum credit scores and income levels required if this information was available.
- Customer service: Each company on our list provides customer service that is available by phone, email, or secure online messaging. We have also opted for lenders with an online resource center or advice center to help educate you on the student loan refinancing process.
After reviewing the features above, we’ve sorted our recommendations by best for overall refinancing needs, having a co-signer, applying with a fair credit score, refinancing parent loans, and medical school loans.
Note that the rates and fee structures for refinancing private student loans are not guaranteed forever; they are subject to change without notice and they often fluctuate with the Fed rate. Choosing a fixed rate APR when refinancing will ensure that your interest rate and monthly payment will remain consistent throughout the life of the loan.
Your refinance rate depends on your credit score, income, debt-to-income ratio (DTI), savings, payment history, and overall financial health. To refinance your student loan (s), lenders will conduct a rigorous credit investigation and request a complete application, which may require proof of income, identity verification, proof of address, and Moreover.
Editorial note: The opinions, analyzes, criticisms or recommendations expressed in this article are those of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.