If You Want To Refinance Student Loan Then Know a Few Things about Your Credit Score
There are plenty of private lenders available, who will be ready to provide you student loan at very low rate of interest. However, in order to be eligible for that you need to have good credit score as well. As you know, you can save plenty of dollars while repaying your loan, if your rate of interest is much lower. Therefore, before applying for student loan please learn the following about your credit score.
Maintain a good credit score for your loan approval
Before approving your loan, every financer is going to make sure that whether you are really committed person to return back the loan. Therefore, they would like to check whether you have good credit score or not. Credit score will determine how responsible you are with your money. It depends upon the following factors
- Your payment history
- How much amount you owe
- Length of your credit history
- What are your new credits
- Credit mix
Higher your score, you will be considered a better candidate for low interest loan.
Check your credit report
Can you refinance your student loan when you have bad credit is a common question that many of them ask. Check your credit report and verify whether everything is reported correctly. You can get your free credit report from a number of sources and if there is any misreporting then get it corrected.
Ask yourself whether you always pay your debt on time? Do you maintain high balance? Any responsible borrower will always repay back in timely manner and will always maintain a very low balance. It is important that your spending must be less than 30 per cent from your credit limit.
Credit score is not the only criteria for loan approval
It is good that you have good credit score, but that is not everything. In order to borrow, you must have good source of income too. You must have good savings and better employment record too. For better financial management you must be able to show positive cash flow.
Check your interest rate without influencing your credit score
It is possible to save lots of money by knowing that you are eligible for lower interest. Some lenders can let you know your interest rate without affecting your credit score. This will help you to make an informed decision.
Your credit score will be affected after refinancing
It is important for you to understand that your credit score will be knocked down temporarily once you refinance your student loan. However, if you maintain proper credit balance then it is unlikely to drop significantly.