Looking at the latest bill for your MOHELA student loans and wondering if there's a way to lower your monthly payment and pay less overall?
Yes. There absolutely is. Refinancing helps the average borrower (including those with MOHELA student loans) save over $250 per month and more than $16,000 over the life of their loan.
Plus, it's actually pretty simple — believe it or not, you can complete the entire process in less than 30 minutes. Refinancing your Mohela student loans requires just a few steps:
See also: MOHELA Student Loans: The Ultimate Guide
Let's talk about what you need to know before you take the plunge and then discuss the exact steps you'll take to start saving.
When you refinance your student loans, you apply for a new loan with a new lender. That new lender purchases your old loans and provides you with new loan terms, including a new interest rate. What do they use to determine your new rate?
One of the most important things to understand about student loan refinancing is that the interest rates on your federal student loans have nothing to do with you as a borrower (they're set by federal law) and cannot be changed—no matter how much money you make or how good your credit is.
That's why refinancing can provide such significant savings. For most borrowers, refinancing with a private lender provides an opportunity for a significant interest rate reduction.
And that lower interest rate can translate into serious cost savings.
Of course, the biggest reason to refinance your student loans is saving money, but there are additional benefits worth mentioning:
You can absolutely refinance your federal student loans. Thousands of borrowers do it every year.
But before you do, you should understand that you're refinancing with a private lender, not with your federal student loan servicer. Like we mentioned above, servicers can't offer you new terms because federal student loans are offered at rates set by the U.S. Department of Education.
When you finance with a private lender, you lose eligibility for federal loan benefits like income-based repayment or loan forgiveness. If you're relying on those, look carefully at the numbers before you choose to refinance.
Many federal borrowers aren't eligible for or don't plan to take advantage of federal loan benefits, and those borrowers are good candidates for refinancing—and the cost savings that come with it.
Plus, whereas federal loan consolidation is only available for federal loans, borrowers with both private and federal loans can refinance those together with a single private lender.
If you're considering refinancing your student loans, then you definitely want to find the best deal for you. Fortunately, we've created a list of the best banks for student loan financing—these are well-established and innovative lenders with the best interest rates.
As you compare lenders, here are some questions to ask:
Use a refinancing calculator. Most lenders have one on their website—and so do we.
Even seemingly small interest rate reductions can save you big over the long haul. Most lenders will reduce your interest rate by 0.25% if you sign up for automatic payments. Some provide additional reductions.
For instance, Citizens One knocks another 0.25% off if you have a bank account with them.
Each lender provides their own particular package, along with useful perks. Find out which benefits are especially valuable for you. For instance, you could:
If it's important to you to talk to a human being on the phone when you have a question, then read user reviews and find out how their customer service rates. If you prefer access to a chat function, check out their website to see if they have one.
This one's important: Reputable lenders provide refinancing free of charge. An origination fee from a lender should be a red flag.
If you need a tie breaker, consider the details of each lender. For instance, Splash Financial has special programs for doctors and medical residents; Common Bond contributes to a child's education for every loan they fund; and SoFi provides networking opportunities for its borrowers.
Ready to see how much you could save by refinancing? Use our calculator to find out.
Special offers for medical resident and fellow refinance products
Splash Financial is a leader in student loan refinancing with new rates as low as 2.63% fixed APR which can save you tens of thousands of dollars over the life of your loans. No application or origination fees and no prepayment penalties. Splash Financial is in all 50 states and is intensely focused on customer service. Splash Financial is also one of the few companies that offers a great medical resident and fellow refinance product. You can check your rate with Splash in just minutes.
Click here to see more of Splash's offerings and to see how you can save money.
SoFi is the leading student loan refinancing provider.
$30 billion+ in refinanced student loans. SoFi has some of the lowest interest rates and, unlike the other lenders we reviewed, there's no maximum on the amount you can finance. Some state restrictions may apply.
Save thousands on your student loans and pay off your loans sooner. Find your rate.
Using technology, data, and design to build affordable products, Earnest's lending products are built for a new generation seeking to reach life's milestones. The company understands every applicant's unique financial story to offer the lowest possible rates and radically flexible loan options for living life.
Click here to apply with Earnest and to see how much you can save.
Operates in all 50 states; 2nd largest student loan refinancing lender
Laurel Road is a national online lender with customers in all 50 states, the District of Columbia, and Puerto Rico. Many of our non-bank competitors are not able to lend in all 50 states.Laurel Road has grown to be the second largest player in the student loan refinancing space in large part because of our reputation as the go-to low rate provider.
For every loan they fund, they contribute to the education of a child in need
CommonBond was founded in 2011 by three MBA graduates from the University of Pennsylvania’s Wharton School who wanted to help their peers escape from high-interest student loan debt. Its original focus was on grad students, but it has since expanded to cover undergrads as well.
Of all the companies we reviewed, CommonBond has some of the best customer service. The company prides itself on being easy to reach by email, phone, or live chat. It offers networking events, expert panels, insider newsletters, and even has a program help borrowers who lose their jobs to find new ones. CommonBond also makes you feel good about choosing to refinance with them by donating money to an education nonprofit for each loan they write.
Get a personalized review of your refinancing options with CommonBond today.
Works with 300+ community lenders for higher approval chances
Connecting student borrowers to a network of over 300 community lenders with low interest rates. By partnering with these lenders, LendKey is able to give consumers direct access to the best rates available from the most borrower friendly institutions. As the servicer of all loans obtained through its platform, you can rest easy knowing your personal information will be safe and that the best customer service team will be ready to answer your questions from application until your final payment.