If you're looking to refinance your loans it can be extremely confusing and frustrating. It takes a lot of time to learn what your options are, along with the benefits and drawbacks. On top of that, there's a lot of different companies out there that are able to refinance student loans, so which one do you choose? And now, there's even a new way to refinance your loans using income share agreements. So, with all the options out there, what is the best student loan refinance option?
The Traditional Route
The traditional way to refinance your student loans is to replace your current loans with different loans at a lower rate. If you have federal loans, you will typically lose any benefits you gain from them, like deferment, when you refinance. However, refinancing can give you a lower interest rate or extend the term of repayment to lower your monthly payments. You have to weigh the benefits of the new rate or term length, with the loss of government loan benefits.
There are also many companies that refinance student loans in this way. When you look to refinance, make sure you shop around and find the best rate for you. Every company will offer a low rate, but each one looks at different factors to decide your interest rate. This makes it beneficial to look at different companies to try and get the lowest rate (or payment). Just be careful when looking to refinance because a credit inquiry will show up on your credit score, lowering it, and increasing the rate you will get.
The other best student loan refinance option
There is another, some might even say better, way to refinance pesky student loans. Defynance allows you to refinance your student loans using an income share agreement, or ISA for short. This revolutionary concept bases payments off of your income, so you only make payments that are affordable. In fact, if you make under $25,000 per year, then your payments are paused until your income comes back above that. An ISA is also interest free, so you don't have a growing balance each month. Defynance aligns your goals with ours, so we are partners in your career journey.
Defynance caters their ISA to your life and considers factors outside of just your credit score, like your potential. Each individual gets a different income share percentage and length, because every situation is different. We allow you to choose the length of ISA that works best for you. Refinancing with an income share agreement can allow for greater flexibility as you know you will always keep a majority of your income each month.
You can apply with Defynance here.
