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5 Solutions If Your Student Loan Refinancing Denied

It’s a fantastic opportunity to refinance private student loans. Except, of course, if you can’t.

If you’ve been rejected for refinancing, keep trying if this course of action might help you save money.

Here’s how to get a better bargain before getting started on the application procedure.

1. Compare Lenders and Check Their Eligibility Requirements

If you’re not sure if you qualify for student loan refinancing, check out the requirements of the lenders.

The majority of lenders start at roughly the same place: a credit score of at least 650, a debt-to-income ratio of less than 50 percent, and regular earnings.

Other criteria may differ by lender.

For example, many lenders search for individuals who have graduated, whether with a bachelor’s degree or not.

Because I am a non-citizen of the United States, I was unable to use the conventional procedures for refinancing.

Micheal

These rules, on the other hand, aren’t nationwide.

For example, loan refinancers Citizens Bank will take international students with an eligible US citizen co-signer.

To discover a lender who meets your demands, compare a list of student loan refinancing lenders.

Find out whether those lenders will allow you to pre-qualify.

You can determine whether or not you’ll be accepted without your credit score being affected by numerous credit checks.

Bonus: See how much you could save by using our student loan refinancing calculator and compere lenders.

2. Take Time to Listen to the Lender’s Comments on Your Denial

The lender’s lending criteria and judgment will decide whether or not you are approved for a loan.

If you want to reverse your decision, the lender will send you an adverse action notice, which must include an explanation.

According to Ellen, the reasons given on these notifications are not always uniform, but they frequently fall into similar categories such as having too many open credit lines, not enough income, or too much debt.

By default, an adverse action notice will most likely be delivered to you via email or postal mail.

You are entitled to a free copy of your credit report for 60 days after the lender takes an unfavorable action against you.

Double-check the accuracy of all of your information.

Contact the lender if everything appears to be in order with your credit and the negative action notice is unclear.

Check to see if you correctly understand the reason for your rejection.

ELFI

You may also like: Can I Refinance Student Loans During My Grace Period?

3. Improve Your Credit History Before Applying Again

You may be turned down for student loan refinancing if your credit history is bad.

To learn more about any potential roadblocks, obtain a free copy of your credit report.

Some may be apparent, such as a recent bankruptcy.

Kaitlyn Coyle, 29, of Riverton, Wyoming, wanted to refinance her roughly $50,000 variable-rate private loan into a fixed rate.

However, because of medical debt that has been in collections, her application was denied.

One solution for credit problems caused by old accounts is to send a goodwill letter asking for their deletion.

Coyle attempted to do so but was unable to reach the loan holder.

You could file a dispute with the credit bureau in such instances. You can dispute anything you want to

Eric J. Ellman

You can begin the claim procedure online, by mail, or over the phone.

If you don’t like the result, you may add a 100-word comment to your paper. That might improve your chances of approval.

You may also like: How To Transfer Student Loans To Another Lender

Bonus: Prequlify and Compare The Best Refinance Lenders

Splash Financial Student Loan Refinance

Splash Financial Logo

  • Min. credit score: 650
  • Fixed APR: 1.99-5.79%
  • Min. Credit Score: 640 (or your co-signer)
  • Loan amounts: $25,001 to $500,000

Financeive Rate

CommonBond Student Loan Refinance Review

CommonBond Logo

  • Fixed APR:2.49-7.04%
  • Variable APR: 1.98-7.14%
  • Minimum Credit Score: 680

Financeive Rate

LendGrow Student Loan Refinance Review

Lend-Grow-Logo-March-21-1-1024x239-1

  • Fixed Rates: At 2.15% – 5.85% APR
  • Variable Rates: At 1.80% – 5.28% APR
  • Min. Credit Score: 680
  • $500 Gift

Financeive Rate

4. Work on your Side Hustle In the Meantime

Consider starting a side hustle if you need to improve your credit score before applying for another refinancing.

A side hustle might be a part-time job at a retail store, watching children, selling your items, or anything else in between.

In the meantime, your side hustle earnings might help you keep up with your student loan payments.

The additional income might help you fulfill the criteria for a student loan refinancing

If you didn’t make enough money with your regular job, extra cash might help you meet the requirement.  

Also, Increased income will allow you to pay off other debts faster, which is another approach to decreasing your debt-to-income ratio.

You may also like: Student Loans And Savings: 6 Questions To Ask

5. Take Serious Action To Get Accepted In the Next Time

Contact the credit bureaus as soon as possible if you find outdated or incorrect information on your credit report, and dispute it.

Make a strategy to address possible stumbling blocks if your financial status is the one that’s keeping you from moving forward.

For instance, If you have a lot of open credit lines, consider combining or shutting some of them.

Consider eliminating any outstanding debt before reapplying if you have a lot of debt.

Keep researching a lender’s co-signer release policy and working on your finances so you may reapply on your own in the future.

You may always refinance again without the co-signer once you’ve gotten back on your feet

Thomas

You may also like: 6 Ways To Solve Student Debt Crisis

Frequently Asked Questions

  1. Is it hard to get approved for student loan refinance?

    A credit check may be required, depending on your income and debt obligations. You'll need a credit score in the 600s to qualify for student loan refinancing.

  2. Can I be denied for student loan refinance?

    An incomplete refinance application is one of the most common reasons for rejection.

    If your lender doesn't have all of the information they've requested, they may send you a letter stating that your application is incomplete, or they may simply reject your refinance.