It’s no secret that education has become more expensive in recent years. Some schools have even started offering student loans to fund their operating expenses—a trend that doesn’t seem like it’s going to stop anytime soon. But what if you’ve already graduated and find yourself in debt? Is refinancing student loans without a degree possible? The short answer is yes. “It is possible with certain lenders,” Experts like Lantern by SoFi say. But the longer answer might surprise you.
How Does Refinancing Work?
You can refinance your student loans with a private lender, like SoFi or others, or you can refinance your student loans with any federal lender. There are pros and cons to each type of refinancing.
With a private lender, you need good credit and an excellent income to qualify for the lowest interest rates. You’ll also have to pay origination fees when you close the loan (typically 1%–3%).
Federal loans don’t require good credit or high-income levels—you only need to show that you have a stable income that allows you to make monthly payments.
You won’t have to pay any origination fees when closing on these types of loans; however, they often come with increased interest rates compared to other refinancing options.
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Are you employed full-time, or are you a spouse of someone who is?
You can refinance without a degree if you’ve been employed full-time for two years and earn at least $25,000 a year. Refinancing will be possible if your credit score is good and you have the money saved up to make payments on your loan.
If it’s been more than five years since finishing school or if your work experience could be better (i.e., no full-time employment), consider working as an intern to build up some solid work history before applying for refinancing.
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Do you have dependents?
Do you have a dependent? If so, how many of them? What is a dependent? A dependent is defined as anyone living with you when you take out your loan and are under 24 years old.
That’s it! It doesn’t matter if they are your child—you can have any dependents living with you. However, if that person isn’t actually related to you (i.e., an aunt or uncle), he or she won’t be considered a dependent on your federal tax return.
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Can You Refinance Education Loans Without a Degree?
You can refinance your student loan without a degree, but you’ll need to meet the following requirements:
● You must be employed full-time and have dependents. There are some exceptions, including those who are self-employed or disabled.
● The loan must be in good standing with no delinquencies or defaults; otherwise, it won’t be eligible for refinancing.
Keep in mind that refinancing your education loans may not eliminate the debt completely—only lower it significantly.
The answer to the question “can you refinance education loans without a degree?” is yes, but it depends on your situation. If you are employed full-time or are a spouse of someone with dependents, you may be able to refinance your student loans with a cosigner or cosigner who has good credit.