While you can refinance student loans if you didn’t graduate, it isn’t as easy. Without a degree you will find that you have fewer options for refinancing. Most lenders will require you to graduate and have a degree to qualify. But why is that? And what are your options if you didn’t happen to graduate? Let’s break it down below.
When you plan on getting a college education, thoughts of dropping out may be the last thing on your mind. Unfortunately, some students drop out of college part way through. This could be for any number of reasons. Some simply cannot afford the ever-increasing cost of college tuition. Others are compelled to drop out because of family obligations such as caring for dependents or because of medical issues.
All of these may seem like valid reasons for dropping out. However, regardless of the reason, you’re stuck with the debt you’ve already taken on. Whatever student loans you’ve taken on up until the time you drop out still have to be repaid. You cannot get them written off just because you dropped out of college before getting your degree.
Under normal circumstances, refinancing is one of the best ways to manage your student loans. They help make the payments more affordable and also help you pay off your student debt faster. The only problem is finding a lender that allows you to refinance student loans if you didn’t graduate. Many lenders have a firm policy regarding this issue. They won’t allow you to refinance irrespective of your reasons for dropping out.
According to several surveys and research organizations, borrowers who don’t graduate will find it more difficult to find higher paying jobs. This makes them more likely to find the monthly loan payments unaffordable, increasing the risk of default. Most lenders don’t want to deal with this hassle even if they would like to help you out. They don’t want to take a risk on a borrower who can’t pay their debts back.
It may take more time to sift through the many lenders’ websites but you will come across a few that offer refinancing without a degree. They will however require you to meet some other criteria to be eligible for refinancing.
You will need to have a high credit score preferably in the high 600s or higher. The higher your credit score, the easier it is to get approved for refinancing. Having a good job with a steady income will also make it easier to get approved. In most cases, borrowers with a good score and healthy income will also qualify for a lower interest rate.
If you don’t qualify on your own credentials, you may still be able to refinance with a co-signer who meets the lender’s requirements. In this case, you will have to look for a lender that offers this option and also offers a cosigner release. This will allow you to release the cosigner and take on sole responsibility for your debt when your financial credentials improve.
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