How Student Loan Refinancing Works and What to Know
If you took out a student loan in your home country to study in the U.S., you might be wondering if there’s a way to reduce your overall loan costs and pay it off more easily. The answer is yes – through student loan refinancing.
Refinancing your student loan in the U.S. can lower your interest rate and make repayment more manageable. Instead of sending payments to India or another country, you can pay back your new loan in the U.S.
Here’s a look at what student loan refinancing is and what Indian and other international students need to know before applying.
What is student loan refinancing?
Student loan refinancing means taking out a new loan to replace your existing loan. The goal is for the new loan to have a lower interest rate or better terms so you can reduce your overall loan costs.
When you refinance, your new lender pays off your original loan. Then, you start paying back the new loan in its place.
When you refinance with MPOWER Financing, you can pay back your new loan in the U.S. You won’t have to keep sending money overseas and can say goodbye to exchange rates and international banking fees.
When can you refinance your student loans?
You can often refinance your student loans after you graduate and have started earning an income. Lenders want to see that you have:
- A job (or job offer) with a steady income
- A valid U.S. visa and residence status
- A degree from an accredited university
MPOWER Financing specializes in student loan refinancing for students from India and other countries. You’re eligible to refinance with MPOWER if:
- You live in the U.S.
- You’ve worked in the U.S. for at least three months following graduation
- You have a valid visa, including H1-B or F-1 while on OPT or are a DACA recipient, refugee or asylum seeker
- You have at least 12 months of work authorization
The only option for Indian borrowers: MPOWER Financing
MPOWER Financing is the only lender in the U.S. that offers refinancing for Indian education loans. U.S. banks don’t refinance loans from Indian banks or NBFCs like SBI, Axis or HDFC Credila.
With MPOWER, you can:
- Refinance the student loans you borrowed in India
- Qualify without a cosigner or collateral
- Get a fixed, inflation-proof interest rate that won’t ever increase
- Build your U.S. credit history with on-time, recurring payments
- Release a cosigner or collateral so your family assets are protected
MPOWER Financing has a team of experts to support international students and professionals in their educational journey in the U.S.
MPOWER is the only U.S.-based lender offering refinancing for Indian borrowers who want to reduce their overall loan costs and simplify their debt.
Why should you consider refinancing?
There are several reasons you might want to refinance your international student loans. Here are the main ones:
- Your student loans have a high interest rate, and you want to lower it to save money.
- Your variable interest rate keeps increasing and you want to switch to a fixed rate.
- You’re living and working in the U.S., so it would be easier to pay back your student loan in the U.S. instead of sending money overseas.
- You want to release a cosigner or collateral from your loan and assume responsibility for it yourself.
- You’re eager to build a good credit score in the U.S.
Refinancing your student loans in the U.S. could help you achieve all these goals.
What are the advantages of refinancing?
Here’s a closer look at the advantages of refinancing your international student loans.
You might get a lower, fixed interest rate
If your current loan has a high interest rate, you might get a lower rate through refinancing. Reducing your interest rate can lower your monthly payments. It might also reduce the overall costs of your loans by thousands of dollars.
Plus, you can switch from a variable to a fixed interest rate. A variable rate is unpredictable and could cost you a lot over time. With a fixed rate, you know your borrowing costs upfront.
Your payments will stay the same from month to month, and you won’t have to worry about inflation or your interest rate going up over time.
You can get new repayment terms and monthly payments
Student loan refinancing lets you change your repayment term. You might get a shorter term to pay your loans off faster. Or you can get a longer term so your monthly payments are more affordable.
A lower monthly payment could improve your cash flow so you have more money each month for living expenses and other costs.
Keep in mind that a longer repayment term could increase your long-term interest costs. But depending on your financial situation, you might be comfortable with this trade-off.
Refinancing will simplify the repayment experience
You can pay your loan back in the U.S., which will be much easier than sending money to a bank in India, for example. You won’t have to convert USD to Rupee to send to India for EMI payments or pay fees to send money abroad.
You can release an existing cosigner or collateral
Another key benefit of refinancing education loans is removing a cosigner or collateral from your original student loan agreement. MPOWER Financing offers refinancing for international students without requiring a cosigner or collateral.
You can assume full responsibility for your education loans and remove that financial burden from your family members.
You can build your credit in the U.S.
By making on-time, recurring payments on your refinanced student loan in the U.S., you’ll build your U.S. credit score. A good credit score can make it easier to take out a loan, rent an apartment or pursue other financial opportunities in the U.S.
Refinancing your international student loans with MPOWER
MPOWER Financing is the only lender in the U.S. that refinances Indian and other international student loans without a cosigner. With MPOWER, you can access:
- Fixed interest rates that make it easier to budget for your payments
- Simple, transparent repayment terms with no hidden fees
- A chance to build a positive U.S. credit history while you pay back your loan
If you want to lower your interest rate, simplify repayment and start building your credit in the U.S., refinancing through MPOWER could be a step in the right direction.
Check your eligibility today to see if you qualify for MPOWER’s international student loan refinancing program.
