If you have student loans but no degree, managing your repayment can be more difficult, especially if you’re hoping to refinance. Most lenders require a degree for refinancing, but there are a few exceptions. Here’s where to start if you’re trying to refinance your student loans without a degree.
What is student loan refinancing?
Student loan refinancing is the process of consolidating current student loans into a single new loan with a private lender. This gives you an interest rate determined by your credit rating and history (and those of your co-signer, if you have one).
Although you can refinance federal and private loans, you lose all of your federal protections when you refinance loans you got from the US Department of Education. For example, you are no longer eligible for income-based repayment plans, federal deferment, or civil service loan forgiveness. But you might qualify for a lower interest rate than you’re currently paying, which might make refinancing worthwhile.
Can you refinance student loans without a degree?
Most lenders require borrowers to have a college degree in order to refinance student loans. However, each lender has different eligibility criteria, so the lack of a degree does not automatically exclude you from the possibility of refinancing. Lenders usually require a bachelor’s degree, but they may accept associate’s degrees or no degree as long as you are employed or have a regular source of income.
4 Lenders Who Will Refinance Student Loans For Borrowers Without A Degree
If you’re exploring refinancing options, compare a few different lenders to gauge where you qualify and what interest rates and terms are available to you. The lenders below don’t require a degree to refinance, so they’re good places to start your search.
As long as you have made at least 12 consecutive payments on your student loans and have at least $10,000 in eligible loans to refinance, you may qualify for a Citizens Bank refinance loan.
Citizens Bank has relatively low rates and five term options available. However, there are a few downsides to keep in mind: you can’t release a co-signer until you’ve made 36 payments on your new loan, and the minimum loan of $10,000 is quite high.
Although you may not need a degree to refinance your student loans with PNC, you will need to have at least $10,000 in student loans and 24 months of consecutive payments before you qualify for refinancing. A stable employment and income history is also required.
PNC offers a generous 0.5% discount for setting up autopay. However, borrowers without a degree are subject to high interest rates and a maximum loan of $25,000.
Discover will refinance as little as $5,000 and up to $150,000, making it one of the most flexible refinance lenders around. There are also no fees, not even late fees, and the cap rates are relatively low.
Keep in mind that Discover only has two repayment options – 10 or 20 years – which can be limiting. Additionally, postgraduate loans and loans taken out while you were enrolled less than half the time cannot be refinanced.
Massachusetts Education Finance Authority (MEFA)
MEFA refinance loans require you to have made at least six consecutive payments on time on the loans you wish to refinance, but this does not require a degree. This means you may qualify for refinancing sooner than with other lenders. Rates are low and you can find out if you prequalify without a credit check.
That said, MEFA doesn’t offer variable interest rates, so it’s not the right choice if you want the lowest interest rates on the market. You will also need to have at least $10,000 in eligible loans to qualify for refinancing with MEFA.
Other ways to repay your student loans
Refinancing is one way to pay off your student loans, but it’s not always the best option for everyone. Consider other repayment options, including:
- Income Oriented Repayment Plans: Available for federal student loans, income-based repayment plans base your monthly payments on your income and household size. So if you’re not working right now, your payments can be as low as $0 per month. The remaining balance on your loans is canceled after 20 or 25 years, depending on the plan you choose.
- Debt avalanche method: If you have a lot of student loans, the debt avalanche method can help you organize your debt. With this method, you’ll make regular payments on all of your loans, but put all the extra money into the loan with the highest interest rate. Do this until the loan is paid off, then switch to the loan with the highest interest rate until all of your loans are paid off in full. This strategy will reduce the amount you end up paying in interest on your loans.
- Federal Loan Consolidation: If you only have federal loans, consider getting a direct consolidation loan. Like refinancing, this combines all of your loans into one manageable payment, but it won’t cause you to lose access to federal benefits. You won’t save any money with this method, but it might be worth it if you don’t want to risk switching to a private lender.