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The 25 to 34 year olds make up the largest cohort of student loan borrowers with a total of 14.8 million borrowers. The average person in this age group has a student loan of $ 33,817.56 for the fourth quarter of 2020, according to statistics from US Department of Education data.
While that number is just above how much the average student loan borrower of all ages pays ($ 39,351), it’s more than double what the 24-year-old cohort has to deal with (their average balance is $ 14,807.69 -Dollar).
The increase in outstanding debt is partly due to the additional years of interest paid by 25-34 year olds compared to those under 25, as well as additional loans they may have taken out to fund additional schooling.
If you’re in the 25-34 age group and struggling with five-digit debt (or more), you can feel reassured knowing that it’s not too late to get it under control. Ahead, Select offers some advice on managing your student loans.
This is what 25 to 34-year-old student loan borrowers should be aware of
Your mid-20s and early 30s mark a significant chapter in your adulthood – whether you are advancing in your career or getting married and starting a family – and these are good times to prioritize a plan to pay off your college debt.
For example, as you grow in your career, your salary may allow you to do more than just make the minimum payment on your monthly student loan bill. If you’re getting married and preparing to start a family, now is the time to focus on reducing your student loan debt before tackling competing expenses like a monthly mortgage payment and childcare.
One way to pay off your student loans faster is to refinance them through a private lender. Borrowers with good credit are likely to be able to get a lower interest rate and also choose their new repayment term.
If you have the extra funds to set aside more cash to pay off your debt, you can cut your repayment term from 10 to five years, for example, or whatever makes sense for your finances and your outstanding loan balance. While a shorter timeframe would mean higher monthly payments, a lower interest rate and shorter loan term can help you pay off your debt faster and save money in the long run.
Select the best student loan refinancing options to make your search easier. They all offer a wide range of loan terms and interest rates to choose from, have no application or commitment fees, have no prepayment penalties, and offer flexible repayment terms, payment options for economic hardship, and interest rate cuts on automatic payments. (For more information on how we selected the best student loan refinancing companies, please see our methodology.)
We do not recommend that federal student loan borrowers refinance while the payment and interest freeze is in place, currently until September 30, 2021. When the federal student loan hiatus is over, consider what state coverage you will lose if you opt for a refinancing decide privately. Private student borrowers, on the other hand, should consider refinancing if their interest rate is high in this low-interest environment.
To determine which student loan refinancing companies are best for borrowers, Select analyzed and compared private student loan financing from national banks, credit unions, and online lenders. We’ve narrowed our ranking by only considering those that offer low student loan refinancing rates and prequalification tools that don’t compromise your creditworthiness.
While the companies we selected in this article are consistently considered to be some of the more competitive refinancing rates, we also compared each company for the following characteristics:
- Wide availability: All of the companies on our list refinance both government and private student loans, and each offer a variable and fixed rate to choose from.
- Flexible loan terms: Each company offers a variety of financing options that you can customize depending on your monthly budget and the repayment time of your student loan.
- No formation or registration fee: None of the companies on our list will charge borrowers an upfront fee to refinance their loan.
- No early repayment penalties: The companies on our list do not charge borrowers any prepayment fees.
- Optimized application process: We have made sure that companies offer a fast online application process.
- Options for co-signers: Each company on our list will allow a co-signer if the direct borrower does not qualify for their own refinancing.
- Autopay discounts: All of the companies listed already include Autopay discounts in their advertised tariffs.
- Private student loan protection: Although you will lose federal student loan benefits if you refinance, every company on our list offers some sort of protection for borrowers in dire financial straits.
- Credit sizes: The above companies refinance loans come in a range of sizes, from $ 5,000 to $ 500,000. Each company announces their respective loan sizes, and completing a pre-approval process can give you an idea of your interest rate and monthly payment.
- Credit requirements / eligibility: We considered the required minimum credit scores and income levels, when that information was available.
- Customer service: Every company on our list offers customer service via phone, email, or secure online messaging. We also selected lenders with an online resource hub or advice center so you can learn about the student loan refinancing process.
After reviewing the above features, we sorted our recommendations based on the best overall refinancing needs, have a co-signer, apply for adequate credit, refinance parenting and medical school loans.
Note that personal student loan refinancing rates and fee structures are not guaranteed forever; they are subject to change without notice and often fluctuate in line with the Fed’s rate. Choosing a fixed APR when refinancing guarantees that your interest rate and monthly payment will remain constant throughout the life of the loan.
Your refinanced interest rate depends on your creditworthiness, income, debt-to-income ratio (DTI), savings, payment history, and general financial health. To refinance your student loans, lenders run a hard loan application and request a full application, which may require proof of income, identity verification, proof of address, and more.
Note to editors: The opinions, analyzes, reviews or recommendations expressed in this article are solely those of the Select editors and have not been reviewed, approved or otherwise endorsed by third parties.