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There are many less 50 to 61 year olds who still have student debt compared to younger age groups, but those with high average balances.
According to statistics from the U.S. Department of Education’s fourth quarter 2020 data, borrowers in this age group have an average balance of $ 42,290.32, which is almost as much as the highest average debt level. high of $ 42,373.23 borne by the age group below them (35 to 49 years-old).
But while these two age groups, 35 to 49 and 50 to 61, have similar average balances, the total number of loan borrowers drops dramatically after age 49. There are only 6.2 million borrowers in the older age group, compared to 14.2 million borrowers in the younger age group.
The numbers illustrate a scenario where borrowers find themselves at different ends of the spectrum. There are those who have fully paid off their student loans before their 50s – signaled by the sharp drop in borrowers – and also those who still have a good chunk of their debt to pay off with all the interest accrued over most of their age. adult – signaled by the high average debt balance.
The data also takes into account borrowing parents who have taken out student loans in their own name to help fund their children’s college education.
Refinance student loans in your 50s
Whether you’re paying off your own student loans or managing the parent PLUS loans you’ve taken out for your child, refinancing with a private lender can help you get rid of debt once and for all.
Since you probably had your loans for years before the age of 50, you may have already refinanced several times. The good news is, you can refinance your student loans as many times as you want. You can take advantage of your age, too: If you’ve built up a history of on-time loan repayments over all these years, you may have a higher credit rating and be in a better position to benefit from a lower interest rate.
Before refinancing: With the current freeze on federal student loan payments and interest, we do not recommend that you consider refinancing Federal or Parent PLUS loans until forbearance ends on September 30, 2021. Federal loan refinancing removes all Unique government protections like deferral and forbearance, income repayment plans, forgiveness programs, and blanket student loan cancellation.
Refinancing of private student loans in a context of declared inflation
While interest rates remain low, now is the time to lock in a lower refinance rate on your private student loans ahead of the rise in inflation cause rates to rise, which is expected to occur in late 2022.
To get a low rate today, you need to choose a refinance lender that offers fixed interest rates. Select private student loan financings analyzed and compared from national banks, credit unions and online lenders to rank your best options. All of the companies on our best deals list offer a variable and fixed refinance interest rate, as well as low refinance rates, flexible loan terms, no up-front refinancing fees or prepayment penalties. and protection against financial hardship. Learn more about our methodology for choosing the best student loan refinancing companies below.
Refinancing with a fixed rate versus a variable rate means that you will pay the same low interest rate for the remaining term of the loan. It’s even better for your portfolio if your salary keeps pace with future inflation, so you earn more and earn less interest. If you opt for a refinanced variable rate loan, its rates are subject to change. When inflation is likely to trigger rate hikes, variable rate student loans will also experience higher interest rates.
To determine which student loan refinancing companies are best for borrowers, Select analyzed and compared private student loan financings from national banks, credit unions, and online lenders. We’ve refined our ranking by only considering those that offer low student loan refinance rates and prequalification tools that don’t hurt your credit.
While the companies we have chosen in this article consistently rank among the most competitive interest rates for refinancing, we also compared each company on the following characteristics:
- Wide availability: All of the companies on our list refinance both federal and private student loans, and they each offer variable and fixed interest rates.
- Flexible loan terms: Each company offers a variety of financing options that you can customize based on your monthly budget and how long it takes to pay off your student loan.
- No creation or registration fees: None of the companies on our list charge borrowers an upfront “set-up fee” for refinancing your loan.
- No early repayment penalties: The companies on our list do not charge borrowers for prepayment of loans.
- Simplified application process: We made sure companies offered a fast online application process.
- Co-signer options: Each company on our list allows a co-signer if the direct borrower does not qualify for refinancing on their own.
- Automatic payment discounts: All of the companies listed already calculate automatic payment discounts in their advertised rates.
- Private student loan protections: While you lose the benefits of the federal student loan when you refinance, each company on our list offers some type of protection for borrowers in times of financial difficulty.
- Loan sizes: The above companies refinance loans in a range of sizes, from $ 5,000 to $ 500,000. Each company advertises their respective loan amounts, and completing a pre-approval process can give you an idea of your interest rate and monthly payment.
- Credit / eligibility conditions: We took into consideration the minimum credit scores and income levels required if this information was available.
- Customer service: Each company on our list provides customer service that is available by phone, email, or secure online messaging. We have also opted for lenders who have an online resource center or advice center to help educate you on the student loan refinancing process.
After reviewing the features above, we’ve sorted our recommendations by best for overall refinancing needs, having a co-signer, applying with a fair credit score, refinancing parent loans, and medical school loans.
Note that the rates and fee structures for refinancing private student loans are not guaranteed forever; they are subject to change without notice and they often fluctuate with the Fed rate. Choosing a fixed rate APR when you refinance will ensure that your interest rate and monthly payment will remain consistent throughout the life of the loan.
Your refinance rate depends on your credit rating, income, debt-to-income ratio (DTI), savings, payment history, and overall financial health. To refinance your student loan (s), lenders will conduct a serious credit check and request a full application, which may require proof of income, identity verification, proof of address, etc.
Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.