Jammie Proctor had made it. After taking more than 10 years off of school, he graduated with a bachelor’s degree in electrical engineering from Georgia Tech.
He was 36 years old. And he had more than $50,000 in student loans.
Though he had the same goals many of us do — to pay off his house and start investing in his future — he couldn’t move forward with those exorbitant loans hanging over his head.
Neither could John DePrato, who was $65,000 in debt from his bachelor’s and MBA. He was trying to build a house with his wife, but felt crushed by his hefty student loan bill: $850 a month.
Then, one day, things changed. Proctor and DePrato opened their inboxes to find emails from their alumni associations — emails about a new company that could help them refinance their student loans.
With just a few clicks, Proctor saved an estimated $6,000-$7,500 on his loans and will be debt-free in just seven years.
And DePrato cut his monthly payments in half — from $850 to $400 — freeing up money to continue building his new home.
Becoming debt-free and building a house are things we want for all our readers! And since we know student loan debt is such a burden for many of you, we had to learn more…
How These Graduates Saved So Much on Student Loans
So how did Proctor and DePrato do it? Through a student loan refinancing site called Credible.
Unlike other refinancing companies, which give you one offer — take it or leave it — Credible is an independent student loan marketplace, not a lender.
Here’s how it works.
You give Credible some basic information — your name, date of birth, where you went to school, how much you earn, how much you want to borrow or refinance, and your monthly housing costs.
Within a few seconds, Credible determines which lenders you’d be a good fit for, and shows you a simple, personalized dashboard with the best rates for you to compare.
“It’s like a Kayak or a Zillow for student loans,” says Michael Fishel, a Houston attorney who graduated from law school in 2012 with $135,000 in loans. “It’s brilliant.”
When he tried Credible, he “instantaneously got a ton of offers,” he says. As with most businesses, that competition led to savings for the consumer.
Over the lifetime of his loan, Fishel estimates he’ll save $10,000-$15,000 — money he’s putting directly into a 529 plan for his newborn daughter.
And that number isn’t uncommon. The average Credible user has $60,000 of loans and an interest rate of 7%… and once they refinance with Credible, an average savings of $18,668 over the life of their loans.
Though Proctor, the engineer, will likely save less than that — around $7,000 — he appreciates how easy the process was. All you have to do to browse rates is fill out Credible’s 15-question pre-qualification form. Checking rates won’t affect your credit score, either.
“I was very impressed with [the fact] they did the heavy lifting for me,” he explains. “I didn’t have to go out and seek all of these loan providers to do my refinancing. I could just go through, look at all the offers and figure out which one was most suitable for me.”
That customization is important because everyone has different goals. DePrato, for example, wanted to free up cash for the construction of his house — so he refinanced from a 10-year loan to a 20-year loan. Though he’ll pay more in interest over the lifetime of his loan, it was the best option for him and his wife.
“Maybe I’m paying out a little bit more total interest,” he says, “but it made sense for what we’re doing right now.”
Who Can Refinance Student Loans With Credible?
Whether you want to pay less interest or lower your monthly payments, you might wonder whether Credible’s right for you.
Like any loan, not everyone will receive offers under this program. To help you determine whether you’re a good candidate, here are the factors Credible and their financial partners consider:
1. Do You Have Good Credit?
Lenders use your credit score to determine your risk level; good credit score means low risk, which means lower interest rates.
If your credit is poor or limited, you may want to look into a cosigner (see number four), or work on repairing your credit first.
2. Is Your Debt-to-Income Ratio Low?
Don’t fret if you have a lot of debt — as long as your income is also high. Many successful Credible users are high-earners in deep debt due to expensive graduate degrees.
3. Do You Have Work Experience?
How much real world work experience do you have? The Credible service generally works best for people with a few years of post-bachelor’s work experience, or a graduate degree in an in-demand field.
4. Might You Need a Co-Signer?
If you’re recently out of college and your credit history, income or work experience is limited, partnering with a qualified co-signer can reduce your rates.
Should You Give Credible a Shot?
If you’re struggling with your student loan bill each month, we highly recommend you look into refinancing. Because interest rates are so low right now, you could end up saving a bundle of cash.
For the guys we talked to, it has made a huge difference.
“Especially with our generation, it’s tough to save,” says Fishel. “This gives an opportunity for people my age to start saving right away — because the burden of all your other bills, especially student loans, isn’t as bad… There are a lot of people in my shoes who simply don’t know about this and so much money can be saved.”
Your Turn: Would you consider refinancing your student loans?
Sponsorship Disclosure: A huge thanks to Credible for working with us to bring you this content. It’s rare that we have the opportunity to share something so awesome and get paid for it!