Refinancing Law School Loans [Explained]

Being a lawyer is great but being in debt is the worst. Don't let the burden of debt hinder your dreams. Learn about refinancing your law school loans.

Updated by Jason Joy Manoj on 6th October 2020

Education isn’t getting any cheaper. Out of all the courses, getting a degree in law is one of the most expensive degrees. If you are one of those lawyers who took out a loan to help pay for law school and now you’re trying to figure out ways to go about your repayments then look no further.

You can make your payments more manageable and even pay off your loans faster. Sounds too good to be true? Well, it isn’t.

Refinancing your law school loans is worth it if you have a high income, an excellent credit history with a good record of on-time debt payments. Most lawyers who work in the private sectors easily fulfill the criteria to be met for refinancing. 

Here we will discuss what are the factors to help you decide on which lender to go for and much more.

Table of contents 

How to refinance your law school loans?

As discussed earlier refinancing your student loans is the best way to help manage your debt. Refinancing involves having a new loan with new interest rates and repayment options which helps you pay off your existing loans. Let us dig deeper into how you can go about refinancing your loans

Eligibility for refinancing

If you’ve decided to refinance your student loans, the first hurdle to overcome is to check for your eligibility. If you are earning a high income along with a good credit score by making on-time payments in the past. You will have a high chance of approval.

  • Check your lender's minimum credit score requirement which will usually range from 650 to 680. The higher the score the more likely your loans get approved

  • Check the eligible degrees for that particular lender. Some lenders might only refinance undergraduate degrees while others might refinance undergraduate and graduate degrees. You would not have to worry about loans as you can refinance both private and federal loans

  • Borrowers looking to refinance with a high income are more likely to get approved. As they show potential to repay the refinanced loan

Steps to refinance law school loans 

Here are the steps to take while you refinance your law school loans:

1) Compare the offers available to you - To compare what a lender is offering to you, first reach out to them and let them conduct a ‘soft pull’. 

This is nothing but checking what the borrower can prequalify for without actually requesting and evaluating his/her credit score. By doing this you have an idea of what to expect if you refinance with that particular lender. 

2) Select the plan that best suits you - After conducting your own set of preliminary applications and deciding on which lender to carry forward with. Although the lender with the lowest interest rate might sound tempting remember to consider other factors as well.

It is important to check whether you can avail of other benefits like an autopay discount, protection in the case of unemployment, and also the monthly payments to be made. While selecting a plan it is important to decide whether you want to lower your payments or if you lower the amount of time you are going to spend in debt. 

3) Remember the benefits lost and the ones gained while refinancing - It is important to understand that losing these benefits which might be useful later in the future. Benefits like income-driven repayment plans, forgiveness options, forbearance, and deferment will prove useful to a borrower during any potential crisis that can happen in the future. 

4) Contact the lender and check their web portal - Get all details before concluding to refinance with any lender, after you decide to refinance check their interest rates and choose the repayment options and always remember to make your payments until the lenders confirm your loans are refinanced else your loans can go to default. 

If you have your own private practice or in a firm where you can reasonably question career safety then it wouldn’t be advised to let go of these options.

Table of lenders 

Here is a list of potential lenders to choose from if you decide to refinance your law school loans. Few lenders may not allow cosigner options, therefore build a good credit score and have a good credit history to qualify to refinance with the respective private lender you choose to. 

Lender Known for Fixed APR Variable APR Minimum credit score
SoFi fast payoff 3.46-7.94% 2.14-7.94% not disclosed
splash financial fast payoff 3.48-7.02% 2.43-7.60% 670
Education loan finance customer service 3.29-6.69% 2.80-6.01% 680
PENFED credit union customer service 3.48-6.03% 2.74-7.48% 670
Earnest refinancing before graduation 3.45-7.49% 2.14-6.79% 650
Common Bond payment flexibility 3.46-8.24% 2.14-8.01% 660
Brazos meant for law students 2.49 - 4.60% 1.92 - 4.84% 720

As shown in the table, not all Lenders will disclose the minimum credit score required. The higher the credit score and better the chances to get your student loans approved. 

List of factors to help you decide on a lender

Since you now have an idea of who are the lenders it's time to pick one. Here is a list of factors to help you decide on a lender

1) Fast payoff -  This is an option to help a borrower get out of debt quickly. If you are looking to get out of debt through forgiveness then it is possible only after making 120 qualifying payments, but if you are looking to get out of debt faster and not wait after the required number of payments then you should choose a lender that will help you do the same. 

2) Customer service - This is a factor that is mostly overlooked. A borrower's repayment journey is quite stressful and when you have to deal with bad customer service it just adds on to the pressure. Fortunately for a borrower, you can choose a refinancing lender, and keeping customer service as a selection criterion can help relieve the borrower of any unwanted pressure. 

3) Refinancing before graduation - Most borrowers decide to refinance their student loans before graduating. Having a graduate degree is usually a basic requirement by most refinancing lenders but if you’ve taken the decision that you want to refinance before graduation then make this factor to look out for.

4) Payment flexibility - The future is inevitable and one can come across various financial difficulties while going about their repayment. With payment flexibility, a borrower can ease his repayment journey and give him opportunities to buffer any obstacles which might hinder him/her in making on-time payments. 

5) Interest rates and repayment options - Refinancing can be worth only if you receive a new loan with a lower interest rate and better repayment terms that suit your financial conditions. Henceforth, you must shop for a private lender who is willing to refinance your loans with a lower interest rate. 

Why should you refinance?

For those looking to ease their burden of debt, refinancing is a good option. Here are a couple of reasons why one should consider refinancing their loans.

1) Lower your interest rate - When you refinance your student loans you get an opportunity to get a lower interest rate. When you lower your interest rate than the payments to be made each month are reduced and you get to save more money. This saved money can be directed towards the principal amount.

2) Access to a more favorable repayment plan - To get a  favorable student loan repayment plan, it is advised to have an in-depth understanding of the available student loan repayment plans. So you can pick a plan which is best suited for your current financial situation. A repayment plan selected should be one that you can take advantage of. If you are a borrower looking to get out of debt faster then you can opt for a shorter repayment plan. Provided you have the income to manage it. If you are looking for lower monthly payments then go for a longer repayment plan. 

3) Get an opportunity to access hybrid and mix options - You can choose a longer repayment plan which lowers the monthly payments to be made. On top of these lower payments, you can add extra money to the monthly payments which will contribute to the principal amount. Thus you have reduced the monthly payments to be made and you get the option to pay extra to get out of debt faster.

In short, if you are looking to reduce your interest rate and get repayment terms that work best for you then refinancing is the right way to go about it.

Looking to refinance your student loans? Find the best student loan refinancing lenders

How deep in debt are you?

For someone pursuing law first comes three long years of law school and then comes studying for the bar. And if all goes well you will eventually land a job working long hours, paying back your loans will be the last thing on your mind. 

Whether you decide to go ahead for refinancing or you take another route at the bottom of it all you are dealing with debt. As per the Huffington post, the average law school graduate carries a  debt of $122,000. Based on this statistic you can take how far above or below you are in terms of the average. 

Law school graduates, when compared to other popular graduates, have a higher debt to income ratio. It is important to note that where you got your JD always plays a huge role in the potential salary one can earn which impacts the terms of refinancing you can qualify for.

Worried about your college tuition? Learn more about Best student loans

How much can you save if you refinance?

Refinancing can help make your debt manageable, help reduce your monthly payments but how much can you really expect to save with refinancing? You can compare and see yourself with a student loan refinancing calculator.

Here is a small example to help you get a better understanding, consider a borrower with student loans of $150,000 with an interest rate if 6.3% and a repayment term of 20 years.

You refinance these loans and get an interest rate of 5%, thus after refinancing you can potentially save $111 each month. With the total interest payment being $87,583 instead of the initial $114,185. 

The question that remains is whether or not the time put into refinancing will end up being worth it for you. You can find the answer to this question pretty quickly by plugging your student loan numbers into our Student Loan Refinancing Calculator.

Take the same example but instead of reducing the interest rate you opt to reduce the term of the loan, so instead of a 20-year loan you refinance to get a 10-year loan, then you pay a total interest amount of $52,104 instead of the initial $114,185. 

Refinancing can help a borrower in his/her repayment journey depending on what kind of help the borrower is looking for. If its a shorter repayment term, longer repayment term, or lowered interest rate. Be clear what you expect to get from refinancing your loans and always be aware of all the options you can go for before you take any decisions. 

Frequently Asked Questions

  • 1.How do know whether refinancing law school loans is right for you?

    Refinancing is very useful for money saving as your student loan gets an opportunity to get a lower interest rate. You also get a lot of opportunities and access to hybrid and mix options as well as more favorable repayment plans.

  • 2.Who can be your cosigner for refinancing law school loans?

    Your cosigner can be any of the parent, guardian, or an adult who is worthy and has a good financial status to take the responsibility of the loan liability. This helps your chances to get approved and helps to qualify better terms.

  • 3.What if your application for the refinancing law school loans gets disapproved?

    It may get disapproved if the application status does not match with the requirements of the lender. You can reapply with different creditworthy cosigners and make sure you go through all the terms and conditions.

  • 4.What happens if you cannot pay your law school loans?

     If you feel that your eligibility matches the status of forbearance you can go for it as this program is designed to protect the borrowers in the time of financial aid.

  • 5.What are the advantages if you refinance your law school loans?

     If you refinance your student law school loan you will get certain advantages such as your interest rates will be lower, you will get access to more repayment plans also you will get more opportunities to access hybrid and mix facilities.

  • 6.Which lender provides law school loans with the least credit score?

    Earnest provides refinancing before graduation with 650 credit score fixed APR of 3.45-7.49% whereas Brazos provides refinancing to all law students with the highest credit score of 720 with the fixed APR of 2.49 - 4.60%.