A Master of Business Administration (MBA) can open doors for your career. This is especially true if you graduated from a top-ranked business school. Your tuition probably cost you $70,000 or more per year.
Click here to know about the Best MBA Student Loan Refinance Options Of 2024!
With numbers like these, it’s essential to know how to pay off MBA student loans. The MBA student loan refinance is one way to deal with all that debt. You might be surprised to learn about your other options.
When to use MBA student loan refinance options
It is possible to refinance student loans online or at your local bank or credit union. You receive a new private student loan after the lender pays off your student loans. As a result, you will have one payment and a new loan term.
When refinancing, your goal is typically to pay off your loans aggressively. To pay off your loans as quickly as possible, you may also want to opt for a shorter loan repayment term in addition to a lower interest rate.
The hard part is determining whether refinancing MBA loans will work for you. Refinancing private student loans for a better rate is always something you should consider if you have them. However, federal student loans are a different story.
Pros and cons of federal MBA student loan refinance
Refinancing federal student loans has some pros and cons. Refinancing your MBA loans has the following advantages:
- Interest payments could be reduced. Graduate students are charged 5.28% interest on Direct Unsubsidized Loans. Grad PLUS loans and Parent PLUS loans have higher interest rates at 6.28%. If you refinance your student loans, you may be able to get a much lower interest rate.
- You’ll only have to manage one monthly payment. Consolidating your debts into one new loan could simplify your financial management.
- Release of cosigner. Refinancing may help you release your cosigner if you could not remove them when you obtained your original loan.
The better the interest rate, the more money you’ll have in your pocket. It’s easier to deal with one payment, but that doesn’t mean you won’t miss out on some things. Here are a few cons of refinancing your MBA student loans:
- You will lose your federal borrower protections. You may be able to take advantage of some of these benefits if you are experiencing financial difficulty, such as deferment and forbearance.
- The income-driven repayment plan (IDR) will not be available to you.
- A credit check will be required. In order to qualify for the best rates, you must have a good credit score.
According to this general advice, you can still save more money by refinancing your MBA loans into private loans. A payment hack that only applies to federal loans could align better with your career goals. Take a look at an example of how sticking with your federal loans can save you money, even at a higher interest rate.
Also Read: Best Online MBA Programs for International Students in 2024
Top 5 MBA Student Loan Refinance
College Ave
College Ave is an online lender that offers loan products for many different types of degrees, including a customizable MBA loan that’s available to students in business school. Here’s more information on College Ave’s MBA loan:
- Fixed rates: (APR) 5.05% — 14.49%
- Varirable rates (APR): 5.59% — 14.49%
- Repayment terms: 5, 8, 10, or 15 years
- In-school repayment options: Deferred, interest-only payments, $25 monthly payments, and full principal and interest payments.
- Grace period: 9 months
- Cosigner release: Available after making more than half of scheduled payments
Earnest
Earnest is an online lender offering student loans for undergraduate and graduate school, including business school. Here are the key features of Earnest’s MBA loan:
- Fixed rates (APR): 4.42% — 14.30%
- Variable rates (APR): 5.89% — 15.97%
- Repayment terms: 5, 7, 10, 12, or 15 years
- In-school repayment options: Deferred, interest-only payments, $25 monthly payments, and full principal and interest payments
- Grace period: 9 months
- Cosigner release: Earnest does not have any cosigner release options, but borrowers who are eligible to refinance can take out a new loan without a cosigner
Ascent
Ascent is an online student lender offering a specific graduate student loan for students attending business school. Borrowers can apply for this loan with or without a cosigner depending on whether or not they meet the eligibility requirements. Here is more information about the Ascent MBA Student Loan:
- Fixed rates (APR): 5.83% — 16.16%
- Variable rates (APR): 7.17% — 16.08%
- Repayment terms: 7, 10, 12, or 15 years
- In-school repayment options: Deferred, interest-only payments, and $25 monthly payments
- Grace period: 9 months
- Cosigner release: Available after 12 months of consecutive on-time payments and meeting eligibility criteria
Also Read: Latest LendKey student loan refinance review (2024)
Sallie Mae
Sallie Mae offers a wide variety of student loans, including MBA loans. Borrowers can have up to 100% of their costs covered, including tuition, fees, books, and living expenses. There is no aggregate borrowing limit for MBA students.
- Fixed rates (APR): 5.25% — 14.48%
- Variable rates (APR): 6.37% — 15.97%
- Repayment terms: Up to 15 years
- In-school repayment options: Deferred payments, interest-only payments, and $25 monthly payments
- Grace period: 6 months
- Cosigner release: Available after 12 months of on-time consecutive payments
Frequently asked questions about MBA student loans
Which MBA student loan is the best?
Depending on your qualifications, you can qualify for different types of MBA student loans. Federal loans generally offer more repayment options and extra benefits, such as longer deferment periods. If you have the ability to pay off the loan quickly, a private loan with a lower interest rate may be a better option.
Is a cosigner required for MBA student loans?
Federal student loans usually don’t require a cosigner. A negative event on your credit history may require you to add an endorser, which is similar to a cosigner, if you are considering Grad PLUS loans.
A cosigner may be required if you are taking out private student loans unless you have a good credit score and a steady income.
Conclusion
You can refinance your education loans from private lenders if you want to combine all your debts and find more flexible repayment terms. However, you may lose your federal student loan benefits.
Be sure to compare your existing loan with the refinancing program. Apply only if you find some benefits and better repayment options.
