Financial technology companies have thrown their hats into the student loan ring, and this is great news for borrowers. The inclusion of fintech in this space allows for more options and approaches to student loans, specifically to repaying and refinancing them. Helping borrowers get back on track after they have been underserved by the traditional process is the specialty niche of these companies. A great way to take advantage of this new accessibility is to spend the grace period between graduation and the start of repayment to shop around opportunities to get the best deal on what is likely your largest financial obligation.
Typically, six months is the length of time that borrowers can expect to have between when they graduate and when their repayment period begins. You can research the do’s and don’ts before your student loan grace period ends to get ahead of the game and be sure that you are using this timeframe to your advantage. The main reason you do not want to sleep on this and put it off until later, is because figuring out your repayment plan while you do not yet have the mental and financial burden of having to write checks allows you to shop around.
One way that fintech can assist in this search is interest rates. Traditionally these rates are assigned based off credit history, which at the conception of your loan you probably had little to none of. These modern companies are using things like education levels, and their own algorithms to rate your credit worthiness in new ways. Interest rates are a huge component of the total amount you will pay throughout the lifespan of your loan, so why wouldn’t you want to lowest figure possible?
One of the biggest mistakes you can make during your grace period is inactivity. Simply allowing time to pass without taking any action towards learning about your loans, seeking out better deals, and when possible, beginning to save for when repayment begins puts you at a huge disadvantage. It is likely you have not looked at the specifics of your loan in the four or more years while you were earning your degree, a lot can change or be forgotten in that time frame.
These new financial startups do more than just offer competitive rates for refinancing themselves. Some of them offer virtual assistance to compare opportunities across multiple companies which gives you as the borrower the chance to use their established platform to conduct your research. Things like refi calculators are also readily available on these websites, with little to no commitment necessary to take advantage of their virtual tools. As you consider your options to take out new student loans, or refinance existing ones, advocate for yourself and when necessary seek the help of a professional. Spending your grace period doing your homework and taking advantage of all available resources is going to put you in a better position for long-term financial health as it relates to your student debt.