If you’re concerned about your student loan debt affecting your chances of buying a home, you’re not alone. In fact, over a quarter of student debt holders say their debt has impacted their decision or their ability to purchase a home. Here’s what you need to know about buying a house with $100k student loan debt:
The good news: around 40% of first-time homebuyers have student loan debt. So, while it may make qualifying for a mortgage loan a bit more challenging, buying a house with student loan debt is completely possible.
Can I Buy a House with Student Loan Debt?
When people say, “buying a house with student loan debt is hard,” what they’re often referring to is the mortgage loan process. Like private student loans, you must be a creditworthy borrower to secure a mortgage loan with a competitive interest rate.
Unfortunately, student debt can impact how creditworthy you appear to a lender. That said, there are several things you can do to appear more creditworthy, and thus improve your chances of getting approved for a mortgage loan.
Work on Improving Your Credit Score
One of the most important factors in securing a mortgage loan is your credit score. Simply put, lenders want to be confident you’re a trustworthy borrower prior to lending to you. So, by examining your credit score, they can typically get an idea of whether or not you are.
>> MORE: What credit score is needed for a student loan?
Luckily for you, student loan debt typically won’t drag down your credit score too much, unless you’ve been missing payments.
If there are other aspects of your financial background that are bringing your credit score down, however, taking the time to improve it can help you qualify for a competitive rate.
Here are a few things you can do to improve your credit score:
- Pay all your bills on time. Payment history makes up roughly 35% of your credit score. So, as you can imagine, late payments can take a serious toll on your score. Therefore, if you’re struggling to pay your credit card bill on time, consider opting in to automatic payments. Rather than making your payments manually, your credit card company will pull the payment directly from your checking account. This will ensure payments are always made on time.
- Limit new credit accounts. Applying for a new line of credit will result in a hard inquiry, which will temporarily hurt your credit score. Therefore, if you plan on applying for a mortgage loan in the near future, hold off on applying for any other new lines of credit.
- Keep old credit card accounts open. Credit history is another important factor in determining your credit score. Each time you open a new line of credit, it adds to the length of your credit history. If you have a credit card you opened a while ago that you no longer use, keep it open. Closing it will shorten the length of your credit history which, in turn, can reduce your overall credit score.
- Check your credit report. Several credit card companies, banks, and other financial institutions offer free credit reports. If yours don’t, consider using the Annual Credit Report to get a free copy of yours. By viewing your full credit report, you can check for unknown errors, fraud, or potential identity theft that could be impacting your score.
Lower Your Debt-to-Income Ratio
When mortgage lenders evaluate you as a potential borrower, they’ll examine your debt-to-income ratio (DTI). Your debt-to-income ratio compares how much you owe to how much you earn each month. Your DTI is used to assess your ability to make a mortgage payment on top of other debts.
There are two types of debt-to-income ratios to be aware of: front-end ratio and back end-ratio.
A front-end ratio is all of your housing expenses divided by your pre-tax income. When applying for a mortgage loan, lenders will consider your future monthly mortgage payment, including expenses such as property taxes and homeowners insurance, to calculate your housing expenses.
For example, if you make $8,000 pre-tax per month, and your future housing expenses are $3,000 per month, your front-end debt-to-income ratio would be 37.5%.
[3000 ÷ 8000 = 0.375 → 37.5%]
A back-end ratio is all of your monthly debt payments divided by your pre-tax income. In addition to the monthly housing-related expenses, a back-end debt-to-income ratio will factor in debt payments such as student loans, credit cards, and auto loans.
For example, if you make $8,000 pre-tax per month, and your future housing expenses are $3,000 per month, but you have an additional $250 student loan payment and $400 auto loan payment, your back-end debt-to-income ratio would be 45.6%.
[3650 ÷ 8000 = 0.456 → 45.6%]
When applying for a mortgage loan, lenders will pay closer attention to your back-end ratio as it provides a more holistic view of monthly expenses.
What Debt-to-Income Ratio is Needed to Buy a House?
Many mortgage lenders follow what is referred to as the “28/36 rule,” also called the “28/36 qualifying ratio.” The rule suggests that you should spend no more than 28% of your monthly gross income on housing expenses, and no more than 36% on all of your debt expenses, including debt like student loans and credit cards.
That means your front-end ratio should be no more than 28%, and your back-end ratio should be no more than 36%. However, some mortgage lenders work with borrowers with higher DTIs. In fact, Rocket Mortgage recommends aiming for a DTI of 50% or less to qualify for a conventional mortgage loan. That said, the lower your DTI, the better.
Tips to Lower Your Debt-to-Income Ratio
If you have a high student loan balance relative to your income, or vice versa, consider increasing your income or refinancing your student loan.
>> MORE: Should I Refinance my Student Loan.
Use Sparrow to help you find the best refinance rates. The Sparrow application shows you personalized rates from our 17+ partnering lenders. You can then compare refinance rates side-by-side, helping you narrow down your options to see which is best for you.
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ASLA
Minimum credit score
Fixed APR
Loans are made available by the Arkansas Student Loan Authority (ASLA), a division of the Arkansas Development Finance Authority, which is an Arkansas state government agency.
Loan terms are subject to change. All loans are subject to approval based upon underwriting guidelines determined by ASLA and its advisors. Interest rates for approved loans will be based upon the borrower’s credit history as reported under the FICO credit scoring system.
Non-Arkansas residents must attend an eligible institution of higher education within the state of Arkansas to be eligible for an ASLA loan. Arkansas residents may attend an eligible institution of higher education within or outside of the state of Arkansas to be eligible for an ASLA loan.
For more information related to the Arkansas Student Loan Authority and its loan products, visit www.asla.info.
Variable APR
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Brazos
Minimum credit score
Fixed APR
It is recommended that you utilize scholarships, grants and other federal student loans, such as the Federal Direct Student Loans, available to you before you use a Brazos Student Loan.
By providing your email, you are consenting to receive periodic emails from Brazos regarding the Brazos Student Loan, as well as general student loan information, information on other Brazos loan products or services, and other information we believe you will find informative and helpful.
Rates and terms provided as a result of a soft credit check do not mean you have been approved for the Brazos Student Loan but will give you an indicator of if, and on what terms, you may qualify. In order to qualify and be approved for the loan, you must apply, have a hard credit pull performed, and provide all necessary documents and information. A hard credit inquiry may impact your credit score.
Credit Review and Approval. If you choose to apply for a Brazos Student Loan, Brazos Parent Loan, or Brazos Refinance Loan and continue your application past the pre-credit eligibility stage, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for Brazos to be able to issue you a Brazos loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. The initial credit review is based on review of all the information you and your cosigner (if applicable) provide during the application process and the information obtained from your credit report(s). If you pass the initial credit review, you will need to provide acceptable documentation such as your income verification before the final loan approval.
Brazos Education Lending Corporation (Brazos) is a part of a group of several non-affiliated nonprofit companies that are all managed by The Brazos Higher Education Service Corporation, Inc. and are commonly referred to as the Brazos Managed Companies. The first of the Brazos Managed Companies was organized in 1975 in Waco, Texas, as a secondary market for student loans. Since that time, the Brazos Managed Companies have, on a combined basis, served an estimated 2 million student borrowers and have helped fund an estimated $30 billion in student loans.
Variable APR
It is recommended that you utilize scholarships, grants and other federal student loans, such as the Federal Direct Student Loans, available to you before you use a Brazos Student Loan.
By providing your email, you are consenting to receive periodic emails from Brazos regarding the Brazos Student Loan, as well as general student loan information, information on other Brazos loan products or services, and other information we believe you will find informative and helpful.
Rates and terms provided as a result of a soft credit check do not mean you have been approved for the Brazos Student Loan but will give you an indicator of if, and on what terms, you may qualify. In order to qualify and be approved for the loan, you must apply, have a hard credit pull performed, and provide all necessary documents and information. A hard credit inquiry may impact your credit score.
Credit Review and Approval. If you choose to apply for a Brazos Student Loan, Brazos Parent Loan, or Brazos Refinance Loan and continue your application past the pre-credit eligibility stage, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for Brazos to be able to issue you a Brazos loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. The initial credit review is based on review of all the information you and your cosigner (if applicable) provide during the application process and the information obtained from your credit report(s). If you pass the initial credit review, you will need to provide acceptable documentation such as your income verification before the final loan approval.
Brazos Education Lending Corporation (Brazos) is a part of a group of several non-affiliated nonprofit companies that are all managed by The Brazos Higher Education Service Corporation, Inc. and are commonly referred to as the Brazos Managed Companies. The first of the Brazos Managed Companies was organized in 1975 in Waco, Texas, as a secondary market for student loans. Since that time, the Brazos Managed Companies have, on a combined basis, served an estimated 2 million student borrowers and have helped fund an estimated $30 billion in student loans.
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College Ave
Minimum credit score
Fixed APR
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
*The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 03/01/2023. Variable interest rates may increase after consummation.
This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 09/01/2023. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
Variable APR
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
*The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 03/01/2023. Variable interest rates may increase after consummation.
This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 09/01/2023. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
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Earnest
Minimum credit score
Fixed APR
Auto Pay Discount Disclosure
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Student Loan Refinancing Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.21% APR to 10.04% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.74% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. Sparrow receives compensation from Earnest on a per-funded loan basis.
Student Loan Refinancing Loan Cost Examples
These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at hello@earnest.com, or call 888-601-2801 for more information on our student loan refinance product.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit Lending Licenses – Earnest for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.
One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.
© 2022 Earnest LLC. All rights reserved.
Variable APR
Auto Pay Discount Disclosure
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Student Loan Refinancing Interest Rate Disclosure
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.21% APR to 10.04% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.74% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. Sparrow receives compensation from Earnest on a per-funded loan basis.
Student Loan Refinancing Loan Cost Examples
These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at hello@earnest.com, or call 888-601-2801 for more information on our student loan refinance product.
Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit Lending Licenses – Earnest for a full list of licensed states. For California residents (Student Loan Refinance Only): Loans will be arranged or made pursuant to a California Financing Law License.
One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries are not sponsored by or agencies of the United States of America.
© 2022 Earnest LLC. All rights reserved.
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EDvestinU
Minimum credit score
Fixed APR
APR or “annual percentage rate” is a calculation of what the loan will cost, taking into consideration interest, fees and length of loan. Accordingly, the APR is subject to increase or decrease due to factors such as changes in the interest rate of variable rate loans, changes in principle due to the capitalization of interest or presence of a cosigner.
Variable APR rates may increase or decrease depending on fluctuations in the 30-day average SOFR Index. Monthly interest rate accrual is based on the published 30-day average SOFR Index rate as of the second to last business day of the previous month plus your applicable margin. If the 30-day average SOFR Index is negative, it will be deemed to be equal to zero.
Lowest rate requires application with a cosigner and 0.50 percentage point interest rate reduction for automatic debit. Private Loans that are in a deferment (including borrowers who elect deferred repayment), grace period, or forbearance are not eligible to enroll and receive the automatic debit benefit until they enter into repayment. Once the repayment period commences, the borrower may enroll in automatic debit. Borrowers electing to enroll in interest-only or immediate repayment are eligible to enroll in automatic debit once all disbursements on the loan have been made and the loan is considered to be fully disbursed. The interest rate reduction for authorizing our servicer to automatically debit monthly payments from a savings or checking account will not reduce the monthly payment, but will reduce the monthly finance charge, resulting in a lower total cost of loan.
APR’s provided include a 0.50 percent interest rate reduction for authorizing our loan servicer to automatically debit your payments each month from your bank account.
Loans are funded by the New Hampshire Higher Education Loan Corporation (NHHELCO) NMLS ID# 1527348 www.nmlsconsumeraccess.org. EDvestinU® is a trademark of NHHELCO.
Variable APR
APR or “annual percentage rate” is a calculation of what the loan will cost, taking into consideration interest, fees and length of loan. Accordingly, the APR is subject to increase or decrease due to factors such as changes in the interest rate of variable rate loans, changes in principle due to the capitalization of interest or presence of a cosigner.
Variable APR rates may increase or decrease depending on fluctuations in the 30-day average SOFR Index. Monthly interest rate accrual is based on the published 30-day average SOFR Index rate as of the second to last business day of the previous month plus your applicable margin. If the 30-day average SOFR Index is negative, it will be deemed to be equal to zero.
Lowest rate requires application with a cosigner and 0.50 percentage point interest rate reduction for automatic debit. Private Loans that are in a deferment (including borrowers who elect deferred repayment), grace period, or forbearance are not eligible to enroll and receive the automatic debit benefit until they enter into repayment. Once the repayment period commences, the borrower may enroll in automatic debit. Borrowers electing to enroll in interest-only or immediate repayment are eligible to enroll in automatic debit once all disbursements on the loan have been made and the loan is considered to be fully disbursed. The interest rate reduction for authorizing our servicer to automatically debit monthly payments from a savings or checking account will not reduce the monthly payment, but will reduce the monthly finance charge, resulting in a lower total cost of loan.
APR’s provided include a 0.50 percent interest rate reduction for authorizing our loan servicer to automatically debit your payments each month from your bank account.
Loans are funded by the New Hampshire Higher Education Loan Corporation (NHHELCO) NMLS ID# 1527348 www.nmlsconsumeraccess.org. EDvestinU® is a trademark of NHHELCO.
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ISL
Minimum credit score
Fixed APR
Subject to credit approval. Loans are made by Iowa Student Loan Liquidity Corporation or Bank of Lake Mills. Bank of Lake Mills does not have an ownership interest in Iowa Student Loan Liquidity Corporation. Bank of Lake Mills is Member FDIC. Annual percentage rate (APR) shown is dependent on if you are viewing this page with or without the auto-debit discount applied. If viewing with auto-debit discount applied, the APR rate will range from 6.93% APR to 11.58% APR and assumes you are enrolled in and maintain auto-debit payments from the date of origination. Enrolling in auto-debit results in a 0.25% interest rate reduction. Without enrolling in auto-debit, the rate will range from 7.18% APR to 11.83% APR. Not all borrowers receive the lowest rate. If you are approved for a loan, the rate offered will depend on your credit profile, the term you select, your state of residence or your current lender and will be within the ranges shown above.
Variable APR
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LendKey
Minimum credit score
Fixed APR
1 – Terms and Conditions Apply
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
Variable APR
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Nelnet Bank
Minimum credit score
Fixed APR
Credit Score
A soft credit pull—whether on Sparrow or on Nelnet Bank’s platform– will not affect your credit score. If you continue with your application, Nelnet Bank will request your permission to obtain your full credit report from one or more consumer reporting agencies. This is a hard credit pull and may affect your credit score.
Auto Debit (Auto Pay)
Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.
Cosigner Release
A request for the cosigner to be released can be made by either the borrower or cosigner when each of the following conditions has been met:
– The account must have been in full principal and interest repayment for at least 24 months.
– Twenty-four consecutive, on-time principal and interest payments, or lump sum equivalent, must have been made. NOTE: A lump sum payment does not replace the requirement to have been in full principal and interest repayment for at least 24 months. Interest-only or fixed-pay payments while enrolled in school do not qualify towards the 24 consecutive on-time payments.
– The loan must be current at the time of request.
– The loan must not have been in deferment, hardship forbearance, or other alternative payment assistance plan within the past 24 months.
– The loan must not have been permanently modified from its original terms in the credit agreement.
– The primary borrower must be a U.S. citizen or have permanent residency in the United States.
– The primary borrower must meet the age of majority requirement in their permanent state of residency.
Requirements are subject to change. If all of these conditions have been met, then an application for cosigner release may be submitted. The primary borrower is required to demonstrate they have the ability to assume sole responsibility for the loan(s) by providing proof of income, meeting debt-to-income requirements, and having a satisfactory credit history. (A credit report will be obtained during the review process).
If you have questions on cosigner release, or would like to apply, contact us via email or phone at Loans@NelnetBank.com or 800.446.4190.
Flexible Repayment
Nelnet Bank offers various payment assistance programs to assist you if you are currently struggling to make payments. Contact Nelnet Bank at Loans@NelnetBank.com or 800.446.4190 to get more information.
Loan Eligibility
Refinance Loan Eligibility:
You must be a U.S. citizen or permanent resident alien with a valid U.S. Social Security number, and be the legal age to enter into binding contracts in your state/territory of residency, or be at least 17 years of age and apply with a cosigner who is at least the age of majority in their state/territory. Non-residents can apply with an eligible cosigner who is a U.S. citizen or permanent resident alien with a valid U.S. Social Security number. The student loans you refinance must be in their grace or repayment period, and you can no longer be enrolled in school on a half-time or more basis. You must have at least $5,000 in student loans to refinance. You or your cosigner must meet Nelnet Bank’s annual income criteria. Approval subject to credit review. Other credit criteria may apply.
Refinance Loan Limits:
Minimum loan amount: $5,000; Maximum student loan limits:$125,000 for borrowers with an undergraduate degree; $175,000 for borrowers with a graduate or doctorate degree; $175,000 for borrowers with an MBA or graduate law degree; $500,000 for borrowers with a graduate health professions degree.
Loan Refinancing Risks:
Federal student loans include benefits that may not be offered with private student loans. Carefully review any potential benefits that may be lost by refinancing federal and private education loans, such as the loss of any remaining grace periods. To learn more about what to take into consideration when refinancing federal student loans with private education loans, click here.
Interest Rates
Fixed interest rates range from 7.12% APR (with auto debit discount) to 10.79% APR (without auto debit discount). Your interest rate will depend on your (and if applicable, your cosigner’s) credit qualifications. The fixed interest rate will remain the same for the life of the loan. Variable interest rates range from 7.59% APR (with auto debit discount) to 14.49% APR (without auto debit discount). Variable rates for Nelnet Bank Refinance Loans are calculated using either (a) the One-Month SOFR; (b) the 30-day Average SOFR; or (c) the forward-looking term rate based on SOFR as published by the Federal Reserve Bank of New York and/or The Wall Street Journal “Money Rates” table on the twenty-fifth day (or the next business day) of the immediately preceding calendar month. The variable rate may reprice and change on the first day of each month if the SOFR index changes. This may result in higher monthly payments. The current One-Month SOFR index is 5.30% as of September 1, 2023. The lowest rate for each loan type requires automatically withdrawn (i.e., auto debit) payments, a five-year repayment term, and the borrower making immediate principal and interest payments. The lowest rate is available only to the most creditworthy applicants. Not all borrowers will receive the lowest rate. The interest rate and Annual Percentage Rate (APR) may be higher depending upon (1) the credit history of the borrower and, if applicable, the cosigner, (2) the repayment option and loan term selected, (3) the loan type selected, and (4) the highest level of education attained. If approved, applicants will be notified of the rate qualified for within the stated range.
Savings
Your actual savings, if any, may vary based on interest rates, balances, remaining repayment terms and other factors. Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan.
Variable APR
Credit Score
A soft credit pull—whether on Sparrow or on Nelnet Bank’s platform– will not affect your credit score. If you continue with your application, Nelnet Bank will request your permission to obtain your full credit report from one or more consumer reporting agencies. This is a hard credit pull and may affect your credit score.
Auto Debit (Auto Pay)
Interest rate reduction of .25% for automatically withdrawn payments from any designated bank account (“auto debit discount”). Auto debit discount applies when full payments (including both principal and interest) are automatically drafted from a bank account. The auto debit discount will continue to apply during periods of approved forbearance or deferment if the auto debit discount was in effect at the time of receiving the forbearance or deferment. Auto debit discount will remain on the account unless (1) the automatic deduction of payments is canceled or (2) there are three consecutive automatic deductions returned for insufficient funds at any time during the term of the loan.
Cosigner Release
A request for the cosigner to be released can be made by either the borrower or cosigner when each of the following conditions has been met:
– The account must have been in full principal and interest repayment for at least 24 months.
– Twenty-four consecutive, on-time principal and interest payments, or lump sum equivalent, must have been made. NOTE: A lump sum payment does not replace the requirement to have been in full principal and interest repayment for at least 24 months. Interest-only or fixed-pay payments while enrolled in school do not qualify towards the 24 consecutive on-time payments.
– The loan must be current at the time of request.
– The loan must not have been in deferment, hardship forbearance, or other alternative payment assistance plan within the past 24 months.
– The loan must not have been permanently modified from its original terms in the credit agreement.
– The primary borrower must be a U.S. citizen or have permanent residency in the United States.
– The primary borrower must meet the age of majority requirement in their permanent state of residency.
Requirements are subject to change. If all of these conditions have been met, then an application for cosigner release may be submitted. The primary borrower is required to demonstrate they have the ability to assume sole responsibility for the loan(s) by providing proof of income, meeting debt-to-income requirements, and having a satisfactory credit history. (A credit report will be obtained during the review process).
If you have questions on cosigner release, or would like to apply, contact us via email or phone at Loans@NelnetBank.com or 800.446.4190.
Flexible Repayment
Nelnet Bank offers various payment assistance programs to assist you if you are currently struggling to make payments. Contact Nelnet Bank at Loans@NelnetBank.com or 800.446.4190 to get more information.
Loan Eligibility
Refinance Loan Eligibility:
You must be a U.S. citizen or permanent resident alien with a valid U.S. Social Security number, and be the legal age to enter into binding contracts in your state/territory of residency, or be at least 17 years of age and apply with a cosigner who is at least the age of majority in their state/territory. Non-residents can apply with an eligible cosigner who is a U.S. citizen or permanent resident alien with a valid U.S. Social Security number. The student loans you refinance must be in their grace or repayment period, and you can no longer be enrolled in school on a half-time or more basis. You must have at least $5,000 in student loans to refinance. You or your cosigner must meet Nelnet Bank’s annual income criteria. Approval subject to credit review. Other credit criteria may apply.
Refinance Loan Limits:
Minimum loan amount: $5,000; Maximum student loan limits:$125,000 for borrowers with an undergraduate degree; $175,000 for borrowers with a graduate or doctorate degree; $175,000 for borrowers with an MBA or graduate law degree; $500,000 for borrowers with a graduate health professions degree.
Loan Refinancing Risks:
Federal student loans include benefits that may not be offered with private student loans. Carefully review any potential benefits that may be lost by refinancing federal and private education loans, such as the loss of any remaining grace periods. To learn more about what to take into consideration when refinancing federal student loans with private education loans, click here.
Interest Rates
Fixed interest rates range from 7.12% APR (with auto debit discount) to 10.79% APR (without auto debit discount). Your interest rate will depend on your (and if applicable, your cosigner’s) credit qualifications. The fixed interest rate will remain the same for the life of the loan. Variable interest rates range from 7.59% APR (with auto debit discount) to 14.49% APR (without auto debit discount). Variable rates for Nelnet Bank Refinance Loans are calculated using either (a) the One-Month SOFR; (b) the 30-day Average SOFR; or (c) the forward-looking term rate based on SOFR as published by the Federal Reserve Bank of New York and/or The Wall Street Journal “Money Rates” table on the twenty-fifth day (or the next business day) of the immediately preceding calendar month. The variable rate may reprice and change on the first day of each month if the SOFR index changes. This may result in higher monthly payments. The current One-Month SOFR index is 5.30% as of September 1, 2023. The lowest rate for each loan type requires automatically withdrawn (i.e., auto debit) payments, a five-year repayment term, and the borrower making immediate principal and interest payments. The lowest rate is available only to the most creditworthy applicants. Not all borrowers will receive the lowest rate. The interest rate and Annual Percentage Rate (APR) may be higher depending upon (1) the credit history of the borrower and, if applicable, the cosigner, (2) the repayment option and loan term selected, (3) the loan type selected, and (4) the highest level of education attained. If approved, applicants will be notified of the rate qualified for within the stated range.
Savings
Your actual savings, if any, may vary based on interest rates, balances, remaining repayment terms and other factors. Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan.
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PenFed
Minimum credit score
Fixed APR
It is recommended that you utilize scholarships, grants and other federal student loans, such as the Federal Direct Student Loans, available to you before you use a Brazos Student Loan.
By providing your email, you are consenting to receive periodic emails from Brazos regarding the Brazos Student Loan, as well as general student loan information, information on other Brazos loan products or services, and other information we believe you will find informative and helpful.
Rates and terms provided as a result of a soft credit check do not mean you have been approved for the Brazos Student Loan but will give you an indicator of if, and on what terms, you may qualify. In order to qualify and be approved for the loan, you must apply, have a hard credit pull performed, and provide all necessary documents and information. A hard credit inquiry may impact your credit score.
Credit Review and Approval. If you choose to apply for a Brazos Student Loan, Brazos Parent Loan, or Brazos Refinance Loan and continue your application past the pre-credit eligibility stage, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for Brazos to be able to issue you a Brazos loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. The initial credit review is based on review of all the information you and your cosigner (if applicable) provide during the application process and the information obtained from your credit report(s). If you pass the initial credit review, you will need to provide acceptable documentation such as your income verification before the final loan approval.
Brazos Education Lending Corporation (Brazos) is a part of a group of several non-affiliated nonprofit companies that are all managed by The Brazos Higher Education Service Corporation, Inc. and are commonly referred to as the Brazos Managed Companies. The first of the Brazos Managed Companies was organized in 1975 in Waco, Texas, as a secondary market for student loans. Since that time, the Brazos Managed Companies have, on a combined basis, served an estimated 2 million student borrowers and have helped fund an estimated $30 billion in student loans.
Variable APR
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SoFi
Minimum credit score
Fixed APR
Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
Variable APR
Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
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Yrefy
Minimum credit score
Fixed APR
Yrefy’s loan refinance program offers fixed rates from 3.65% APR up to 7.00% APR. Your interest rate will remain constant over the life of your loan and your monthly payment amount will remain the same. Not all borrowers receive the lowest rate. Get started now. To check the rates and terms you qualify for, Yrefy will conduct a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. If pre-approved for a refinance loan, depending on your creditworthiness, your loan approval may require the addition of a co-borrower.
If you are pre-approved as a Borrower, your interest rate will be in the range listed above. The estimated loan option and terms displayed are based on information you provided in the pre-approval application and are subject to change prior to acceptance. Yrefy LLC is not responsible for any inaccurate information disclosed on this website.
After seeing your offered interest rates, you may choose to continue your application online at https://apply.yrefy.com or by contacting Yrefy’s Advocate. With your prior authorization, Yrefy will complete a hard credit inquiry, verifying the information you provided, and collecting additional information from you (and your co-borrower, if applicable) for Yrefy to determine whether you qualify for a loan. A hard credit inquiry is required for any lender to be able to issue a refinance loan. Up to a 5% fee will be assessed at the time your private education loan(s) are refinances. This amount will be added to the principal balance of your refinanced loan.
Variable APR
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By increasing your income, say, through taking on a side hustle or asking for a raise, you can reduce your overall debt-to-income ratio.
In this example, increasing your income by just $1,000 per month would lower your front-end ratio by around 4 percentage points and your back-end ratio by around 5 percentage points.
| Before | After Increasing Your Monthly Income | |
| Monthly Pre-Tax Income | $8,000 | $9,000 |
| Monthly Housing Expenses | $3,000 | $3,000 |
| Total Monthly Debt Expenses | $650 | $650 |
| Front-End Ratio | 37.5% | 33% |
| Back-End Ratio | 45.6% | 40.5% |
If increasing your income isn’t possible at this time, consider refinancing your student loan debt. Refinancing to a longer repayment period will decrease your monthly payment. Accordingly, it will lower your total monthly debt payments. In doing so, your debt-to-income ratio will drop.
For example, let’s say you were able to decrease your $250 monthly student loan payment to $100, making your overall monthly debt expenses $500 instead of $650. Even with the same income, your back-end DTI would drop around 2 percentage points.
Now, if you are able to increase your income and reduce your monthly debt payments, you may see a greater drop in your DTI. In this example, you would drop nearly 7 percentage points by increasing your income by $1,000 per month and reducing your debt payments by $150 per month.
| After Only Refinancing | After Refinancing and Increasing Income | |
| Monthly Pre-Tax Income | $8,000 | $9,000 |
| Monthly Housing Expenses | $3,000 | $3,000 |
| Total Monthly Debt Expenses | $500 | $500 |
| Front-End Ratio | 37.5% | 33% |
| Back-End Ratio | 43.75% | 38.8% |
It’s important to note that lenders care far more about your debt-to-income ratio than they do your total debt expenses. So, even if you have $100k in student loan debt, if your overall DTI is still within the ideal range, you’re in the green.
See What You Prequalify For
Prequalifying with a mortgage lender can help you see what you may qualify for, and thus, where you need to make adjustments to qualify for your desired mortgage loan. For example, if you’re only approved for a fraction of the amount you expected to qualify for, you can ask the lender how you could improve your application to prequalify for higher.
>> MORE: What student loan rates do I prequalify for?
When seeking a preapproval for a home, remember to consider the following:
- Lenders will evaluate your entire short-term financial history. If questioned, you will need to be able to explain where all of your income has come from.
- If you’re self-employed, your income will be under greater scrutiny. Accordingly, you may need to provide additional documents for income verification.
Once you have a preapproval, sellers are also more likely to take you seriously as a potential homebuyer. This can increase the likelihood of your offers being accepted.
Explore Down Payment Assistance Options
If your student debt is preventing you from having enough to save for a down payment, consider down payment assistance programs. These programs will help you cover the cost of your down payment if you are a first-time homebuyer.
There are a few types of down payment assistance programs to look out for:
- Grants. Grants are considered a gift, meaning you never have to pay it back. (Yup! Free money.)
- Forgivable loans. Similar to some federal student loan forgiveness programs, some mortgage loans are forgivable after remaining in the home for a set number of years.
- Matched savings programs. Some banks, government agencies, and community organizations offer matched savings programs, allowing buyers to have their down payment savings matched. For example, if a buyer deposited $10,000 into an account, the partnering organization would add another $10,000 in to match it. Then, you can use that $20,000 toward your down payment.
Consider Your Budget
Before adding a mortgage loan into the mix, make sure you have a deep understanding of your current expenses. If you aren’t already tracking your spending, consider doing so.
You may find that you spend unnecessarily in certain areas. Therefore, by cutting those areas back even just a little bit, you could find more money to put toward paying off your debt or toward a down payment.
Be Willing to Make Compromises
If buying a house despite having student loan debt is a top priority for you, consider holding off on other “wants” for a bit. For example, rather than upgrading your cell phone, hold onto your current phone for another year, and direct what you would’ve spent on a phone toward paying off your student loan debt.
Likewise, if you don’t qualify for as much of a mortgage loan as you expected due to your debt, consider lowering your expectations for your first home. While a move-in ready home in the perfect location may be ideal, it may not be in budget. Be open to compromising on certain elements of the home to find something you like that also suits your current financial situation.
Final Thoughts from the Nest
Buying a house with student loan debt is entirely possible. However, there may be additional hurdles to overcome along the way, especially if you have a high loan balance in comparison to your income.
Be sure to calculate your debt-to-income ratio prior to beginning the homebuying process. The earlier you understand your broader financial situation, the longer you’ll have to make adjustments before applying for a mortgage loan.
If you do opt to refinance your student loan debt as a tactic for reducing your monthly debt expenses, use Sparrow. By completing the Sparrow application, you’ll be able to see what refinance loans you qualify for and at what rates. Then, you can compare your loan options side-by-side to be sure you’re picking the best one.