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(RISLA) Rhode Island Student Loan Authority Refinance Explained

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(RISLA) Rhode Island Student Loan Authority Refinance Explained

Rhode Island is one of several states that has launched a student loan refinance program over the last few years. Refinancing your student loans is essentially paying off your current loans (federal or private) with another loan that has a better interest rate. A refinance can save you a bundle on interest. In some cases, it may even lower your monthly loan payment.

What sets the Rhode Island Student Loan Authority (RISLA) refinance program apart from some of the other state-run initiatives is that it’s open to anyone. You can qualify even if you live in a different state.

In this post we’ll cover:

  • The RISLA refinance loan terms and eligibility criteria
  • The type of student loans you can refinance
  • The implications of refinancing federal loans
  • Pros and cons

RISLA loan terms and eligibility requirements

RISLA offers loan terms of 5, 10, and 15 years. You can refinance $7,500 to $250,000. This refinance has no origination or prepayment penalty fees.

You need to apply with a co-signer to qualify for the lowest rates this program has to offer.

With a co-signer, fixed-interest rates range from 3.49% to 7.64% APR with auto-pay. If you sign up for direct deposit to make your monthly loan payment, RISLA offers an additional 0.25% interest rate reduction.

As for the RISLA eligibility requirements, you must:

  • Be refinancing loans that were used for education
  • Be refinancing loans that are in payment status
  • Have a acredit score of 680 or above
  • Earn at least $40,000 per year.
    • Borrowers that reside at the same address must make a combined annual salary of at least $40,000 per year.
    • Borrowers that reside at separate addresses, at least one of the borrowers must make $40,000 individually.

Student loans you can refinance with RISLA

You can refinance private student loans and federal student loans through RISLA.

Federal student loans you can refinance include parent PLUS loans, Stafford Loans, and both unsubsidized and subsidized Direct Loans.

Refinancing private student loans

Private student loans can be good candidates for refinancing because rates and loan terms offered by private lenders can vary widely. Some private student loans even have variable interest rates.

Keeping a variable interest loan for a long time can be risky. Variable interest rates can start off very low. The trade-off is variable rates can also increase in the future and impact your monthly payment.

Refinancing a private student loan that has high or variable interest with RISLA can stabilize your payments and save you money.

Refinancing federal student loans

Unlike private student loans, interest rates for federal student loans are set by the government.

For example, the interest rate on undergraduate subsidized and unsubsidized Direct Loans for 2016-2017 is fixed at 3.76%, which is a decent rate. If you took out undergraduate federal loans within the last few years, you may find your interest rate is already close to (or lower than) what RISLA is offering for a refinance.

Federal student loan borrowers who may benefit the most from the RISLA refinance are those with lingering undergrad loans from the early 2000s, and those with graduate or parent PLUS loans. These federal loans can carry an interest rate in the 6% to 8% range. In this case, a refinance with RISLA may be able to get you a lower interest rate.

RISLA has a calculator on its website you can use to check how much a loan refinance can save you. You can access that calculator here.

We also have a student loan refinance calculator at MagnifyMoney you can use to compare costs here.

Should you refinance federal student loans?

Savings is important, but it’s not the only factor to think about when deciding whether refinancing your federal student loans is the right move.

Refinancing your federal student loans can cause you to forfeit student loan borrower benefits like forbearance, deferment, income-based payment, and loan forgiveness.

Here’s a quick summary of these benefits and how they can help you:

  • Forbearance and deferment – Forbearance and deferment can postpone your student loan payments for a short period of time while you get back on your feet if you fall on hard times or experience an illness.
  • Income-based repayment plans – Income-based payment plans cap your monthly payment based on your income and family size. After 20 to 25 years of making payments within an income-based program, the balance of your loans can be forgiven.
  • Public Service Loan Forgiveness – The Public Service Loan Forgiveness Program is an initiative that anyone who plans to pursue a career in public service should consider. If you get an approved public service position and make 120 consecutive loan payments while serving (about 10 years), the remaining balance of your Direct Loans can be forgiven.

One thing to note is RISLA does offer some borrower benefits, including 12 months of forbearance and a payment plan program in certain circumstances. However, the extent of the borrower benefits that you get with federal student loans goes beyond what RISLA provides.

Pros and cons

Pro: The competitive interest rates. If you apply with a co-signer, the RISLA refinance offers low and fixed interest rates.

Con: The lowest rates require a co-signer. You can’t qualify for the best interest rates this program has to offer without a co-signer. We’ll discuss a few lenders below that may offer you a low rate without a co-signer.

Pro: Anyone is welcome to apply. Being a resident of Rhode Island is not required.

Con: Refinancing forfeits student loan borrower benefits. This con is irrelevant if you’re planning to refinance private student loans since they typically offer limited borrower protections anyway. But refinancing federal student loans will cause you to miss out on the protections covered above. Make sure you’re comfortable with the implications of no longer having these perks before moving forward.

Pro: No fees. The RISLA refinance has no origination fee or prepayment penalties.

Should you consider the RISLA refinance?

The RISLA refinance is open to borrowers outside of Rhode Island, so it’s yet another refinance option that students and parents across the country can consider. But it’s also important to shop around before making a decision.

The downside of the RISLA refinance is that the most competitive rates require a co-signer. If you don’t have a co-signer, here are a few other lenders you can turn to that offer low rates:

  • CommonBond – Fixed rates starting at 3.89% APR
  • Earnest – Fixed rates starting at 3.50% APR
  • LendKey – Fixed rates starting at 3.64% APR
  • SoFi – Fixed rates starting at 3.89% APR

Keep in mind, the very best rates are given to those with strong credit scores. You may need to work on strengthening your credit history first before getting approved for a low rate on your own with CommonBond, Earnest, LendKey, or SoFI.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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College Students and Recent Grads

5 Private Student Loans That Offer a Grace Period

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

mortar board cash

Graduating college, trying to get a job and figuring out how to navigate adulthood feels overwhelming enough. Who wants to throw in making student loan payments? That’s where the grace period for student loans comes in.

Unfortunately, this financial breathing room isn’t always available. It’s common for federal student loans to come with a six-month grace period, but private lenders are not required to offer this buffer time. Still, even with private debt, some banks and credit unions are kind enough to extend the courtesy of a student loan grace period.

Which student loans have grace periods?

As mentioned, most federal student loans have a standard six-month grace period, with PLUS loans being the exception. (Federal Perkins loans used to come with a standard nine-month grace period, but the program expired in 2017.)

With private student loans, on the other hand, there is no standard grace period. Just as with other loan features, the grace period terms, if any, will vary by lender. You will need to read your specific loan documents to know whether your private loan has a grace period, or you can call your lender directly to ask.

Note that some private lenders might use another term instead of “grace period,” or they might not use a term at all and simply say that your first loan payment is due a certain number of months after graduation. Either way, though, it would amount to the same thing.

5 private lenders with grace periods for student loans

While your specific private loan agreement will determine whether you have a grace period, there are several lenders that state upfront on their websites that they do offer grace periods on student loans.

1. Discover

Discover’s website says: “All Discover Student Loans provide you with a grace period — a period of time when you are not required to make your full (principal + interest) monthly payments, which begin when you enter repayment. Depending on your loan type, full monthly payments are not due until 6 or 9 months after you graduate or your enrollment status drops below half-time.”

With Discover, if you have an undergraduate private loan, your grace period is six months long. For private student loans to pay for a professional degree, such as a law degree, medical degree or MBA, your grace period is nine months long.

For borrowers with more than one loan type, Discover may align your repayment start dates and periods so that they are on the same schedule.

2. Wells Fargo

Wells Fargo offers grace periods for some of its student loans. Specifically, the bank’s website says:
“With most Wells Fargo private student education loans, you start making payments six months after you graduate or leave school, although for some loans like the Wells Fargo Student Loan for Parents and the Wells Fargo Private Consolidation loan, payments begin once the loan funds have been sent.”

Make sure to read your loan documents to determine if your private student loan from Wells Fargo does include the six-month grace period. And if you do have any questions or uncertainty about the grace period, ask the lender — ideally, before signing.

3. Citizens Bank

The Citizens Bank website states the following:
“With our Citizens Bank Student Loan … no principal or interest is due while you are still enrolled at least half-time. Payment begins 6 months after graduation.”

Citizens Bank (like Wells Fargo) does not call this period between graduation and repayment a “grace period,” but the website does say that payment begins after a six-month period. Still, as with the other lenders on this list, speak with the bank to make absolutely sure when you’re expected to start sending in payments.

4. Sallie Mae

Sallie Mae’s website says that for the Sallie Mae Undergraduate Smart Option Student Loan, “you have six months after you leave school (your grace period) before you begin to make principal and interest payments.”

With this particular loan from Sallie Mae, you should have a six-month grace period before your loans enter repayment. Note that the lender also offers the option of interest-only payments or fixed $25 monthly payments while in school if you want to avoid interest from piling up during that time.

5. PNC

The PNC Solution Loan for undergraduates also has an optional grace period, according to the PNC website.

Specifically, the lenders says, “If you choose to defer payments, repayment begins six months after you graduate.”

Will my loan accrue interest during the grace period?

Bear in mind that you will probably end up adding to the amount you owe during that grace period, due to interest accumulating.

Some federal loans also rack up interest during grace periods (such as unsubsidized direct loans), though a few do not (like subsidized direct loans). But with private student loans, your debt will very likely accrue interest during the grace period.

How can I minimize the impact of interest?

If you want to stop your interest from capitalizing (in which unpaid interest is added to the principal of the loan), you can make interest payments during your grace period.

As mentioned, the private loans from the lenders listed above will likely accrue interest during the grace period. If you’re hoping to save as much as you can on your student debt, however, you can speak with your lender to see what options are available. Usually, small payments during school or while the grace period is in effect can cut down on those interest costs.

Again, speak with your lender to know how interest on your loan will work before signing on the dotted line.

When grace periods are over

It’s important to remember that should you choose to consolidate your student loans, you’d lose any of your remaining grace period. And once you use it up, it’s gone for good. That’s when it’s time to start paying back your loans.

If you aren’t able to get a private loan with a grace period, don’t panic: Repayment may start a little sooner for you than it will for others, but you have a lot of time to prepare for that inevitability. Plus, the faster you start paying back what you borrowed, the faster you’ll pay it off.

Grace periods: overview

  • The grace period is the time after leaving school when you don’t need to make payments toward your student loan.
  • Grace periods for federal loans tend to last six months. The timing for when you’ll have to start repaying private student loans, however, will depend on your loan terms — there is no standard.
  • The terminology that lenders use to describe this buffer before repayment starts might not include the phrase “grace period,” so be sure to read your loan documents carefully to know what’s expected.
  • Paying off any accruing interest during your student loan’s grace period will save you money in the long term.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at [email protected]

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College Students and Recent Grads, Pay Down My Debt

How To Know If Your Student Loans Are Private or Federal

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

How To Tell If Your Student Loans Are Private or Federal

When you borrowed money to pay for college, you may not have paid much attention to the difference between federal and private student loans. You might not know who your student loan servicer is, or if you do, you may wonder for example whether that loan listed under Nelnet is federal or private.

In fact, it’s completely reasonable to ask why the difference between private and federal student loans matters in the first place.

There are a few ways to see if your student loans are private or federal — here’s how, along with what makes each different, and why knowing which type of loan you have is important.

What makes federal and private student loans different?

Federal student loans are offered through the Department of Education. Typically, these loans are easy to qualify for. For many federal student loans, your credit isn’t even checked.

There are four different federal student loan programs currently available:

  • Direct subsidized loans: These loans are awarded based on your financial need. When you apply for federal financial aid, your eligibility for subsidized loans is also considered. “Subsidized” here means that interest isn’t charged until after you graduate or drop below half time.
  • Directed unsubsidized loans: Anyone can receive an unsubsidized loan — they aren’t based on need. However, unsubsidized loans will put you on the hook for interest charges that accrue while you’re in school.
  • Direct PLUS loans: These loans are specifically for graduate students or for parents of undergraduate students taking out loans on behalf of their child. These loans aren’t based on financial need, and a credit check is required.
  • Direct consolidation loans: This type of loan allows you to combine all your federal student loans into one, giving you one manageable payment each month rather than many. Your new interest rate is the weighted average of all your loans, rounded up to the nearest one-eighth of a percent.

Private student loans, on the other hand, are offered by private lenders and have different repayment requirements compared with federal student loans. For example, private student loans can offer fixed or variable interest rates, while federal student loans only offer fixed rates.

Because the features of private loans vary from lender to lender, eligibility will depend on the bank, credit union or online financial institution that you borrow from.

Most borrowers usually favor federal student loans, given the flexible repayment options and debt-forgiveness programs they come with. But since federal loans also have borrowing limits, students may need to turn to private loans to help fund any remaining costs, and in a few cases, a private loan might have a better interest rate than their federal equivalent.

How to determine if your loans are federal

The first thing you should do to see if you have federal loans is log on to the National Student Loan Data System. The only loans listed here are federal.

If you’ve never used the NSLDS before, you’ll want to click the “Financial Aid Review” button on the homepage, hit “Accept,” and then enter your credentials.

If you have a Federal Student Aid (FSA) ID, you can enter it here. If not, there’s an option to create one. In May 2015, the government redesigned its student loan system, and you can now use your FSA ID to log on to multiple government sites. But if you haven’t visited in a while, you might need to create one.

In the event you forgot your credentials, you can click the “Forgot my username/password” button and have the information emailed to you or answer a challenge question. You’ll just be required to enter your Social Security number, last name and date of birth.

Once you log on, you’ll see a list of all the student loans that were disbursed to you. This page will also show you what your original loan amount was, and how much you currently owe.

Click on the numbered box to the left of your loan to determine your loan servicer. This will display all the information about that particular loan. Your loan servicer will be listed under the “Servicer/Lender/Guaranty Agency/ED Servicer Information” section. The name, address, phone number and website should all be displayed.

Additionally, this page will also inform you of your loan terms. Along with your original loan balance and current outstanding balance, it will tell you what the interest rate is and the current status of the loan.

How to determine if your student loan is private

As discussed, private student loans are loans not made by the government — banking institutions, such as Sallie Mae, Wells Fargo, Citizens Bank and others offer them. As a result, there are more lenders to look out for when it comes to private loans.

Unfortunately, there’s no central reporting system for private loans like there is for federal loans, which makes them slightly more tricky to track down.

Your first stop should still be the NSLDS to at least see if you have any federal loans. In 2015, just 5% of undergraduate borrowers had private student loans, so your student loans are more likely to be federal than private.

But in order to make sure you have no outstanding private student debt, you’ll want to take a look at your credit report. You can view your reports from the three main credit bureaus for free by visiting AnnualCreditReport.com.

Some lenders may not look familiar to you. Searching the lender’s name online may help you find out who the parent company is. Don’t hesitate to call the numbers available on your credit report if you’re still unsure.

If you graduated a while ago, some older loans may look unfamiliar. You might see “federal direct loan,” “federal Perkins,” or “Stafford” on your report — these are federal loans, so ensure they match up with what’s in your NSLDS file.

You might also be able to call your school’s financial aid office to see if they have records of your loans.

What should you do once you find out?

Knowing whether your student loans are private or federal can be important as you repay you college debt.

For example, knowing the difference is crucial if you ever decide to refinance or consolidate your student loans. You can only combine your debt under a direct consolidation loan if you have federal loans. Likewise, refinancing through a private lender will cause you to lose access to federal repayment and forgiveness programs, while private loans would be unaffected.

So, by knowing which type of student loans you have, you’ll get a better idea of what options you have to knock them off.

Customize Student Loan Offers with Magnifymoney tools

Dori Zinn contributed to this report.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

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