Dear Student Loan Hero,
Can I refinance my student loans if I’m a freelancer or self-employed? I’ve heard there are problems with getting student loan refinancing if you don’t have a steady paycheck coming in, unless you have so much money socked away that you don’t need refinancing in the first place.
Dear Student Loan Borrower,
Thanks to innovations from student loan refinancing companies, having a traditional job is no longer required to score a lower rate on your college debt.
Most lenders are concerned with your income, whether it comes from a 9-to-5 office job or a stack of 1099-MISC tax forms.
Top-rated Earnest, for example, requires applicants to be “employed, have a written job offer for a position that starts within six months or possess consistent income.” Some other lenders simply require applicants to have a specified minimum income.
Assuming you can prove you’re being paid on the regular — you might be asked for an income tax return instead of pay stubs — you’ll be good to go. Keep in mind that you’ll have to check off other basic eligibility boxes for student loan refinancing, such as sporting a strong credit history.
Although being out on your own professionally won’t directly hinder your refinancing application, it could make qualifying more difficult.
Say, for example, you used credit to build your business. If your credit report has blemishes, if your credit score has dipped, or if your debt-to-income ratio is out of whack, you might face a denial. Opening up the conversation with potential lenders can clear up any confusion about whether your business’s balance sheet clouds your own personal finances.
No matter where you might fall short on a refinancing application, a cosigner could lift you up to approval. They’ll need strong credit and consistent income to become eligible to join your application.
And, heck, if the cosigner’s finances are in tip-top shape, it likely won’t matter if they’re self-employed either.
Finally, if you’re already working for yourself, you’re likely aware of the challenges of juggling your loan repayment. But if you’re considering the freelancer life for the first time, ask yourself some hard questions before giving up your full-time job and salary.
Wishing you a successful repayment,
Student Loan Hero
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