Due to technological innovations, everything is at our fingertips. We can watch our favorite movies or order food within seconds. However, when it comes to finance, especially the refinance process, it seems like we live in the stone age. There are a handful of companies that are trying to "speed up" the refinance process by introducing new technologies. Despite the improvement, it can still take weeks to complete. In this article, we explain why it can take so long and how you can make the refinance process quicker. If you want further details on what refinancing is click here.
Step One in the Refinance Process
Steps one and two in the refinance process should be the most time consuming, but can also save you a large headache. The first and second steps combined determine if it makes since for you to continue. For example, if you graduated 10 months ago with your doctorate in physical therapy, there is a good chance you can refinance your student loans. However, this may not always be the case. You must determine which student loan you should refinance because, if you are like most recent grads, you likely have more than one loan. In addition, you have to know what your interest rates are, which ones are private versus federal, fixed versus variable rate, and which ones may be eligible for forgiveness based on service time (if it qualifies for public service loan forgiveness).
Once you know your interest rates and the types of loans you have, you then have to do some market research. This entails researching which companies may refinance your loan and the types of loans they offer. For example, do they offer fixed rate or variable rate loans or do they offer income share agreements like FitBUX. During this research, you should determine what the current market rates are and the length of the loan that is right for you. At that point, you can compare your current loans to the loans found in your research. If it doesn't make sense to refinance then you can stop the refinance process. This is why we put these two steps first. Many people start the refinance process at step three and waste weeks and even months before they figure out if it makes sense to refinance.
If you determine that refinancing makes sense, then you can move on to step three and begin the refinance process with a finance company. There are a number of ways to do this. One option is to go to a lending marketing site such as Lendingtree. On these sites, you will answer a few questions and then be directed to a handful of lenders. Be cautious when you use these sites. A few of them blast your info to many companies and you will get bombarded with phone calls/emails promising you the world. Others may say that they "shop your loan" but in reality they only show it to two or three lenders they have partnerships with or simply send it to the lender that is willing to pay the highest fee.
A second option is to go to individual lenders that you found during your research and apply there. Most companies have a process where you can get a "pre-approval" by completing a 5 to 10 minute pre-application. This is another reason why having researched your own loans will be helpful and a time saver. You will have the answer to their questions already and they will be more accurate. The more accurate information you can provide, the less the loan will change between pre-approval and closing. However, be careful and do not get too excited just yet. As we just mentioned, your "pre-approval" will not be your final loan.
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We hope this article on the refinance process helped you. If you have any questions or would like us to write about a specific topic please contact us. As always, if you have refinance questions, most likely your friends do too. Please share this article with them.