What is Somerville Municipal Federal Credit Union Student Loan Refinancing?

When you refinance your student loans with Somerville Municipal Federal Credit Union, you have a great opportunity to consolidate and refinance one or more student loans into a single loan that may have a lower interest rate and monthly payment.

What’s the difference between consolidating and refinancing?

Although these terms are often used interchangeably, they actually describe two specific benefits of our loans. “Consolidating” combines multiple loans into a single loan and monthly payment, while “refinancing” creates a new loan with new terms, which may or may not reduce the interest rate. While you can generally consolidate and refinance, some people apply with just one student loan because they’re simply interested in refinancing and potentially obtaining a better interest rate that may require lower monthly payments. Likewise, some people are interested in consolidating multiple loans even if their interest rate doesn’t change because they want the ease of one payment.

Can I refinance both my federal loans and private loans with Somerville Municipal Federal Credit Union?

Yes, you can! Please be aware that you may lose certain benefits (e.g., favorable repayment options, loan forgiveness options, extended loan terms, etc.) associated with your federal student loans by refinancing with a private loan. We strongly advise you to review and understand your options and the potential benefits and drawbacks of refinancing your federal loans before doing so.

How do I know if my student loans are federal or private?

Check your last statement -- most lenders and servicers specify which loans are federal and which are private. If you’re still unsure, please contact your lender for help.

How much will I save with Somerville Municipal Federal Credit Union?

Your potential savings depend on many factors including your current interest rate, outstanding federal and private student loan debt, your repayment term, and your credit history. Once you begin the application process, we’ll provide you with payment estimates to check your potential savings.

Who is eligible to refinance with Somerville Municipal Federal Credit Union?

Please review our Eligibility Criteria or call us for further details.

What’s a cosigner?

A cosigner is a creditworthy parent, grandparent, guardian, or other adult who’s willing to assume legal responsibility for the loan liabilities along with you. A cosigner must be a U.S. citizen or permanent resident.

Am I required to have a cosigner?

A creditworthy cosigner increases the likelihood of loan approval and may lead to a lower rate. However, if you meet the credit and income requirements on your own, you may apply without a cosigner.

Can my cosigner’s credit record be affected if I don’t make timely loan payments?

Yes. We will furnish information to the credit reporting agencies on both you and the cosigner.

Is the cosigner responsible for repaying the loan?

If the borrower fails to repay the loan, then the cosigner is responsible for payment. However, we offer the benefit of cosigner release, which is subject to Somerville Municipal Federal Credit Union approval. In order to qualify the borrower, must meet the following requirements:

• Make 12 months of consecutive, on-time full payments of principal and interest during the full repayment period (must occur immediately prior to the request for cosigner release). “On-time payment” means each payment is made no later than the 15th day after the scheduled due date of the payment. “Consecutive payment” means the regularly scheduled monthly payment must be made for 12 months straight without any interruption.
• The borrower’s account cannot be in delinquent status
• The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review, demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility for loan repayment
• No bankruptcies or foreclosures filed in the last sixty months; and
• No loan defaults on a student loan or with Somerville Municipal Federal Credit Union.

How much can I borrow?

The minimum you can borrow is $5,000.00. The maximum you can borrow lifetime is $125,000.00 for undergraduate debt and $250,000.00 for graduate school debt.

Do I need to have graduated to refinance?

Yes, you must be a graduate of an eligible school to refinance your loan(s) with Somerville Municipal Federal Credit Union.

Why isn't my school eligible for refinancing?

Not all educational institutions are eligible for our program. Unfortunately, we’re not able to offer refinancing if the school from which you graduated isn’t on our eligibility list.

How do I apply for refinancing with Somerville Municipal Federal Credit Union?

Easy! Just complete the application on our site.

Will the borrower’s credit be checked?

Yes. During the application process, we obtain a credit report on the borrower (and cosigner, if applicable). We then assess creditworthiness and ability to repay the loan.

What documentation is required during the application process?

Once you’re conditionally approved, you may be asked to submit the following documents:

• Proof of Identity
• Proof of Graduation
• Proof of Income
• Account statements for the loans that you wish to refinance

What proof of identity do I need to provide?

You’ll provide a government-issued ID (such as a driver's license) to help confirm your identity. If you're a permanent resident, we’ll need your permanent resident card (or "Green Card").

What proof of graduation do I need to provide?

We’ll need to verify your graduation date through a school transcript, copy of the degree/diploma or via our application process electronically.

What proof of income do I need to provide?

Usually, you’ll send us copies of your two most recent pay stubs within the last 60 days. Depending on your type of employment or financial situation, we may ask for other proof of income. (If your loan is cosigned, both the borrower and the cosigner will need to submit these documents.).

What payoff information do I need to provide?

Usually, you’ll just provide the last statement for each student loan you’d like to refinance. If we need any further information, we’ll let you know once we review your statement.

How can I check the status of my application?

Just sign in to your account Opens in new window. The green status bar will show your application’s progress.

If my loan is approved, how long does it take to disburse the fund to my lender(s)?

You should allow 2 weeks until funds are disbursed on approved loans, but it can take less or more time in some cases. Remember, once the process is completed, you should continue to make payments to your previous lenders up until you have confirmed that your previous loans are paid in full.

Can I prepay my loan?

Yes, you can prepay your loan -- either partially or in full -- at any time, without incurring any fees or penalties.

Will my personal information be shared with third parties?

Please see our Privacy Policy Opens in new window for details.

How is my financial information protected?

Our vendor processing your application, LendKey Technologies, has servers that are equipped with Secure Socket Layer (SSL) certificate technology, which encrypts your entire online session. Automatic sign-out occurs after a period of inactivity. All banking information and social security numbers are stored in a secure offsite data center. All users must pass through our secure verification systems to prevent identity theft. Please see LendKey's Privacy Policy Opens in new window for additional details.