Have you been hearing about Leap Finance and their student loan refinancing options? If so, you’re not alone. Leap has been growing in popularity as a leading fintech company focused on student loan refinancing. With historic student loan debt levels and inflation impacting repayment plans, many borrowers are understandably interested in learning more about refinancing opportunities.
What is Leap Finance?
Founded in 2013, Leap Finance is a digital lending platform that offers student loan refinancing to help borrowers save money on their student debt. Some key things to know about Leap:
They specialize in student loans
Unlike many other personal lenders, Leap only deals with student loan refinancing. This allows them to become experts in this niche area of lending.
Online application and servicing
Leap handles the entire refinancing process online from application to account servicing. Borrowers manage their loans through Leap’s digital dashboard.
Competitive fixed and variable rates
They offer both fixed and variable interest rate options on refinanced student loans, with rates that can potentially save borrowers thousands in interest payments.
Fast Approval Decisions
Leap strives to provide refinancing rate quotes and approval decisions within minutes via their online forms.
Loan sizes up to $300,000
Leap can refinance individual loan balances up to $300,000 and total student loan balances up to $500,000.
In summary, Leap Finance seeks to simplify and streamline the student loan refinancing process through its digital tools and focus on this specialty lending area. Let’s explore in more depth how refinancing with them works.
How Does Leap Finance Student Loan Refinancing Work?
The refinancing process through Leap generally involves the following basic steps:
1. Gather your student loan information
To get started, you’ll need details on your current student loan balance(s), interest rate(s), loan type (Federal or Private), and loan servicer(s).
2. Complete Leap’s online application form
Provide your loan and personal information via Leap’s website application. This usually takes under 15 minutes.
3. Receive a refinancing rate offer
Within minutes, Leap will show you personalized fixed and variable rate options to refinance your loans at.
4. Review Leap’s loan terms
Check the loan amount, APR, monthly payment, fees, and other details of the offered rate. This is your refinancing quote.
5. Accept the offer and sign documents
If you choose to refinance with Leap, you’ll e-sign promissory notes and complete the approval process online.
6. Old loans are paid off, and new loans begins
Once approved, Leap will pay off your existing loans. Your new consolidated refinanced loan with Leap will then begin repayment according to the agreed terms.
So in summary, the Leap refinancing process is done largely online from start to finish within just a few days. Let’s look at some of the key terms and factors to consider in more detail.
Things to Consider When Refinancing with Leap
Planning to refinance is a big financial decision, so it’s important to thoroughly review your options and understand the implications. Here are some key things to evaluate with Leap:
Check the fixed and variable rate quotes being offered compared to your current rate. Variable rates are riskier but usually lower initially. Fixed rates are predictable but may be higher.
Review the monthly payment, total interest cost, loan term length (5-20 years usually), prepayment options and penalties with Leap versus your existing loans. Consider your finances and goals.
Refinancing Federal vs. Private Loans
Federal borrowers lose benefits like income-driven repayment if they refinance. Private borrowers may see larger savings. Consider factors like this in your situation.
Leap charges an origination fee of 1-5% of the total loan amount at closing, up to $750 max. Consider this cost versus potential long-term savings from a lower rate.
Leap generally requires a minimum 660 FICO score. Check your score beforehand to ensure you qualify or see if a cosigner could help.
Crunch the numbers – how much could you save over time versus your current payments? Refinancing only makes sense if real savings will be realized.
Taking the time to evaluate all of these critical aspects will help ensure refinancing is really the optimum financial choice given your situation. But let’s take a closer look at some of the key opportunities.
Potential Savings from Refinancing with Leap
In many cases, borrowers have successfully saved thousands by refinancing student loans with Leap. Here are a few of the main reasons why:
Lower Interest Rates
Leap frequently offers rates 1-3% lower than federal student loan rates, which can save massive amounts in total interest paid over a standard 10-year term.
Fixed Rate Certainty & Predictability
By locking in an attractive fixed rate for the life of the new loan, borrowers gain certainty that their monthly payments will stay consistent until it’s paid off.
Flexible Loan Terms
With terms from 5-20 years available, borrowers can potentially shorten or extend their loan lengths to achieve lower monthly payments or faster payoff.
Consolidation of Multiple Balances
Rolling multiple existing loans into one new Leap loan at a lower rate can make repayment far more streamlined with a single monthly due date.
Faster Pay Down of Principal
At a reduced rate, more of each payment goes towards actually paying down the balance rather than accumulating interest charges. Loan balances decrease quickly.
Take some time to plug your individual loan details into Leap’s savings calculator. It estimates exactly how much could be saved by refinancing at their quoted rates versus your current repayment terms. For borrowers with large balances refinancing even half a percentage point lower can result in thousands in interest savings.
Of course, there is a risk that future rates could decrease even further. So, it’s important to carefully weigh whether locking in savings now makes sense versus waiting for potentially greater later opportunities. For many, the certainty, convenience, and immediate savings are worthwhile…
Factors to Consider Before Refinancing in 2024
With the Federal Reserve still likely raising interest rates through the rest of 2022 and into 2023, some economic uncertainties exist that borrowers may want to be aware of when considering refinancing right now versus waiting:
Potential for Rates to Rise Further
Private student loan interest rates tend to fluctuate with Federal Reserve rate hikes. If more increases are ahead in early 2023, rates available later could end up lower than current offers.
Risk of Job Loss or Income Drop
Unemployment is still low currently, but risks exist of layoffs as certain sectors slow. Refinancing commits longer term if situations change.
Economic Growth Predictions Are Uncertain
Some economists predict smoother sailing ahead while others foresee a potential recession. Waiting reduces commitment if the economy worsens.
Future Forgiveness Proposals Remain Possible
Though unlikely in 2023, future administrations may offer more cancellation options. Refinancing loses eligibility for potential future relief.
However, there are also rational reasons why waiting could be risky too:
Rates May Not Decline at all
If underlying inflation proves stubborn, current quotes may end up lower than anything available 6-12 months from now if rates continue rising.
Existing Savings Potential is Real
Borrowers with high rates stand to lose out on substantial immediate and long term interest cost reductions by holding off on refinancing.
Limited Time Offers Could Expire
Some lenders offer introductory teaser rates for a limited period before they adjust higher over time. Locking in sooner ensures getting the lowest rate possible.
Ultimately, borrowers will need to weigh their own risk tolerance, financial situation, and confidence in economic forecasts when deciding if 2024 or beyond looks like a better time to refinance or not. Let’s move on to discuss the Leap application process.
Applying to Refinance with Leap Finance
Fortunately, Leap has streamlined the application process to be paperless, easy, and fast. Here are the basic steps:
1. Gather Documents
You’ll need recent paystubs, W-2s, driver’s license, and proof of your student loan balance and terms to apply.
2. Start the Online Form
Go to Leap’s website and click “Get Started – It’s Quick & Easy!” to begin the quick application.
3. Enter Loan & Personal Information
Provide details on your existing loans, income/employment, contact information, and demographic data through the form fields.
4. Review & Electronically Sign
Review all entered application details for accuracy before submitting. Then, sign documents electronically with your name.
5. Get Decision & Rates
For approved applications, you’ll instantly receive personalized fixed and variable rate quotes to choose from.
6. Accept Refinance Offer
If you find an offer that meets your needs, click accept to continue the refinance process.
7. Funding & Transfer of Loans
Once funded, Leap will take over your existing loans and begin managing repayment of your new consolidated refinanced loan.
The entire process takes about 10-15 minutes. Within just days, you can be fully approved, funded, and transitioned onto your new post-refinance loan terms if approved by Leap.