Citizens Bank Student Loans and Refinancing Review in 2020

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Citizens Bank Student Loans and Refinancing Review in 2020

Citizens Bank is an American financial institution that provides student loans, student loan refinancing, and other financial services to students and fresh graduates. Founded all the way back in 1828 and based in Rhode Island, Citizens Bank is known throughout the United States for the Citizens Bank student loans (private and refinancing), that’s available even to non-U.S. citizens, as well as, personal loans.

The bank currently offers financial aid to students currently in college or just about to graduate. Over time, their refinancing option has become very viable for international students, or those who couldn’t graduate for some reason.

Citizens Bank Student Loans: Private Student Loans Review

Citizens Bank’s private student loan offering is called Citizens One Student Loan, and is best for international students who have a qualified co-signer. The loan is rigid, since it’s designed for students who won’t need to lower or postpone payments in the future.

The bank has a competitive product, but doesn’t actually offer a safety net for borrowers who may struggle to pay back their loans. They do have a 12-month forbearance period, for both domestic and international students.

The Citizen One student loans program is unique in the way that if offers multi-year approval. This means that after students pass freshman year, they can apply for loans for subsequent years, without having to undergo a hard credit check. This option is only for domestic students, since international students have to apply with a co-signer.

Citizens Bank Student Loan Details

The Citizen One private student loan requires a hard credit check to qualify and to determine what interest rate the applicant will get. This is for the single-term loan, as multi-year loans only require soft credit checks.

The loan terms are 5, 10, and 15 years, for an amount ranging from $1,000 to $100,000 (up to the cost of attending school at the applicant’s chosen institution). There is no origination or application fee and no penalty for prepayment, either. However, there is a late fee (5% of the total monthly payment amount, charged 15 days after the payment due date).

In addition, the actual interest rate that students get will depend on their and their co-signer’s credit history, as well as, the overall financial situation. This makes it important to ensure there is no history of financial default for both the applicant and the co-signer.

Citizens Bank Student Loan Eligibility Criteria

Here are the requirements for the Citizen One private student loan:

  • Minimum Income: Undisclosed (regular monthly income is mandatory).
  • Minimum Credit Score: Undisclosed (without any history of default-related drop in credit score).
  • Typical Approved Borrower Income: Undisclosed (typically decided on a case by case basis).
  • Qualification Despite Bankruptcy: Undisclosed.
  • Maximum Debt-to-Income Ratio: Undisclosed (typically 50%).
  • Citizenship: Applicants must be U.S. citizens or international students with a co-signer who is a U.S. citizen or permanent resident.
  • Loan Availability Location: Currently, the loan is available in all 50 states.

In addition, applicants must be enrolled in a degree-granting institution, pursuing a bachelor’s degree or higher, on at least a half-time basis.

Citizens Bank Student Loan Repayment Options

For in-school borrowers, the repayment term starts as soon as the loan amount is disbursed to the borrower. This option saves the borrower from paying extra interest.

The interest-only payment options let borrowers pay back the interest amount on the loan during the grace period and/or during their time in school.

Citizens Bank also allows for deferred payments, which lets borrowers have a grace period of 6 months before they are required to start paying back. However, borrowers can still make payments if they want to reduce their total accrued interest even further.

The interest amount will either accrue and capitalize while the applicant is still in school, or it may be added to the principal balance towards the end of the grace period.

For post-school repayment options, there is a grace period of 6 months, during which no payments are required. Once again, students can choose to make payments during this time, if they want to reduce the total interest they’ll have to pay on the principal amount.

There is an academic deferment option that lets borrowers postpone payments in case they have to return to school. They will have to be enrolled at least on a half-time basis to get an academic deferment. There is also a military deferment option that lets borrowers who are military members postpone their payments while they are on active duty.

The Citizen One student loan comes with a forbearance option for borrowers experiencing financial hardship. They can postpone payments up to 12 months on forbearance. In addition, students can extend the grace period for up to 6 months. This allows them to explore the job market for a period of time after they graduate, without having to worry about paying back student loans.

Citizens Bank Student Loans Pros and Cons

Here are some of the reasons why you should and shouldn’t take out a Citizens Bank private student loan:

Pros

  • International students can apply without a hassle.
  • Loyalty discount for existing customers of Citizens Bank.
  • Grace period extension up to 6 extra months.

Cons

  • You need to be pursuing a bachelor’s degree or higher to qualify.
  • A hard credit check is needed to see if you qualify and what interest rates you’ll get.

Basically, the loan is best for international students with a financially secure co-signer, or existing customers of the bank. Plus, the bank allows some leeway in terms of grace period extension for international students who are its customers.

The Verdict

Overall, the Citizen One private student loan provides maximum benefit to international students. This is not to say it won’t be a good choice for domestic applicants, seeing as it offers extensions on payments and the grace period for the latter.

The bank also allows for co-signer release after 36 consecutive, on-time payments have been made. This is especially beneficial for international students not looking to stay dependent on a co-signer to qualify for refinancing.

Citizens Bank Student Loan Refinancing Review

Citizens Bank offers student loan refinance for borrowers who want to unify their loans into one. Refinancing is better for borrowers who are financially stable enough to be able to make payments on time, for the entirety of the loan period.

In addition, Citizens Bank student loan refinancing benefits international students who are looking for additional financial aid, on top of the loans they have already taken out. It allows them to benefit from the education loans in the same way that U.S. citizens and permanent residents do.

For now, the bank allows borrowers without a degree to refinance their loans (pending approval).

Citizens Bank Student Loan Refinancing Details

Citizens Bank loan refinancing is available with only a soft credit check. This helps borrowers retain good credit, and get better interest rates.

The loan terms are 5, 7, 10, 15, or 20 years, for an amount ranging from $10,000 to $500,000. Borrowers are allowed to transfer a parent loan to a child (some terms and conditions apply to transference). There is no origination fee or application fee, and no penalty for prepayment. There is, however, a late payment penalty of 5% of the monthly payment amount, charged 15 days after the payment due date.

All of the above applies to both domestic and international students, albeit with a co-signer.

Citizens Bank Student Loan Refinancing Eligibility Criteria

Citizens Bank does not disclose details about eligibility criteria for student loan refinancing. This is partly because they evaluate candidates on a case by case basis, and because they generally consider applications from financially stable applicants.

Like other lenders, Citizens Bank looks for good credit history, good current credit, and enough monthly income to pay off the monthly refinancing dues. However, while other lenders have specific criteria, Citizens Bank simply decides based on how strong an applicant is in these areas.

All eligible non-citizens and international students in all 50 states can apply for refinancing with a co-signer. Applicants don’t have to have graduated, but they will need to be enrolled in a qualified institution on at least a half-time basis.

Citizens Bank Student Loan Refinancing Repayment Options

Borrowers have to make monthly payments for the entire loan period, without defaulting, in order to become eligible for refinancing. In case they are applying for refinancing in the middle of a loan period, they will need to have made regular payments up to that point.

Citizens Bank provides a number of deferment options to borrowers from all walks of life. The academic deferment option lets borrowers postpone their payments for the remainder of the school term, in case they return to school to complete a degree.

A military deferment option lets military personnel on active duty postpone their payments until they have completed their deployment (domestic and/or overseas). In addition, there is a forbearance option that allows borrowers to postpone payments for as long as they are unable to pay due to financial hardship.

Citizens Bank student loans are only available through co-signers, which is why the bank offers co-signer release after 36 months of regular payments. The payments have to cover both the interest and principal amounts.

Most lenders offer refinancing as an income-based repayment plan. Citizens Bank is no different. However, its competitive rates and the opportunity to postpone loan payments if you’re going through a tough time financially make it a step above other lenders.

Citizens Bank Student Loan Refinancing Pros and Cons

Here is everything good and bad about Citizens Bank Student Loan Refinancing:

Pros

  • Borrowers only need a soft check to qualify.
  • Parent PLUS loans can be refinanced.
  • Citizens Bank customers with a savings account or checking account get a 0.25% discount on their interest.
  • There are variable interest rates (rate reduction) for customers of the bank.

Cons

  • Repayment plans are not as flexible as with some other federal loans.
  • There are no specific terms for forbearance.
  • Borrowers cannot make bi-weekly payments through auto-pay.

The bank doesn’t disclose a lot of the details related to eligibility and credit score requirements. This leaves out a number of potential applicants who would otherwise maintain a bank account as loyal customers, even after paying back their refinancing amount in full. Still, Citizens Bank does redeem its refinancing offering by opening it up to international students.

The Verdict

The vast majority of reviews about Citizens Bank say the same thing, that both the private student loan and education refinance loan have rigid requirements that aren’t disclosed to potential applicants.

This does turn a lot of people off from their offerings. However, the bank has maintained a policy of only providing loans to financially stable borrowers who have exhausted their subsidized and unsubsidized federal student loan options. It has stayed transparent about this policy, as well.

Despite this, Citizens Bank offers extended forbearance that can last as long as the applicant is going through economic difficulty. This, combined with the fact that they offer easy student loans and refinancing to international students, makes them very viable for the latter, and for those who can’t immediately start paying back their loans.