Refinance Student Loans: Best 10 Lenders [Expert Review]

Refinance Student Loans: Best 10 Lenders [Expert Review]

Are your student loan monthly payments making your bank account fall into the red? Maybe it’s time to do something about it. If you are considering getting student loan refinancing, make sure you get the best lender according to your needs.

I’ll show you a list with the 8 best lenders in 2019 for you to refinance your student loan to ensure you get a better deal. Also, I’ll help you understand how student loan refinancing works, its advantages and disadvantages, and other ways to pay off your student debt fast.

Let’s take a look:

Best 8 Student Loan Refinance Lenders in 2019

1. Earnest

Earnest

Earnest is an online lender created in 2013 and has refinanced up to 50,000 borrowers. The company’s mission is to make credit more accessible by reducing the costs that millions of financially responsible people face today.

Lender: Online

Loan types: Graduate, undergraduate, MBA, refinance

Rate: Variable and fixed

Servicer: Earnest

Terms: 5 to 15 years

Loan amounts: + $5.000

BBB Rating: A+

Variable interest rate: 2.15% – 6.80%

2. SoFi

sofi

SoFi is an online lender that has been offering student loans and refinancing services since 2011. The company has refinanced the debt of more than 250.000 American students since its creation. You can apply online and get response and approval in a short amount of time.

Lender: Online

Loan types: Undergraduate, graduate, MBA, refinance

Rate: Variable and fixed

Servicer: MOHELA

Terms: 5 to 20 years

Loan amounts: + $5.000

BBB Rating: A+

Variable interest rate: 2.05% – 6.50%

3. Laurel Road

Laurel Road refinincing student loan

Laurel Road is a side project of KeyBank founded in 2013. The company has helped thousands of borrowers pay for college with a competitive interest rate. The company only offers refinancing services to graduate students.

Lender: Bank

Loan types: Graduate, resident, refinance

Rate: Variable and fixed

Servicer: KeyBank

Terms: 5 to 20 years

Loan amounts: + $5.000

BBB Rating: A+

Variable interest rate: 2.25% – 6.65%

4. Splash Financial

Splash Financial is a lender that offers refinancing services in the US. They work with private, federal, and parent plus loans to offer complete refinancing services to all its borrowers. Unlike most online lenders which loan amounts start somewhere under $10,000, minimum loan amounts with Splash Financial start at $75.000.

Rate: Variable and fixed

Terms: 5 to 15 years

Loan amounts: $75.000 to $300.000

BBB Rating: A+

Variable interest rate: 2.43% – 7.60%

5. Education Loan Finance

education loan financial

Education Loan Finance is an online lender that has been around since 2015. It is a division of SouthEast bank and it has an experienced team specialized in student loans. The minimum loan amount is $15.000.

Lender: Bank

Rate: Variable and fixed

Servicer: SouthEast Bank

Terms: 5 to 20 years

Loan amounts: + $15.000

BBB Rating: A+

6. LendKey

Lend key

LendKey is a lender that has been around since 2019. It is one of the oldest lenders on this list and it was founded just after the 2008 recession. Today, the company is the end-to-end lending partner of hundreds of banks and credit unions.

Lender: Online

Loan types: Graduate, undergraduate, refinancing

Rate: Variable and fixed

Servicer: LendKey

Terms: 5 to 20 years

BBB Rating: A+

Variable interest rate: 2.06% –  8.93%

7. Discover

refinancing student loan

Discover is an online lender that offers features and services that you can find in many traditional banks. It offers competitive interest rates and the minimum loan amount is $1.000, which makes it the lowest amount on this list.

Lender: Online

Loan types: Undergraduate, graduate, MBA, refinance

Rate: Variable and fixed

Servicer: Discover

Terms: 15 to 20 years

Loan amounts: + $1.000

BBB Rating: A+

8. Citizens Bank

citizens-bank-student-loan-refinancing

Citizens Bank is a traditional bank based in Rhode Island and can be traced as far as 1828. The company’s lending division called Citizens One is one of the few lenders that also lets non-US citizens apply for refinancing student loans.

Lender: Online

Loan types: Undergraduate, Graduate, Refinancing

Rate: Variable and fixed

Servicer: Citizens Bank

Terms: 5, 7, 10, 15 or 20 years

Loan Amounts: $10,000 to $500,000

BBB Rating: A+

Variable interest Rate: 3.15% – 11.26%

Fixed Interest Rate: 4.72% – 12.04%

9. College AVE

college-ave-student-loan-refinancing

College Ave is an online lender that specializes in both, private student loans and student loan refinancing. It was found in 2014 and currently provides plans that help students make payments while they’re in school.

Lender: Online

Loan types: Undergraduate, Graduate, Refinancing

Rate: Variable and fixed

Servicer: College Ave

Terms: 5 to 20 years

Loan Amounts: $1,000 to $80,000

BBB Rating: A+

Variable interest Rate: 2.74% – 6.24%

Fixed Interest Rate: 3.54% – 6.24%

10. Credible

credible-student-loan-refinancing

Credible is an online lender that was found in 2012 and is headquartered in San Francisco. It acts as the middleman and has 10 lenders that can back you. None of these lenders have any effect on your credit score. The company has no service or origination fee and has no prepayment penalty.

Lender: Online, Multiple

Loan types: Undergraduate, Graduate, Refinancing

Rate: Variable and fixed

Servicer: Credible

Terms: 5 to 20 years

Loan Amounts: $1,000+

BBB Rating: A+

Variable interest Rate: 2.05%+

Fixed Interest Rate: 3.29%+

What Does it Mean to Refinance a Student Loan?

Student loan debt is a major thing in the United States. According to the Chamber of Commerce, the total student debt rises up to 1.5 trillion dollars only in federal debt. In addition, other 45.5 million are owed to private lenders.

The question is, why is it so difficult to pay off the total amount of your student debt? In the first place, the sheer amount you owe can be enough to make your income look like a droplet in a pool. In addition to this, the interest rate can add up a significant extra amount of money you might not produce fast enough.

Here is when student loan refinancing comes in handy. When you go to a private lender to get your student loan refinanced, the company pays off your debt completely and creates a new payment plan that, in most cases, gets to reduce the previous interest rate you were paying.

In other words, the debt you had with the government or other private lenders, is now a debt you have with the private lender you choose. This with the objective of reducing interest rates, combining several loans into one, or adjusting the monthly amounts you want to pay.

Refinancing your debt can be a smart strategy that can help you save even thousands of dollars in the long term. Also, you can choose a plan that will make it easier for you to pay off your debt without falling in the red every month.

Is Refinancing Your Student Loan the Best Option for You?

Finding a private lender that pays off your debt for you and then offers you a lower interest rate sounds like something everybody should do, right? Well, that depends. Refinancing your student debt can be a smart move, that’s for sure. But, refinancing your debt is more than that, which means we have to take a look at the bigger picture.

What Are the Disadvantages of Refinancing Your Student Loan?

The first and most obvious disadvantage is turning your debt private. Though it is true that a federal loan might not offer you the best interest rate, turning to a private lender means that you will lose access to some federal programs including the Public Service Loan Forgiveness Program.

Moreover, not every private lender offers special programs or solutions if you find yourself in financial problems. Actually, lenders will often warn you before you acquire a private loan refinance service and most times they’ll suggest you have stable finances and emergency savings before you take the risk.

Refinance vs Federal Consolidation

If you don’t want to lose the possibility to qualify for federal programs or loan forgiveness, you can consider getting federal consolidation. This program will allow you to combine several federal loans into one and choosing paying terms that are suitable for you. However, federal consolidation will not help you lowers interest rates.

On the other hand, turning to a private lender will help you lower interest rates and consolidate all your loans into one, choosing the best paying terms for you; however, you will be renouncing to federal programs.

What’s the best option for you, then? Well, that depends. You have to make a full assessment of your financial status and stability, possible federal programs you might qualify for, such as the Income-Driven Repayment Program and the total income you make a month.

After evaluating your situation, you can decide what’s suitable for you. If you do find that a private lender will give you more benefits, you need to find out if you qualify to turn your loan into a private one.

What Are the Requirements to Refinance a Student Loan?

Student loan refinancing eligibility varies from lender to lender, but most companies take the following aspects into consideration before deciding if you are eligible or not:

  • A good FICO credit score

Most private lenders will ask borrowers to have a minimum FICO credit score of 650. However, you should try to have a higher score to qualify for the best low-interest plans.

Having a credit score under 650 won’t be enough to get your student loan refinanced, so in this case, your best option is to stick with your federal loan and try to apply for federal programs instead.

  • A clean and good credit history

Not only is a credit score of 650 important. Lenders will look at your credit history regardless of your score. They will often look for things like derogatory marks that might be valid reasons not to qualify for refinancing. Avoid having late payments in your history to be a better candidate.

  • A good DTI ratio

The DTI ratio is your total monthly debt payments divided by your monthly income. Lenders will often look for a low DTI ratio, as this shows them that you have more money in your monthly income to pay for the loan. Lenders who let the borrowers know their maximum DTI in between 40% and 50%.

  • Your current status

You will only be eligible for some lenders under specific circumstances. Many of them only refinance graduate students while others only refinance specific degrees. Also, some companies will only accept to refinance private loans.

  • Your location

Some lenders have state restrictions, which means they can only serve in the same state where they operate. Therefore, you have to find a lender that works across the country if you are not located in specific regions.

Other Ways to Pay Back Your Student Loan

Going to college is expensive, that’s for sure. Though some degrees are more expensive than others, it doesn’t matter what major you choose, you will have to spend at least twenty-five grand in a moderate public school.

It is no wonder why so many Americans decide to turn to private lenders or federal loans to cover their college expenses. The truth is that only a small percentage of people have the money to afford college.

According to the Chamber of Commerce, the total student debt increased by 78% from 2006 to 2016, and this tendency continues to increase.

A recent U.S. News survey concluded that 63% of borrowers don’t regret taking out student loans; however, they admit that it affects their long term goals. This is why there are so many people finding different ways to pay for their student loans

How Can You Pay Back Your Student Loan?

1. Get a Grant

An effective way to pay off your student debt faster is getting a grant that allows you to save thousands of dollars. Unlike student loans, grants are financial gifts created to help you pay for college in an easier way.

Now, when I say grants, I’m not only talking about scholarships. There are certain grants that will help you if you are a graduate student. Check out this post if you want to know more about it.

2. Get a Scholarship

If you have a remarkable score in college and you meet certain requirements, you can apply for a scholarship to help you pay for fees and tuition. There are organizations that offer scholarships for specific degrees, such as medical school scholarships, that will help you big time.

Some scholarships offer up to $10,000 of financial help for you to complete your major.

3. Consider an Income-driven Repayment Plan.

These plans are available for federal loans and they will help you pay a reasonable monthly amount based on your income. This program describes three different repayment plans and they all work differently. Income-driven repayment plans can be an option if your monthly payments are taking too much from your monthly income.

4. Tuition Installment Plans

Sometimes the best way to avoid having debt is to not take out student loans. Some people have the possibility to pay for college without getting student loans, but they can’t afford to pay the whole semester or quarter upfront. When this is the case, you don’t have to consider getting a student loan.

Instead, sign up for a tuition installment plant so you can pay for college on a monthly basis. There are some colleges that offer these plans, but if that is not your case, there are external providers such as TuitionPay that can help you out with this.

It’s important to remember that getting an education is always possible and there are many options for you to pay for it. Whether getting a student loan, refinancing, grants, or scholarships, becoming an educated professional is always in reach with the right resources and mindset.