5 Best Student Loan Refinance Companies in May 2020

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5 Best Student Loan Refinance Companies in May 2020

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 5 best lenders in 2020 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 deeper look at the best refinance loan lenders:

5 Best Student Loan Refinance Companies in 2020

1. 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: 1.58% – 8.28%

2. 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:3.50% to 8.72%

3. 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: 2.7% – 7.87%

Fixed interest rate: 3.39% – 7.75%


4. College AVE


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: 3.89% – 9.24%

Fixed interest rate: 4.89% – 9.24%

5. Credible


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?

Americans are more burdened by student loan debt than ever owing more than $1.64 trillion in student loan debt, spread out among about 45 million borrowers.

When you refinance student loans, you take out a new loan from a private lender to pay off one or more of your old loans. If you qualify, you’ll have a new payment plan and repayment terms that, in most cases, get you a lower rate of interest to pay off your debt faster or lower your monthly bills.

Eligible borrowers can refinance student loans to achieve a number of objectives, such as:

  • Saving money on interest with a lower rate
  • Adjusting your monthly payments to match your goals
  • Combining multiple loans into one, simple repayment
  • Removing a cosigner from your debt
  • Switching to a new loan servicer with better customer service

Whatever your goals, refinancing your debt can be a smart strategy that can help you save thousands of dollars in interest and shave years off the life of your loans.

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 and possibly a variable rate sounds like something everybody should do, right? Well, that depends. Refinancing your student debt or student loan balance 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 has fixed rates and it might not be the best interest rate, turning to a private lender means that you will lose access to some federal programs and repayment options including the Public Service Loan Forgiveness Program.

Moreover, not every private lender offers special programs, a deferment plan or solutions if you find yourself in financial problems. Actually, lenders’ loan terms 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 direct consolidation loan and choosing paying terms that are suitable for you. However, federal consolidation may lower monthly payments numbers by turning them into a single monthly payment but it will not help with the interest rate reduction.

On the other hand, turning to a private lender will help you lower interest rates and consolidate your current loan or loans into one, choosing the best 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 and whether you want to opt for student loan consolidation. 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 Student Loans? 

 Student loan refinancing eligibility varies from lender to lender; some may offer lower but fixed interest rates, some may need you to be permanent residents, while others may accept automatic payments. But most companies take the following common 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 give you a credit report that is good enough to get your student loan refinanced with the lowest rates, so in this case, your best option is to stick with your federal loan and try to apply for a suitable federal loan program instead.

  • A clean and good credit history

Not only is a credit score of 650 important. Lenders will also run a credit check to 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 Debt-to-Income Ratio or DTI ratio is your total monthly debt payments divided by your monthly income. Lenders will often look for a low DTI ratio, as this meets their income requirements for the borrowers. A lower DTI ratio 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. Among the Class of 2019, 69% of college students took out student loans, and they graduated with an average debt of $29,900, including both private and federal debt. Meanwhile, 14% of their parents took out an average of $37,200 in federal parent PLUS loans.

Student debt in the United States has nearly tripled since 2007, rising from approximately $545 billion to over $1.5 trillion today. Student debt is the second-largest category of household debt in America, second only mortgages at $9 trillion. Relative to national income, it has quintupled since the start of the Global Financial Crisis, according to the Federal Reserve.

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.

The income-based repayment 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. These plans do not change your interest rate, which means your debts do not become variable rate loans.

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.