STUDENT LOAN CONSOLIDATION & REFINANCING LENDERS FOR 2017
Looking to refinance student loans? Want to consolidate student loans?
Today, the answer to that question is probably yes! 7 out of 10 graduates are now graduating with some form of student loan debt. With an average balance of $28,400, student debt is a big part of the average college graduate's life.
That being said, not all student loans are created equal. Interest rates on student loans usually vary by loan type, rate type, and credit worthiness. If you find yourself paying 4% to 10% in interest each year, you are paying too much.
Over the last couple years student loan refinancing and consolidation has become a hot topic in the United States. As it sounds, refinancing allows undergraduate and graduate borrowers to refinance student loans at a potentially lower interest rate.
Student loan refinance rates can be as low as 2.21%. Refinancing to lower rates can save some borrowers upwards of $20,000 over the life of their loan! Also, you can consolidate multiple student loans into one when refinancing.
At LendEDU, we help borrowers compare the top student loan companies in one place. We put together this guide to help you get information on all of the top student loan refinance lenders without having to jump around multiple websites. After you are done, you will know how to refinance student loans and how to consolidate student loans.
Below we've ranked the leading student loan refinancing companies. It is free to apply, and the process usually takes about 15 minutes. How much could you save? Find out today! In just 15 minutes you might be able to save $20,000.
2.365% - 6.740%
Variable & Fixed
5, 7, 10, 15, 20
2.88% - 7.35%
Variable & Fixed
5 - 15
2.39% - 8.24%
Variable & Fixed
5, 10, 15, 20
2.21% - 7.26%
Variable & Fixed
5, 7, 10, 15, 20
2.55% - 6.64%
Variable & Fixed
5 - 20
2.32% - 7.74%
5, 7, 10, 15, 20
*Citizens Bank Disclosure
Top 6 Companies for Student Loan Refinancing: In-Depth Reviews
2. College Ave Student Loans
3. Citizens Bank
Top Lenders for to Refinance & Consolidate Student Loans With
You may now have a general idea of how to refinance student loans and how to consolidate student loans, as well as the basics of what each lender offers, but there is much more information you should know before choosing a lender. There are many different benefits and drawbacks of what each student loan consolidation and refinancing lender offers, and it is important to be aware of all of them. You will find all of the necessary information below.
Before you start an application, you should know that most lenders require a minimum FICO credit score of 660, 40% maximum monthly debt-to-income, and $24,000 in yearly gross income. If the requirements above sound good, we think that you are a great applicant for student loan refinancing and consolidation. Each lender has its own specific underwriting criteria, so you may have a higher chance of approval at certain lenders. Read the detail lender reviews for more information regarding lender approval. We hope after you are done you can make the best choice to refinance your student loans with.
1) SoFi Review
Student loan refinance is a hot topic these days. Today, there are a number of new private consolidation companies looking to help borrowers improve their financial health. Our favorite, SoFi, aka Social Finance, has quickly positioned itself as the top student loan refinance lender on the market. SoFi was founded by a group of Stanford business students who wanted to help their peers escape from student loan debt with lower interest rates. The program launched at Stanford in 2011 and has quickly grown. Today, SoFi has expanded and now helps student debt borrowers to refinance student loans nationwide.
SoFi offers borrowers refinancing and consolidation services. Borrowers can select the loans they would like to refinance or consolidate, then SoFi pays them off, and then the borrowers pays off a new loan issued from SoFi. SoFi aims to help undergraduate and graduate borrowers lower their monthly payments and get lower interest rate loans.
SoFi offers borrowers a number of great options. SoFi offers both variable and fixed interest rate loans. Borrowers can select from 5, 7, 10, 15, and 20 year repayment plans. The fixed rate loans start at 3.375% and have a maximum possible rate of 6.740%. The variable rate loans range from 2.365% to 6.290%, and they are tied to the LIBOR rate. If interest rates do happen to rise, variable interest rates will be capped at 8.95% to 9.95% APR. There are no penalties for paying off your loan early. Borrowers are expected to make payments on a monthly basis. The company offers an interest rate discount of 25 basis points if you sign up for auto-pay. Signing up for auto-pay is easy and SoFi’s customer service support staff can help you through the process if you run into any trouble.
SoFi doesn’t charge origination fees when you refinance student loans through them! Origination fees are fees charged to borrowers for taking out a loan. These extra costs are usually added to the principal of the loan. SoFi has zero prepayment penalties! At any time you can pay off your loans early. Whether you are looking to pay $100 extra each month, or are using that year end bonus to pay off your loans, you can be sure that you won’t be charged any fees for paying early.
SoFi makes refinancing student loans simple. The company claims that it only takes 15 minutes to start saving. Fill out a quick application, see if you're approved, and refinance your student loans - simple as that! SoFi even makes it super easy to figure out how to consolidate students loans into one, refinanced loan.
SoFi has a unique and proprietary approach to underwriting. SoFi takes a number of dimensions into consideration including alma mater, professional success, and income.
SoFi has awesome customer service! If you run into any problems along the way give them a call. Unlike the big old banks, SoFi understands that customer service is an important piece of the equation.
SoFi is looking for well educated professionals with good income. Like most other lenders who refinance student loans, you should have good credit and low debt loads. According to American Banker, SoFi focuses primarily on prime and super-prime borrowers, with an average borrower FICO score of 780 and income of approximately $150,000.The SoFi student loan refinance and consolidation program is a great option for people who want:
- Low interest rate options
- Term length options
- Great customer service
- Quick application process
At LendEDU, we give SoFi our stamp of approval for refinancing your student loans. To get started you can start the application at SoFi!
- Refinance & consolidate both federal and private student loans
- Must have completed an eligible undergraduate or graduate degree program
- Undergraduate and graduate student loans are both eligible
- 5, 7, 10, 15, 20 year repayment terms
- 2.365% APR to 6.290% APR (with autopay) variable rates, capped at 8.95% to 9.95% APR
- 3.375% APR to 6.740% APR (with autopay) fixed rates
- Auto-pay discount
- Strong credit score, salary, and debt-to-income requirements
- Zero prepayment penalties
- Zero origination fees
- Unemployment protection – loan payments are temporarily suspended
- Career support for SoFi members
- Entrepreneur program
2) College Ave Student Loans Review
College Ave Student Loans is a leading provider of student loan refinancing and student loan consolidation. Founded in 2015, College Ave is leading the way with low interest rates and the fastest turnaround time in the industry,
There are two types of interest rates available to choose from: fixed or variable. Variable interest rates fall within a range of 2.88% to 6.13% APR while fixed interest rates vary between 4.75% and 7.35% APR. Keep in mind, these rates are the lowest possible rates after the application of the interest rate discount (0.25% reduction when making automatic debit payments).
Aside from flexibility, College Ave Student Loans makes the application process simple and easy. Applications are quick and to the point with no additional hidden fees throughout the process. The College Ave application process takes only 3 minutes. Most other applications take 30 minutes to complete. College Ave also really makes it easy to figure out how to consolidate student loans into one!
Multiple repayment terms are available to borrowers who want to refinance student loans. The lowest term to choose from is five years; on the contrary, the longest repayment term is up to fifteen years. Different payment lengths can be chosen so long as they fall within the range that is specified.
After refinancing is completed, borrowers may choose between two different repayment options. Individuals have the option to make full principal and interest payments immediately after disbursement. If this is too much too soon, customers have the option to defer principal payments for two years while making interest payments.
There are no application or origination fees when refinancing and consolidating student loans with College Ave. The process to apply for is simple and easy: one of the most noted aspects of College Ave.
College Ave Benefits
College Ave offers an incredible amount of flexibility. College Ave offers multiple repayment terms with a wide range of interest rates. Whether you are looking for a fixed rate, a variable rate, or an interest only repayment plan, there are plenty of options to consider. College Ave is one of the only companies to offer an interest only payment option for 24 months.
One of the best benefits offered by College Ave is a 0.25% interest rate deduction with auto-pay. This interest discount is applied if automatic electronic payment deposits are being made on an account. Keep note that every interest rate stated in this article is after the application of this discount.
You can even consolidate federal and private loans together!
Any borrower who is approved can consolidate student loans through College Ave. It is a newer company, so there are less reviews out there, but we do highly recommend College Ave to any borrowers who want to refinance student loans.
College Ave is a great choice for undergraduates, graduates, and parents interested in:
- Low interest rates
- Flexible payment term options
- An easy application process
- Fast application process
- Variable Interest rates: 2.88% – 6.13% APR (with discount)
- Fixed Interest Rates: 4.75% – 7.35% APR (with discount)
- Payment terms ranging from 5 to 15 years
- Two different payment options
- Full principal and interest payments made immediately
- Interest only payments for two years
- $0 in application and origination fees
- Loan minimum: $5000
3) Citizens Bank Review
Navigating through the seemingly countless number of options for refinancing and consolidating your student loans can often be a daunting task. This is why we at LendEDU are trying to help borrowers navigate through the options to choose the one that will save them the most money. Citizens Bank is one of the most well-known companies that refinance student loans - and they are also one of the best. As the 13th largest retail bank with over $130 billion in assets and over 1,200 branches, Citizens Bank offers many unique options and benefits for those looking to save money on their student loans. If you are one of these people, it would be in your best interest to strongly consider Citizens Bank. They make it easy to figure out how to refinance and consolidate student loans.
Like many of the other lenders, borrowers can refinance and consolidate their student loans in order to reduce their interest rates or monthly payments. If you end up choosing Citizens Bank, they will pay off whichever of your student loans that choose and issue you a new one. This new loan will either save you money over the life or make your monthly payment more manageable depending on the structure that you choose. On average, the average Citizens Bank customer saves $1,644 per year!
Citizens Bank offers a variety of attractive options for customers. To start, the company offers both variable and fixed interest rates. Variable rates start at 2.38% while fixed rates may be as low as 4.74% - some of the lowest in the industry. Fixed rates stay the same over the life of the loan but variable rates fluctuate according to the LIBOR. Citizens Bank also offers repayment plans of 5, 10, 15, and 20 years. The minimum amount of student loans to refinance is $10,000. As with SoFi, Citizens Bank charges no application, origination, or prepayment fees, and borrowers can save 0.25% on their interest if they sign up for auto-pay.
Citizens Bank Benefits
As mentioned above, there are no fees associated with refinancing and consolidating student loans through Citizens Bank. This means that you can apply for free and, if approved, you will not be charged anything for accepting the company's offer. Finally, if you happen to have some extra cash to put towards your student loan payment, you will not be penalized for doing so.
If you are interested in working with Citizens Bank, you can apply on the company's website in about 15 minutes. The process if fairly straightforward and easy to do. Once you apply, Citizens Bank will run an initial credit check to determine if you may be eligible. If you meet the initial requirements, you will be asked to upload certain documents that help Citizens Bank's underwriting team to determine if you actually qualify.
One of the greatest things about Citizens Bank is its 24/7 customer service. The company has people standing by to help you at any point along the process, whether you are just applying to refinance student loans or already have a loan with it.
In addition, Citizens Bank offers some great resources to help borrowers determine what they should do. On the Student Services section of the website there is an Education Refinance Loan Calculator, a College Savings Goal Calculator, and even a calendar to track student loan payments.
Though Citizens Bank offers competitive rates, some other companies have lower minimums. This, however, does not mean that you will automatically receive a lower rate elsewhere. Each lender has its own eligibility criteria and you may actually receive your lowest rate at Citizens Bank.
The Citizens Bank student loan consolidation and refinance program is one of the best options for people who want:
- A wide variety of term length options
- A lower interest rate
- Unparalleled customer service
- A quick and easy application process
Here at LendEDU, we give Citizens Bank our highest recommendation. To get started, apply at Citizens Bank today!
- Refinance and consolidate both federal and private student loans
- Are no longer in school
- 5, 10, 15, and 20 year repayment plans
- 2.39% APR (with autopay) for variable interest rates
- 4.74% APR (with autopay) for fixed interest rates
- Strong credit score, secure job, lower debt-to-income requirements
- Zero application, origination, or prepayment fees
- 24/7 customer service
4) LendKey Review
Finding the best refinancing or private consolidation company can be tough. Each lender has its own set of criteria, interest rates, and term lengths. Moreover, each lender brings something unique for borrowers. Cosigner requirements, credit score minimums, and customer service can vary at each lender.
At LendEDU we work with only the top companies who refinance student loans and consolidate student loans. One company trying to help borrowers is LendKey! At the end of the day LendKey brings local credit unions to the table for borrowers. The result, great customer service and interest rate options for borrowers.
LendKey is more than just a single company. LendKey is a collection of not-for-profit credit unions and community banks from across the U.S.A. The participating lenders work together to compete against major lenders. The result, great interest rates are available for borrowers. And, with over 320 credit unions participating in the program you can be sure that there is an option available for you! There are no geographical requirements!
The lowest interest rate that LendKey currently offers is 2.22% at a variable rate. Fixed rates, alternatively, start at 3.25%. They also require a yearly income in excess of $24,000. Today, the company allows borrowers to refinance and consolidate both federal and private debt. This is great for borrowers who are stuck paying high interest rates on their old federal and private debt.
LendKey charges NO origination fees which can help borrowers save money! Moreover, cosigner release is an option after 12 months.
As far as credit criteria goes, LendKey requires borrowers to have a decent credit score and an average debt-to-income. LendKey has good approval ratings, so definitely apply, even if you are on the fence. We found that many of our users were approved at LendKey. LendKey evaluates each borrower on a case-by-case basis.
LendKey offers term lengths of 5, 10, 15 and 20 years. There is no penalty for paying off your loan early, and borrowers can have up to four years of interest only payments. Borrowers are expected to make payments on a monthly basis. The company offers an interest rate discount of 25 basis points if you sign up for auto-pay.
The first part of the application should only take a few minutes to complete. If approved, applicants are expected to join the local credit union that will be providing the financing. Credit unions usually require a small deposit for membership. In most cases borrowers will need to deposit $1 to $20 to gain access to a credit union. A $5 deposit is a small price to pay for great customer service and interest rates. Don’t worry, the LendKey representatives can help you if you run into any trouble along the way!
LendKey Consolidation Benefits
LendKey offers borrowers a personal experience. Borrowers will receive a friendly credit union experience, vs. typical treatment from a big bank. Credit unions operate for their members (you!) and only the members. All earnings are redistributed back to the members so you can be sure that every lender on the LendKey platform has your back. The company doesn’t have any shareholders or investors so they can focus all of their attention on you!
LendKey has zero origination fees! Origination fees are fees charged to borrowers for taking out a loan. These extra costs are usually added to the principal of the loan. But with LendKey you can avoid these costs all together. By not having an origination fees, LendKey makes it easy to compare the value of a consolidated loans against the current loans that the borrower already has.
LendKey has zero prepayment penalties! For people working to pay off their student debt quickly, zero prepayment penalties are important. Some lenders charge borrowers when they pay off their loans early. LendKey puts the borrowers first and will never charge you if you pay off your debt early; so if you come into that year end bonus, you don’t need to fear paying off your loans early.
LendKey has cosigner release available! Meaning, cosigners can be released from the debt obligation after 12 months of on-time payments! This is a big deal. Not many lenders even offer cosigner release as an option to borrowers. Again, LendKey puts it borrowers first, and not corporate profits! This one year release is by far the shortest release on the market. With cosigner release you can positively influence your cosigner’s credit score too.
The major disadvantage is that LendKey is a newcomer in the student loan consolidation market.
The LendKey refinancing and debt consolidation program is a great option for people who want:
- Cosigner release after 12 months of on-time payments
- Low interest rates
- A personal approach to borrowing
- Great customer service
- A credit union experience
At LendEDU, we give LendKey our stamp of approval. To get started you can start the application at LendKey!
- Must have completed an eligible undergraduate or graduate degree program
- Undergraduate and graduate student loans are eligible
- Consolidate student loans together (both federal and private)
- Variable rates as low as 2.22% (with autopay)
- Fixed rates as low as 3.25% (with autopay)
- Interest only repayment option
- 5, 10, 15, and 20 year repayment terms
- No origination fees or prepayment penalties
- Medium credit score, salary, and debt-to-income requirements
- Not-for-profit lenders
- Excellent customer service
- Cosigner release available, if, the primary borrower is eligible even without a cosigner.
5) Earnest Review
Earnest is one of the most unique student loan refinance and consolidation out of all of the lenders. Since the company's founding in 2013, it was expanded to over 160 employees and has grown into one of the top refinancing lenders. Located in San Francisco, Earnest offers both new personal loans and student loan refinancing. Unlike most of the other companies mentioned on this page, Earnest utilizes extensive data to determine eligibility and plans for applicants who wish to refinance student loans. This data helps them decide how likely individuals are to pay back their loans, and what the best options for all parties involved is. If you have student loans, definitely give Earnest a look.
Borrowers can both refinance and consolidate their educational debt through Earnest. Like SoFi and Citizens Bank, both federal and private student loans are eligible. If you choose Earnest and are approved after applying, the company will send a payment to your old loan provider to pay off your old loans. You will then be issued a new loan with a new interest rate or repayment term.
Earnest, along with SoFi, can say that it offers the lowest interest rates in the market. Variable rates, which vary as the LIBOR changes, start at 2.55%. Fixed rates, on the other hand, stay the same throughout the life of the loan, and may be as low as 3.75%. All of these rates include a 0.25% discount for enrolling in auto-pay. These are extremely low rates and give the potential for loads of savings. In fact, the average Earnest customer saves $17,936 through refinancing. One of
Earnest may have more benefits than any of the lenders. It has all of the typical benefits such as an auto-pay discount, no fees, and great customer service.
Besides those, Earnest offers an extremely unique application process. The company has its and your best interests in mind when considering whether you are eligible. The company uses thousands of data points to qualify you, ensuring that you will be able to repay your loan.
One benefit of Earnest that very few other lenders can claim is that it does not outsource you to a loan servicer. Earnest keeps all of its customers and sticks with them through the entire repayment process. The company's Client Happiness team is available around the clock to help you out with any problems that may arise.
Possibly the best benefit of choosing Earnest is that customers have the option to temporarily defer payments in the case of financial hardship, such as in the case of job loss. In addition, those who want to return to school can defer payments for up to 3 years. You can use these deferment and refinancing calculators to predict the costs of different repayment scenarios. Earnest also lets customers skip one payment a year after they have made on-time payments for 6 months, as long as they make up the missed payments with subsequent payments.
Earnest allows users to switch between a variable and fixed rate once every 6 months after 6 months of on-time payments. Lastly, borrowers can make bi-weekly payments so less interest accrues, saving them significant amounts of money.
Because Earnest considers many different factors to determine eligibility, there is more likely to be something on your application that causes you to be rejected. In addition, the application process is more extensive and takes a longer time due to the variety of data points that are analyzed.
Earnest's student loan refinance and consolidation program is perfect for people who want:
- To save money with a lower interest rate
- A flexible repayment plan
- A servicer who treats each customer as an individual
- Want their eligibility to be based off more than credit score
LendEDU gives Earnest our stamp of approval. Click below to see if you are eligible at Earnest!
- Refinance and consolidate both federal and private student loans
- Have completed school of are in the final semester of degree
- Have at least $5,000 in student loan debt
- Variable rates as low as 2.55% APR with auto-pay
- Fixed rates as low as 3.75% APR with auto-pay
- Data-driven eligibility requirements
- No application, origination, or prepayment fees
- Unique deferment options including job loss protection
- Options to switch between variable and fixed interest rates
- Bi-weekly payments
6) CommonBond Refinancing Review
CommonBond Full Review
So you just graduated from a great school and you're stuck with a mountain of student loan debt. Well join the club. In 2012, a few students from the University of Pennsylvania found themselves in this situation and sought out to help borrowers like themselves.
These MBA students were tired of high interest rates on their student loans and sought out to change the student loan industry. They founded CommonBond.
Today, CommonBond has raised over $100 million in funding with the goal of making student debt more affordable through student loan refinancing and consolidation and now serves over 700 graduate programs across the U.S. CommonBond makes it easy to figure out how to refinance student loans and how to consolidate student loans.
CommonBond allows borrowers to consolidate and refinance both federal and private student loans. The company offers borrowers an array of options to consider. CommonBond offers borrowers 5, 7, 10, 15, and 20 year terms with both variable, hybrid, and fixed interest rate options.
The range of interest rates for Common Bond start as low as 2.32% for their 5-year variable rate product and start at 3.37% for their fixed rate product. At LendEDU we only work with lenders who have the student’s best interest in mind.
Like most student loan lenders lenders, CommonBond does not charge an origination fee and there is no pre-payment penalty for paying off your debts early. At this time borrowers can apply to consolidate up to $500,000 in student loans.
CommonBond works with anyone with a minimum 4-year undergraduate degree from over 2,100 schools nationwide, as well as those with grad school debt. In addition, they work with parents who took out PLUS loans for their children's education.
CommonBond offers some of the lowest student loan refinance and consolidation interest rates on the market. Without origination fees and prepayment penalties, it is easy for borrowers to compare CommonBond alongside their current loans.
CommonBond offers four different length repayment plans. Having the option of 5, 10, 15, and 20 year plans allows borrowers to tailor monthly payments to their specific needs and better plan for the future. Whether you are looking to pay off your loans quickly, or you are trying to take your time, CommonBond has a product offering for you!
Out of all the student loan refinance lenders we work with, CommonBond has some of the best customer service. The company prides itself on helping it borrowers navigate the student loan refinance market and beyond. The company even has a program help borrowers who lose their job find a new one.
CommonBond is building an incredible reputation for itself. CommonBond cares about its borrowers unlike any other company we’ve seen. Give them a call. I bet you a human answers the phone on the first ring.
In general, CommonBond looks for applicants with very strong incomes and low debt. To be approved by CommonBond you must have good credit, a well paying job, and be able to keep your debt load low.
The CommonBond student loan refinance and consolidation program is a great option for people who want:
- To lower their monthly payment
- Lock in low interest rates
- Choose from a variety of term lengths
- Consolidate student loans together (both federal and private)
At LendEDU, we give CommonBond our stamp of approval. To get started you can start the application at CommonBond!
- Refinancing and consolidation for private and federal debt
- Must have a minimum Bachelor's degree from any of the over 2,100 schools that comprise the CommonBond school network
- 2.32% – 6.18% APR variable rate financing (with autopay)
- 3.37% – 7.74% APR fixed rate financing (with autopay)
- 5, 7, 10, 15, and 20 Year Repayment Terms
- 0.25% interest rate discount with auto-pay from a checking account
- Moderate credit score, salary, debt-to-income and other criteria
- Unemployment protection – loan payments are paused temporarily
- Access to CommonBond Community – Networking events and other perks
- Social good – each and every fully funded degree through CommonBond, the education of an abroad student in need is funded too!
Darien Rowayton Bank Review
Darien Rowayton Bank Full Review
With so many new student loan lenders who refinance student loans, it is tough to find the best lenders in the industry. That's on top of the issue of how hard it can be to figure out how to refinance student loans and how to consolidate student loans.
Navigating through the array of Google results can be difficult. It gets even harder when each lender has its own set of criteria, interest rates, and term lengths options available.
Each lender brings something unique for borrowers and you have to decide which is best for you. It is hard to decide when so many refinance and consolidate student loans.
It gets even harder when each lender has its own set of criteria, interest rates, and term lengths options available. Moreover, each lenders brings something unique for borrowers. Who is the best?
At LendEDU we work with only the top student loan refinance and student loan consolidation companies. One company trying to help student loan borrowers is Darien Rowayton Bank, also know as DRB! At the end of the day Darien Rowayton Bank has some of the lowest interest rates available. Most student loan borrowers can save by refinancing through Darien Rowayton Bank.
Based out of Darien, Connecticut, Darien Rowayton Bank is known for its incredibly low rates and tight interest rate ranges. The company offers its customers a number of term lengths with variable and fixed interest rate options. Today, the company allows borrowers to refinance and consolidate both federal and private student loans together into one new loan. This is great for borrowers who are stuck making payments on multiple loans each month. Darien Rowayton Bank charges NO origination fees which can help borrowers save money! As far as credit criteria goes, Darien Rowayton Bank requires borrowers to have an excellent credit profile and good income. DRB evaluates each applicant on an individual basis so it is worth applying even if you are afraid you won’t qualify. To improve your chances of approval we suggest you apply with a cosigner. DRB offers a term length of 5, 7, 10, 15, and 20 years. The company offers both variable and fixed interest rate options. There is no penalty for paying off your loan early. Borrowers are expected to make payments on a monthly basis. The company offers an interest rate discount of 25 basis points if you sign up for auto-pay.
DRB Consolidation BenefitsDarien Rowayton Bank offers borrowers eight great options to refinance and consolidation student loans. Out of all the student loans refinance and student loan consolidation lenders on the market, Darien Rowayton Bank offers borrowers the most options. We are sure that every borrower will be able to find an option that meets their financial objectives. Darien Rowayton Bank has zero origination fees! Origination fees are charged to borrowers for taking out a loan. Usually, origination fees are quoted as a percentage of the loan. These fees are added to the principal of the loan. But with DRB you can avoid these costs all together. By not having an origination fees, DRB makes it easy to compare the value of a consolidated loans against the current loans that the borrower already has. Darien Rowayton Bank has zero prepayment penalties! For those working to pay off their student loans quickly, zero prepayment penalties are important. That being said paying off your student loans early may not be a primary goal for some borrowers.
To ConsiderIn general, DRB looks for applicants with very strong incomes and low debt. To be approved by DRB you must have good credit, a well paying job, and be able to keep your debt load low. Having a cosigner can greatly improve you chances of being approved.
Bottom LineThe Darien Rowayton Bank student loan refinance and consolidation program is a great option for people who want:
- To lower their monthly payment
- Lock in low interest rates
- Choose from a variety of term lengths
- Consolidate federal and private student loans
- Refinancing and consolidation for graduate and undergraduate, private and federal college debt
- Must have achieved a Bachelors or Graduate degree.
- PLUS loans have become an extremely popular options for parents with college students. DRB allows parents of degree holders to get lower interest rates on PLUS loans after the child is working and has received their degree. The parent can choose to apply in their name, or their child's name.
- 5, 7, 10, 15, 20 year repayment terms
- Moderate credit score, salary, and debt-to-income requirements
- No origination fees
- No prepayment penalties
- 0.25% Interest Rate Reduction with automatic payments via ACH. Please note, the automatic payments are a free service for borrowers.
Education Success Loans Review
Finding the best college debt consolidation company can be tough. Each lender has its own set of criteria, interest rates, and term lengths.
Moreover, each lender brings something unique for borrowers. Cosigner requirements, credit score minimums, and customer service can vary at each lender. At LendEDU we work with only the top student debt financing and student loan consolidation companies.
One company trying working to help student loan borrowers is Education Success Loans! Education Success Loans was started for the sole purpose of lending to student loan borrowers.
Read below to learn more about how Education Success Loans can help you figure out how to refinance student loans and how to consolidate student loans.
The BasicsThe lowest interest rate that Education Success Loans currently offers is 4.99% at a mixed rate. What is a mixed rate? A mixed interest rate starts at fixed, then adjusts to variable later on. Mixed rates are great for borrowers who want to lock in low interest rates today and believe that interest rates will stay low in the future. The highest interest rate offered is 7.99%. Today, Education Success Loans allows borrowers to refinance and consolidate both federal and private student loans. If you are a borrower stuck paying high interest rates on old federal and private student loans, Education Success Loans is a great option. Education Success Loans charges NO origination fees which can help borrowers save money from the beginning. As far as credit criteria goes, Education Success Loans requires borrowers to have a good credit score and an average debt-to-income. Education Success Loans has good approval ratings, so definitely apply even if you may think you are not qualified. Many borrowers have told us that Education Success Loans approved them even with only alright credit. Education Success Loans works with each borrower on a case by case basis to determine eligibility and approval. Education Success Loans offers a term length of 25 years. There is no penalty for paying off your loan early, and borrowers can pay as much as they would like each month on top of their minimum monthly payment. Borrowers are expected to make payments on a monthly basis. The company offers an interest rate discount of 25 basis points if you sign up for auto-pay. Auto-pay is easy to setup and convenient for borrowers. No longer will you need to worry about sending in checks to pay for your student loans.
Education Success Loans BenefitsEducation Success Loans offers borrowers three great options to refinance and consolidate student loans. Out of all the student loan refinance and student loan consolidation lenders on the market, Education Success Loans is the only lender to offer 25 year term lengths. If you are looking to lower your monthly payment, you can bet that a 25 year term will do the trick. By spreading your student loan repayment out of 25 years you will be required to pay much less each month. Education Success Loans has zero origination fees! Origination fees are fees charged to borrowers for taking out a loan. Usually, origination fees are quoted as a percentage of the loan. These fees are added to the principal of the loan. But with Education Success Loans you can avoid these costs all together. By not having an origination fees, Education Success Loans makes it easy to compare the value of a consolidated loan against the current loans that the borrower already has. Education Success Loans has zero prepayment penalties! For people working to pay off their student loans quickly, zero prepayment penalties are important. Some lenders charge borrowers when they pay off their loans early. So if you come into that year end bonus, you don’t need to fear paying off your loans early. You may be fearful to extend your student loans out to 25 years, but with zero prepayment penalties you can easily pay off your student loans early if you so choose.
To ConsiderThe biggest disadvantage of Education Success is that they are a smaller lender in the industry. As a result, the company has only one 25 year term length available for borrowers. That being said, you can choose to pay back your funds without a prepayment penalty if you would like. The other disadvantage is that Education Success only offers mixed interest rates. This could be an issue for some borrowers looking to lock in low interest rates today. If you are worried that interest rates will rise in the short term, you should select an option with a longer fixed interest rate period.
Bottom LineThe Education Success college debt refinancing and consolidation program is a great option for people who want:
- To lower their monthly payment
- Zero prepayment penalties
- A longer 25 year term length
- Consolidate federal and private college debt
- Want a personalize customer service experience
- Private student loan consolidation for Private and Federal Scholar Debt
- 25 Year Repayment Term
- 1 Year Fixed 4.99% then variable rate for the term of the loan
- 5 Year Fixed 5.99% then variable rate for the term of the loan
- 10 Year Fixed 7.99% then variable rate for the term of the loan
- Auto-Pay: 0.25% Interest Rate Reduction with automatic payments via ACH
- No Origination Fees
- No Prepayment Penalties
- Must have graduated at least 30 months prior to application date
- Have a minimum of $5,000 ($15,001 if in Kentucky) in private student loans to consolidate
- Supply acceptable proof of income of at least $24,000 annually
- Be a US Citizen or Permanent Resident and continue to be a Permanent resident of DC or any state in the continental United States other than AZ, IA, IL or WI
iHelp Loans Review
iHelp Student Loans is a smaller student loan organization working to help graduates best manage their student loans. iHelp recently launched a student loan consolidation service in partnership with its lender partners. iHelp is a middleman of sorts. In short, iHelp matches student debt borrowers with smaller and community banks. Community banks, like credit unions, usually focus in on one particular geographical area. Community banks are eager to help customers manage their student loans. With iHelp’s undergraduate Loan Consolidation program more community banks can get into the undergraduate loan market.
At LendEDU we like to work with as many lenders as possible. Why? Well the more lenders we have on our graduate debt financing platform the better. Community banks are known to offer some great interest rates and even better customer service. Keep reading below to figure out how to consolidate student loans and how to refinance student loans with iHelp.
iHelp offers competitive student debt refinancing and consolidation rates and terms to prospective borrowers. The company has two different rates depending on if you apply with or without a cosigner. If you apply with a cosigner, undergraduate loan consolidation and post-graduate rates start at 6.00%, or 6.22% APR. If you apply without a cosigner, your starting rate could be as low as 7.00%, or 7.21% APR. All of iHelp’s student loan consolidation rates are fixed rates. Meaning, all of the interest rates will not change over the life of the loan. Your monthly payment and total loan cost will not change with iHelp’s student loan consolidation program.
iHelp does charge its borrowers a supplemental fee at the time of the loan disbursement. iHelp charges 2% on top of the loan balance as a fee for processing the new student loan consolidation. Most lenders these days do not charge disbursement fees. iHelp is unique in this area.
iHelp only allows borrowers from only certain schools to apply for its program to consolidate student debt. The approved school list is fairly large. Know that the participating schools are in the following states: California, Connecticut, Delaware, Illinois, Maryland, Michigan, Minnesota, Missouri, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Virginia, West Virginia, and Wisconsin.
The reason that iHelp only allows certain schools is that the community bank partners tend to only focus on certain geographical regions.
In order to qualify you must be creditworthy. According to iHelp’s website, creditworthy means:
Has not had open collections or charge offs in the past 2 years.
Does not have bankruptcies, foreclosures or repossessions during the past 5 years.
Has not defaulted on a federal or private undergraduate loans.
Meets the minimum credit score.
Has at least 2 years of credit history.
The borrower or cosigner must have an annual income of $24,000 or greater for the past 2 years to qualify for the iHELP Consolidation Fixed Rate Program.
Does not exceed the debt to income threshold of 45%.
You should know that additional credit criteria may apply.
iHelp's student loan consolidation loan is administered by the Student Loan Finance Corporation (SLFC) and sponsored by the Independent Community Bankers of America (ICBA). Loans are funded by an iHELP originating lender.
iHelp offers a number of benefits to its student loan consolidation customers.
Our favorite benefit offered by iHelp is its cosigner release benefit. Having a creditworthy cosigner can really help you get approved for the iHelp Student Loan Consolidation program. After 24 month, you have the ability to release your cosigner from the consolidation loan. You must have made all 24 monthly payments on time. You must also meet iHelp’s credit requirements in order to qualify for cosigner release. Even so, cosigner release is an awesome benefit to offer!
If you refinance with iHelp, you will have the choice of three different repayment options. Of course you can just choose the standard repayment, but there are a couple unique options to consider. iHelp offers interest only payments. Meaning, the borrowers has the option to pay only interest for 24 months. This is a great option for borrowers looking to temporarily lower their monthly payment. iHelp also offers graduated repayment. This option allows borrowers to make interest only payments for a set period of time and then gradually overtime the payment amount increases until the borrower is making the full principal and interest payments.
iHelp even offers forbearance options to borrowers. If you fall into a financial rut, iHelp has your back and can help you delay your monthly payments with forbearance.
The Not So Good Stuff
If you are a very qualified candidate for student debt consolidation, iHelp is probably not your best option. iHelp’s student loan consolidation interest rates tend to be a little high. If you are a very qualified candidate, you can probably get lower interest rates at another one of the student loan refinance lenders.
Moreover, the supplemental fee charge by iHelp is expensive. The supplement fee is currently set at 2% of the loan balance. You need to factor in the costs of the supplement fee when considering iHelp’s interest rates. The APR rate will include the supplemental fee.
The Bottom Line
The iHelp Student Loan Consolidation program is a good option for some borrowers who:
Want to consolidate college debt
Are interested in cosigner release
Want interest only payment plans
Want a community bank lender
- Student loan consolidation rates start at 6.00%, or 6.22% APR
- 15 year term length
- Only fixed rate options
- Cosigner release is available after 24 months
- Interest only payments are available for 24 months
- Graduated payments available
- Community bank lenders
- School must be on accepted school list
Federal Direct Student Loan Consolidation
Are you trying to figure out how to consolidate student loans with the government, not with a private lender? Then you have come to the right place. Keep reading below to learn more about federal student loan consolidation.
You can consolidate student loans without a new private student loan lender. In fact, the Department of Education allows you to consolidate federal student loans through the Direct Consolidation Loan program. The Direct Student Loan Consolidation program is allows you to consolidate federal student loans into one new federal student loan - it does not allow you to refinance student loans.
You will not need to pay any fees to consolidate federal student loans through this program. In fact, you can consolidate your federal student loans for free online. Do not pay to consolidate student loans!
When you take out a Direct Consolidation Loan, you replace multiple federal student loans with one, requiring only one payment per month. To qualify for student loan consolidation, you must have one or more federal loans (Direct or FFEL) that are in repayment or in a grace period. These are the types of federal student loans that can be consolidated:
- Direct PLUS Loans
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Federal Nursing Loans
- Federal Perkins Loans
- Health Education Assistance Loans
- PLUS loans from the Federal Family Education Loan (FFEL) Program
- Subsidized Federal Stafford Loans
- Supplemental Loans for Students (SLS)
- Unsubsidized Federal Stafford Loans
In addition, some existing consolidation loans can be reconsolidated if you include an additional Direct or FFEL loan, although you may be able to reconsolidate an FFEL loan without including other loans.
Not only does student debt consolidation simplify your monthly repayment schedule, it can reduce your monthly payments by extending your loan repayment period to 30 years. You also might gain access to alternative repayment plans and/or replace variable-rate loans with a fixed-rate loan. These repayment plans include options to pay less now and more later, to base payments on earnings, or to cap payments as a percentage of discretionary or annual income:
1. Standard: You have up to 30 years to repay a standard consolidation loan. All federal borrowers are eligible for this type of loan.
2. Graduated: Payments start off low and increase over time, usually in steps every two years.
3. Pay As You Earn: The limit on monthly payments is 10 percent of discretionary income. Your loan payments are recalculated annually based on your family size and income. Family income is included if you file a joint return. You receive forgiveness on any loan balance remaining after 20 years (beware that forgiven debt may be taxable). This plan is available to loans made after September 30, 2007, and you must have a high debt-to-income ratio.
4. Revised Pay As Your Earn: Family income and loan debt are considered, independent of how you file your tax returns. Also, loan forgiveness starts after 20 or 25 years.
5. Income-Based: Payments will be 10 or 15 percent of discretionary income. Otherwise, this loan resembles revised pay as you earn.
6. Income-Contingent: Available for student and parent loans. You pay the lesser of:
a. What you would pay on a 12-year, income-based plan
b. 20 percent of your discretionary income
7. Income-Sensitive: Annual income determines your monthly payments. These loans can have terms of up to 15 years.
The flip side of extending a loan is that you’ll make more payments and pay more interest. In addition, you have to be wary of possibly losing benefits that came with the original loans, including partial cancellation, principal rebates and interest rate discounts. If you are concerned about losing these benefits you should explore options for receiving loan forbearance or deferment.
How to Consolidate Student Loans through the Government
You can apply for a Direct Consolidation Loan after you leave school, drop below half-time enrollment, or graduate. However, you cannot consolidate student debt on a defaulted loan unless you first make arrangements with the current loan servicer, or you agree to repay the consolidated loan under one of the income-driven plans. There are no application or prepayment fees for a consolidation loan.
The Federal Student Loan website allows you to apply for a Direct Consolidation Loan electronically or with paper forms. You can apply online by first choosing the existing loans, then picking one of the many repayment plans. You then sign the application after you review all the terms and conditions. The servicer will arrange to pay off your existing loans and set up your consolidated loan repayments.
Normally, repayment of a Direct Consolidation Loan commences within 60 days of disbursement. If your existing loan is still in its grace period, you may be able to delay repayment until your grace-period end date. Your repayment period will be 10 to 30 years, depending on several factors.
Pros and Cons
1. Simplifies and centralizes your student loan repayment schedule
2. Offers the opportunity to reduce your monthly payments
3. Offers the opportunity to adopt an income-driven repayment plan
4. Converts variable-rate loans to a fixed-rate loan
1. May increase the number of payments and interest paid
2. Does not include private and parent student loans
3. May lose certain existing benefits
4. Interest rate is not lowered
5. Does not save money like refinancing and consolidating through a private lender
Avoiding Consolidation Loan Scams
Consolidating multiple federal student loans is a good idea after you graduate. However, you must be vigilant when it comes to consolidation scams. The most popular scam involves companies charging you a fee, sometimes as high as $1,000, to consolidate your loans. Remember, loan consolidation is free, and you can accomplish it at the Federal Student Aid website.
Another scam is one in which a company offers you “immediate debt relief,” implying a cut in your principal balance or interest rate. Instead, the company charges a hefty fee and, at best, puts in the paperwork to consolidate your loan. At worst, they take your money and do nothing. As an example, the Consumer Financial Protection Bureau shut down College Education Services in 2014 because it was running illegal debt relief services.
Look for these red flags before considering the use of a private company for student loan consolidation:
- Pressure tactics: It is illegal to demand upfront fees for loan consolidation assistance. Beware if they ask you to sign some sort of contract or to reveal your credit card/bank account number.
- Immediate relief: No company can truthfully promise to immediately reduce or cancel your debt. If a company tells you it can work out a special deal with the DOE, consider reporting it to the authorities. Debt relief is only possible via the approved federal student loan programs.
- Third party authorization: Any company asking you to sign a third-party-authorization or power-of-attorney document is probably crooked. There is no reason to grant these companies any of your rights, nor should you make your loan repayments through them.
- Stealing your PIN: Your Federal Student Aid PIN uniquely and secretly identifies you to the DOE for matters relating to federal student loans. If a company asks for your PIN, it’s equivalent to stealing your signature. Honest companies will never ask for your PIN.
If you wish to submit a complaint about a company offering student debt relief services, call the CFPB at (855) 411-2372 or file a complaint online.
If you have questions about federal student loan consolidation, you can contact the Loan Consolidation Information Center at 1-800-557-7392. LendEDU does not represent the Department of Education in any way. Please consult a financial adviser before consolidating federal student loans.
Differences Between Federal Consolidation and Private Consolidation
Differences Between Federal Consolidation and Private Consolidation
If you have student loans, you may be have heard about consolidation or refinancing as a method to combine many loans into one loan, potentially reducing your interest rate or monthly payment. These terms are often used interchangeably, but have different goals and are utilized for different reasons.
Consolidation is generally used to combine many loans into one. It can be used for federal student loans through federal loan consolidation, or private and/or federal student loans through private loan refinancing and consolidation. When you refinance multiple student loans, including both private and/or federal student loans, you are effectively consolidating the loans because you will be combining all of your loans into one new loan.
Refinancing and consolidating with a private lender results in an entirely new interest rate, which is often lower than the original rate or rates. This is typically the goal of refinancing: to obtain a lower interest rate based on your credit score, income, history of on-time payments, and other factors. With a federal loan consolidation, the rate for your new loan that you receive is based on a weighted average of your old loans’ rates, rather than an entirely new interest rate. With consolidation, you can typically extend your repayment schedule to up to thirty years. Refinancing payment terms are generally anywhere from five to twenty-five years.
There are advantages and disadvantages to both refinancing and consolidation. With refinancing, you can often save money by obtaining a lower fixed interest rate for your student loans. You can also often lower your monthly payment and shorten your loan term, enabling you to pay off your debt sooner and allowing you to save money on the total amount of interest that you pay. However, if you refinance both federal and private student loans together — which is essentially a form of private student loan consolidation — you lose the protections of federal student loans, which may be useful for some borrowers. This includes income-based repayment plans, student loan forgiveness options, and other benefits that are only available to borrowers with federal student loans.
Federal loan consolidation offers borrowers a way of simplifying their finances by giving them just one bill to pay each month for their federal student loans. If you have an older (pre-2006) variable rate federal student loan, consolidation can save you money by allowing you to take advantage of fixed interest rate terms. Loan consolidation may also lower your monthly payments through extending the loan repayment term, but be aware that a longer loan term results in spending more over the life of the loan due to more interest payments. Federal loan consolidation also does not save you money; it is typically done more for convenience than to lower payments or interest rates. There is currently no way to reduce the interest rates on federal student loans.
Parents of dependent undergraduate students can receive a federal Direct PLUS Loan if parent and child both meet the general eligibility requirements. The obligation to repay the loan rests solely with the parent, and the DOE doesn’t permit the direct transfer of the loan from parent to child. However, there is a work-around: The child can apply to a participating private bank or loan company to refinance the loan in the child’s name.
Several student loan refinancing companies, including SoFi, Darien Rowayton Bank and CommonBond Bank, offer this option to children whose parents took out a Direct PLUS Loan. Generally, the child must have graduated with at least a Bachelor’s degree and be professionally employed.
Each refinance company evaluates the child’s loan application using its own criteria, but generally, the lenders want to be sure that the child can repay the loan. Typically, this requires the child to provide information about financial history, career experience, the school attended, the kind of degree received, and current income and expenses.
Deciding whether to consolidate or refinance your student loans depends on your specific situation. If you currently have high interest rates or a variable rate loan, you may want to consider refinancing your student loans. However, if you depend on income-based repayment plans or intend to apply for student loan forgiveness through the federal government, then refinancing may not be a smart choice for you. If you are considering refinancing or consolidating your student loans, carefully review the terms of your loans. Take advantage of online refinance calculators to determine whether you would save money with a lower interest rate, and be sure to comparison shop for the best rates.
Student Loan Refinancing & Consolidation Application Process
If you have decided to refinance your student loans, congratulations on taking control of your financial future! For many borrowers, refinancing is a tool that can save substantial money, both in monthly payments and over the life of a loan.
When you apply for a student loan refinancing, it is like applying for a loan. The bank or other lender will look at your credit score, income, the amount of savings you have, your educational background, and the number of on-time payments that you have made so far with your student loans. Generally, your credit score must be no lower than the mid-600’s (660 or higher) to qualify, or you may need a co-signer. Each lender will have different specific requirements, such whether or not you can still be in school when you apply, the maximum and minimum student loan balance that you can have in order to refinance, and the number of on-time payments you must make before you can apply to refinance your loan.
To start the process, you should begin by obtaining information about your student loans. If you do not have a copy of your student loan documents, you can get them in one of two ways. For federal student loans, you can view them directly online at the Federal Student Aid portal or the National Student Loan Data System. You will need to log in using the PIN number that you used to apply for student aid. Private student loans can be found via your credit report. You are entitled to a free annual copy of your credit report, which can be obtained from one of the major credit reporting agencies. Once you have determined which loan companies hold your loans, you can get a copy of your loan documents directly from those companies.
Once you have all of the information about your student loans, carefully consider your refinancing options. LendEDU allows borrowers to compare a number of lenders, providing information such as rates, whether the rates are variable or fixed, terms, loan types, and ranking. This level of transparency empowers borrowers to make the best possible decision when it comes to refinancing their student loans. Rates for these loans range from as low as 2.21 percent to 12 percent.
If you decide to apply for a loan through a bank or other lender, the lender will review your application and if you are approved, will decide your interest rate based on the factors discussed above. Your new loan servicing company will then pay off all of your old student loans, and you will receive statements from the new lender each month. Instead of receiving multiple statements and paying multiple bills, you will have one student loan payment each month.
With LendEDU’s simple online comparison tool, refinancing federal and private student loans is a simple, straightforward process that can help save you money on your student loans.
How Cosigners Affect Refinancing & Consolidating Student Loans
When it comes to student loans, many borrowers are turning to private student loans to close the gap between savings, student aid, scholarships, grants, and federal student loans. In many cases, lenders require borrowers under the age of 25 to have a cosigner in order to be approved for a student loan. The cosigner requirement enables many students to borrow money for college or graduate school who otherwise would not qualify for student loans on their own, but it can be a significant burden for family members or friends who serve as cosigners on their loans. Like new private student loans, borrowers looking to refinance their student loans can benefit by adding a cosigner.
A cosigner is a person who assumes equal responsibility for a student loan. If the primary borrower either does not repay the loan or goes into default on the loan, the co-signer becomes responsible for the loan. In some cases, the entire amount of the student loan may be due immediately if the primary borrower goes into default. Otherwise, the cosigner may be required to take over the monthly payments on behalf of the borrower.
The rationale behind cosigners is that in most situations, the primary borrower is young, and probably will not have much credit history. Private student loan lenders and refinance lenders cannot evaluate their credit risk because the borrowers may not have a track record of paying bills on time, or borrowing money and repaying it. There is no way for lenders to know if these applicants for student loans are a good credit risk. For this reason, they are reluctant to lend large sums of money or refinance large sums of money without a guarantee that someone will be responsible in the event that the primary borrower will be unable to pay the debt.
A cosigner with a credit history and a higher credit score can help a borrower be approved for student loan refinancing and consolidation, and can also assist in obtaining a lower interest rate. This is because the lender knows that if the primary borrower is unwilling or unable to pay back the student loan, the cosigner will be required to assume the payments. The interest rate for a refinanced loan may drop by over two percent simply by having a cosigner. The lender knows that a cosigner with a strong credit history is a good credit risk and will be more likely to pay back the loan than the primary borrower without any credit history.
Of course, there are some drawbacks to being a cosigner for a refinanced student loan. If something happens to the primary borrower — including death, disability, unemployment, or simple financial irresponsibility — then the cosigner will be required to pay back the loan. As a co-signer you will be required to pay back to loan if the primary borrower fails to do so, regardless of the reason for his or her failure. Late payments or missed payments can also negatively impact your credit score. Carefully consider the wisdom of cosigning a refinanced loan before agreeing to sign a loan on behalf of a child, grandchild, other family member or friend.
There is a method by which cosigners can be let off the hook for the loan after certain conditions are met, however. Once a student has graduated from college or graduate school and has started making regular, on-time payments, the cosigner may be able to obtain a release when refinancing. Most lenders have a program that permits borrowers to reapply for the refinanced loan under their own names only, releasing the cosigners from responsibility for the loans. As long as the primary borrower can demonstrate that he or she is capable of repaying the loan without the cosigner, then the cosigner will be released from responsibility for the loan. Check with your lender to determine if there is a cosigner release program through refinancing, and what the terms of the program are.
How Refinancing Interest Rates Work
Refinancing your student loans can be a smart choice as a way to lower your interest rate or to change your interest rate from a variable rate to a fixed interest rate. But in order to understand whether or not refinancing is a good option, you first need to understand the basics of how refinancing interest rates work.
Interest rates are the amount that a lender charges a borrower for the use of money, typically expressed as a percentage of the total amount borrowed. For example, if you borrowed $10,000, and the interest rate was 10 percent, then you would pay $1,000 to the lender for the use of that money. Typically, interest rates are charged on a yearly basis, which is known as an annual percentage rate, or APR. Over the life of a loan, interest rates can represent a substantial amount of money. In the $10,000 example above, in a 5 year loan, the total interest paid would be $2,748.23 — or nearly one-third of the total amount of money borrowed.
For refinanced student loans, interest rates can be either variable or fixed. A fixed rate loan means that the interest rate is set when you sign the loan documents, and will remain the same throughout the life of the loan. Federal student loan interest rates are set each year based on the financial market. Rates will vary based on the loan type, but will not depend on your credit score. All federal student loans issued after 2006 have fixed interest rates. In contrast, private student loans with fixed interest rates are based on the credit score of the primary borrower and/or the cosigner. When you refinance and consolidate your student loans with a private lender, you can typically choose a fixed or variable interest rate.
A variable interest rate loan will change based on the prime rate or the London Interbank Offered Rate (LIBOR). Variable interest rates often start out lower than fixed interest rate loans, but they can be risky because they can rise. If you are considering obtaining a variable rate loan, review the terms of the loan, including whether there is a cap on the interest rate. You should also pay off the loan as quickly as possible to reduce the risk of a sharp rise in the interest rate.
If you would like to qualify for a lower interest rate for your private student loans, there are a number of ways to do so. First, consider a shorter loan repayment term. The less time you take to repay your student loan, the lower your interest rate will typically be. Second, you can spend some time building your credit score. The higher your credit rating, the lower your interest rate will be — and the more money you will ultimately save on your loan. Building your credit can take time, but it can be as simple as making regular, on-time payments with your bills, never charging more than you can afford to pay back, or taking out a small loan and paying it off in a timely manner. Third, consider using a cosigner to lower your interest rate. A family member or close friend with an established credit history can sign the loan with you. You will retain primary responsibility for the loan, but their signature will help you get a lower rate. After a period of time, you may be able to apply for the loan under your name to release the cosigner from the loan.
Companies That Don't Offer Refinancing & Consolidation
Students and graduates have student loans from a vast array of banks and lenders across the United States. These lenders each have specific programs, loan terms and conditions, and may not offer the same opportunities when it comes to consolidating or refinancing private student loans. Here are five major lenders that do not offer refinancing — along with what you can do if you have loans from these companies and want to refinance your loans.
Sallie Mae Corporation is a consumer banking company that was originally set up in 1973 to provide federal educational loans. Once the government started directly lending all federal student loans, Sallie Mae shifted to the private student loan space. It ultimately put most of its loan servicing operation into a separate entity known as Navient Corporation, which is the largest servicer of federal student loans. Navient is collector on behalf of the Department of Education. Sallie Mae/Navient offers a variety of private student loans, including K-12 loans, undergraduate loans, career and technical school loans, graduate and professional school loans, and bar study and residency loans. Sallie Mae does not offer refinancing options for its borrowers, however.
PNC Financial Services Group, Inc., popularly known as PNC, is a financial institution based in Pittsburgh that offers a number of private student loan options for undergraduate and graduate students. In addition, PNC offers specialized loans for health and medical professionals, including loans for residency interviews and relocation expenses. Like Sallie Mae, PNC does not offer refinancing and consolidation for student loan borrowers.
Citibank is the consumer division of Citigroup. It previously offered student loans as part of its overall financial services, but no longer participates in the student loan business. However, it still services outstanding student loans. Citibank does not offer refinancing of its student loans, though you could refinance and consolidate old Citibank student loans through one of the lenders listed at the top of this page.
JPMorgan Chase, or Chase, is a banking and financial services group headquartered in New York City. Like Citibank, Chase no longer offers private student loans. Currently, American Education Services (AES) services Chase private student loans, while ACS Education Services (ACS) handles Chase federal student loans. Chase does not offer refinancing or consolidation of its student loans.
Great Lakes is a non-profit federal student loan servicer based in Wisconsin. It manages federal student loans on behalf of the U.S. Department of Education. This company does not offer loans itself, but services loans offered by the federal government. Because Great Lakes only handles federal student loans, and not private loans, refinancing is not an option with this loan servicer. However, consolidation may be possible through the Department of Education. In addition, you could discuss other repayment options with Great Lakes, such as income-based repayment, forbearance or loan forgiveness.
These banks are just five examples of companies that do not offer refinancing as an option for their borrowers. However, just because your loan servicing company does not offer refinancing does not mean that you are barred from refinancing your student loans.
Refinancing allows you the opportunity to choose your own lender from a variety of options. When you compare banks via LendEDU’s online comparison tool, you can review lenders’ interest rates, loan length, ranking and a number of other terms to determine which refinancing loan will best fit your needs. Applying for a refinanced loan is a relatively simple process. If you are approved for a student loan refinance loan, the proceeds of that loan will then be used to pay off your existing student loan (from Sallie Mae, PNC, Citibank, Chase, Great Lakes or any other lender). You will then make your student loan payments directly to your new lender, and should have a lower interest rate and/or lower monthly payments.
State of Student Loan Refinancing Report 2017
When we started LendEDU in 2014, student loan refinancing was a relatively new concept and foreign to most borrowers. When we launched our student loan refinancing marketplace in November of 2014 there were only a handful of companies even willing to refinance student debt. Over the last couple years, the refinancing industry has grown substantially with national marketing campaigns and with an influx of new companies.
We are proud to present our first ever State of Student Loan Refinancing Report. We realized that there wasn’t good public data for consumers on the private student loan refinancing process.
For example, it is common to read that it is hard to get approved for student loan refinancing. But how hard is it? How many people are declined? How many people are approved?
Moreover, it is common to read that you can save a lot of money by refinancing student debt. What interest rates are people receiving after refinancing? How much can you actually save? How long does the process actually take?
At LendEDU, we decided to answer many of these questions using our own data. At LendEDU, we work with all of the major student loan refinancing companies including SoFi, Citizens Bank, College Ave, Earnest, LendKey, and CommonBond. Over the last year we collected industry data on over 23,000 applicants.
We hope you enjoy the results of our research. And, we hope that our report helps educate consumers on the student loan refinancing process.
Here is the data:
1. What is the average FICO credit score of someone approved for refinancing?
We found that the average approved applicant has a 757 FICO credit score. At the low end, we observed an applicant be approved with a 560 FICO credit score.
2. What proportion of applicants are denied for student loan refinancing?
We found that 43% of applicants are denied during the application process.
3. What is the average interest rate received after refinancing student debt?
We found that the average refinanced loan has a 4.82% interest rate including ACH auto-pay discounts.
4. What proportion of approved applicants refinance after being approved?
We found that 33.36% of approved applicants go onto complete the refinancing process.
5. What is the average amount of student debt refinanced?
We found that the average amount refinanced is $53,892.
6. What is the average term length of a refinanced student loan?
We found that the average term length is 10.4 years after refinancing.
7. How long does the refinancing process take after being approved?
We found that it takes on average 28 days from the point when an applicant is approved to the point when the loan has been funded.
8. What proportion of refinanced student loans are cosigned?
We found that 32.24% of refinanced loans are originated with a cosigner.
9. What is the difference in interest rate between cosigned vs. non-cosigned loans?
We found that on average cosigned loans have 0.15% lower interest rates.10. What are the most popular states for student loan refinancing applicants?
We found that California, New York, New Jersey, Pennsylvania, Massachusetts, and Illinois are the most popular states for student loan refinancing.
We analyzed over 23,000 applicants from 2016. The applicant data was collected from SoFi, Citizens Bank, College Ave, Earnest, LendKey, and CommonBond.
We believe that the six aforementioned companies make up the vast majority of the student loan refinancing market. The application data was pooled from the six aforementioned companies and weighted based on the proportion of applicants. All of the applicants were sent to the six lending companies from the LendEDU.com website.
Each lender provides slightly different reporting and data. For each piece of data, at least five of the six companies provided the data. Therefore, some lenders did not provide certain data fields. Due to privacy concerns, we are unable to provide applicant weighting or confirm lender specific data.
Student Loan Refinancing & Consolidation FAQ
1. Can you refinance federal student loans?
Yes. You can refinance federal student loans, but only through a private lender. Be aware that you would be changing your federal student loan into a private loan, and would be losing the protections and benefits of federal student loans as a result.
2. Can you consolidate federal student loans?
Yes. You can consolidate federal student loans either directly through the Department of Education or through refinancing with a private lender. However, if you consolidate federal student loans through a private lender, you will lose the protections of the loans, such as loan forgiveness and income-driven repayment options.
3. Can you consolidate private student loans?
Yes. You can consolidate private student loans through refinancing with private lenders.
4. Who offers refinancing?
Refinancing is offered through private banks and lenders.
5. How does refinancing work?
In refinancing, once a loan has been approved, the new lender pays off the old student loans and issues a new loan with new terms. The borrower then is responsible for paying back the loan to the new lender.
6. How does refinancing save me money?
Refinancing typically saves borrowers money through obtaining a lower interest rate. A lower interest rate will result in the borrower paying less money in interest over the life of the loan.
7. How much does refinancing cost?
Refinancing is free. Apply for refinancing directly through the lender, after comparing rates and other information via LendEDU. You will never be charged any application or origination fees.
8. What are the eligibility requirements for refinancing?
Eligibility requirements for a student loan refinancing vary by lender, but typically require a credit score of at least the mid-600’s. The average credit score for an approved refinance application is 757. At LendEDU, we have seen people be approved with a credit score as low as 560. 43 percent of applicants for student loan refinancing are approved.
9. Can I refinance and consolidate my loans at the same time?
Yes. When you refinance your student loan, you are consolidating it simultaneously. You can choose which loans you would like to refinance, and therefore, consolidate together.
10. Can you refinance federal student loans with the government?
No. Federal student loans can only be refinanced through private lenders.
11. Can you refinance federal student loans with a private lender?
Yes. Federal student loans can only be refinanced through private lenders. Borrowers should be aware that by refinancing federal student loans, they will lose the benefits of federal loans, such as student loan forgiveness and income-driven repayment plans.
12. Can you refinance and consolidate federal and private student loans together?
Yes. With a private lender, you can combine private and federal student loans into a single loan. However, when you consolidate private and federal student loans, you lose the protections of federal student loans, such as loan forgiveness programs.
13. Can you refinance already refinanced loans?
Yes. You can refinance your student loans multiple times. Before doing so, carefully consider whether it makes financial sense to refinance the loan another time. You should only do this if you can receive a lower interest rate or want to consolidate another loan with your already refinanced loan.
14. Should I consolidate my student loans?
Deciding to consolidate student loans depends on a number of factors. For federal student loans, consolidation will not save you money, but it may make it easier for you to pay off your student loans because you will have just one payment to make each month. For private student loans, consolidation generally means refinancing, which requires an examination of the interest rates of each loan and whether you can obtain a more favorable interest rate through refinancing.
15. After refinancing, can I delay my payments if I return to school or face hardship?
The option of deferring or postponing payments depends on the individual lender. Citizens Bank, SoFi, iHelp and CommonBond all offer forbearance in the case of hardship. Other lenders, such as College Ave Student Loans and Purefy, offer forbearance on a case-by-case basis. Be sure to ask your lender about its policies for hardship forbearance or if you go back to school.
16. What should I do if I was rejected from refinancing?
If you were rejected from refinancing, it was likely due to a poor credit score. Take time to rebuild your credit history. Pay off debt, and focus on making regular, on-time payments for you bills. If possible, take out a small loan, and pay it off on time so that you can show that you are creditworthy. Alternatively, you can ask a family member or trusted friend to cosign your loan application in order to qualify.
17. Can I refinance if I never graduated?
Most lenders will not permit you to refinance your student loans if you did not graduate. However, some lenders may allow you to refinance; compare different options above to find a lender that may permit you to refinance.
18. Can I refinance if my school wasn’t accredited?
Generally, lenders will not approve your refinance if your school was not accredited. However, some lenders will. Check above for different options for lenders that may approve you for a refinancing loan.