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Attending law school can be a great way to ensure a profitable, successful career in the long-term. But for recent grads, it also means serious debt.
In fact, recent statistics show that the average three-year stay at a U.S. law school program (plus undergrad before that) costs upward of $145,000. Even with the high incomes many attorneys command, this debt can take years—even decades—to pay off.
Want to make paying your law school debt off easier? If you’ve passed the bar exam, refinancing your law school loans may be your best bet. Use this guide to learn more about how refinancing can simplify your repayment plan, lower your interest rates, and more.
In this guide:
- 3 best lenders for refinancing law school loans
- Refinancing could save lawyers thousands
- Who should refinance law school loans?
- When is refinancing a bad idea for lawyers?
- Alternatives if refinancing your law school loans isn’t right for you
3 best lenders for refinancing law school loans
Are you looking to refinance your law school loans? Here are our picks for the best lenders to refinance law school loans from our partners.
Here’s who made the cut:
2.39% – 6.67%
$5,000 – $500,000
5 – 20 years
Earnest is an online lender that offers student loan refinancing, private student loans, and even personal loans. With Earnest, you can consolidate both federal and private student loans, and you can also enable biweekly automatic payments to reduce your interest costs even more.
Here’s what you need to know about refinancing student loans with Earnest:
- Minimum credit score: 650
- Minimum income: $35,000
- Variable rates: 2.39% – 6.67%
- Fixed rates: 3.20% – 6.67%
- Rate reduction: 0.25% for autopay
- Fees: None
2.39% – 6.69%
$15,000 – Total outstanding loan balance
5, 7, 10, 15, or 20 years
ELFI, also known as Education Loan Finance, is a student loan consolidation and refinancing company. ELFI also offers undergrad and graduate loans for students still in school.
In addition to requiring a credit score of at least 680, ELFI also has an income requirement of $35,000.
On the plus side, refinancing with ELFI requires no application or origination fee, and there are referral bonuses if you get family or friends to refinance with ELFI, too.
Here’s what you need to know about refinancing student loans with ELFI:
- Minimum credit score: 680
- Minimum annual income: $35,000
- Variables rates: 2.39% – 6.01%
- Fixed rates: 3.21% – 6.69%
- Rate reduction: Not available
- Fees: Late fee of 5% or $50, whichever is less
3. Citizens Bank
2.72% – 8.63%
$10,000 – $500,000
Citizens Bank is a national bank that offers student loan refinancing in addition to a number of other products. If you prefer a large bank with brick-and-mortar locations, Citizens Bank is one of your best options.
Citizens Bank offers a number of discounts that can greatly cut your interest rate. If you sign up for autopay you get 0.25% off your rate, and if you have a bank account with Citizens you get 0.25% off.
There are also no origination, prepayment, or late payment fees when you use Citizens Bank.
- Minimum credit score: Not disclosed
- Minimum income: Not disclosed
- Variable rates: 2.72% – 8.38%
- Fixed rates: 3.49% – 8.63%
- Rate reduction: 0.25% automatic payment discount and 0.25% discount for having a bank account with Citizens Bank
- Fees: None
Refinancing could save lawyers thousands
Law school grads often come away with hundreds of thousands in education-related debt. Since refinancing often allows grads to obtain lower rates than they’re currently paying on that debt, it can mean serious savings over time.
Let’s take the average law school debt of $145,000 as an example. If you’re currently paying 6% interest on those loans, but you refinance and reduce your rate by just 0.50% (a rate of 5.50%), you’d save $36 a month and nearly $4,400 over the next 10 years.
And if your credit is strong and you have a stable income, you could reduce your rate by even more. Our student loan refinance calculator can show you how much you could save.
Keep in mind that interest rates and requirements vary from lender to lender, so if you’re considering refinancing your student loans, then get quotes from at least three different options to ensure you get the best rate.
Who should refinance law school loans?
Refinancing can offer many benefits. For one, it can allow you to consolidate several loans into one. This makes it easier to pay off (just one payment per month), and it allows you to pay the same interest rate across the board.
Refinancing can also lower your interest rate. Market rates fluctuate, so there’s a good chance rates have dropped since you took out your loans. If your credit or income has improved or you’ve reduced your debts, this may also qualify you for lower interest rates then you’re currently paying.
Lawyers are typically prime candidates for refinancing, as they have consistent, high incomes, promising career prospects, and high loan balances that equal serious interest payments over time.
Additionally, because lawyers typically work in the private sector and borrow from private lenders, they usually aren’t eligible for federal benefits like student loan forgiveness.
When is refinancing a bad idea for lawyers?
Refinancing is generally a good idea if you have several loans and a high level of student loan debt. It’s also a good idea if your income or credit have improved since you first applied for your loan.
It’s not a great idea if you work for a public agency and most of your loans are federal. In this case, you might be eligible for public service loan forgiveness. It’s also not the best idea if you work for a non-profit and make less than the average attorney.
If your credit is low, refinancing may not be a good choice, either, as you might not qualify for lower interest rates.
Alternatives if refinancing your law school loans isn’t right for you
If you’re not currently practicing law, you work at a non-profit, or you just earn a lower salary than other attorneys, refinancing your student loans isn’t your only option for getting that debt in check.
You could also consider:
- An income-driven repayment plan: Income-driven repayment plans are available on federal loans and can help you lower your monthly payments. There are several repayment options included within this program, so you can find a plan that works for you.
- Consolidating your loans: Student loan consolidation lets you roll your federal student loans into one loan without changing the interest rate.
- PSLF: If you work in the public sector, you may qualify for public service loan forgiveness. Before you can apply, you need to have made at least 120 loan payments.
- A loan repayment assistance program: LRAPs are designed for lawyers working in some sort of public interest field. They’re currently available in 24 states and at a number of law schools across the country.
There also may be various federal or state assistance options you’re eligible for, depending on where you live and work. Attorneys who work with the Department of Justice, for example, can apply for repayment assistance through the agency.
The bottom line
If you’re a law school grad dealing with high amounts of student loan debt, you’re not alone—and you have options. Be sure to explore all of them, from refinancing or consolidating your law school loans to applying for forgiveness programs or some other sort of assistance.
There’s a way to get your debt in check and start paying it down comfortably today.
Author: Aly Yale