Refinancing your student loan can make financial sense. This is especially true if your current loan is stuck at a high interest rate. With a new loan at a lower APR, you could save a bundle of money on interest every month and ultimately pay off your student debt faster. Consolidating multiple loans into one new one can also simplify your financial life and make bill compliance much easier.
College Ave and Earnest were high on our list. However, since student loan refinancing is an incredibly competitive area, you should also spend time comparing student loan companies to see who offers the best deal. Many lenders in this area offer incredibly low APRs, flexible payment options, borrower incentives, and much more. Hence, it is more important than ever to look around so that you can get the best student loan for your needs.
What You Should Know About Federal Student Loan Refinancing With A Private Lender
The lenders on this list can help you consolidate and refinance both federal student loans and personal student loans. However, there are some details to consider before refinancing federal loans with a private lender.
Switching federal loans to private means giving up federal protection such as deferment and forbearance. You are also giving up your chance to qualify for income-based repayment plans like Pay As You Earn (PAYE) or Income Based Repayment (IBR). With earnings-based repayment plans, you can pay off a percentage of your discretionary income for 20 to 25 years before you ultimately run out of your remaining loan balances. Therefore, you should not give up this benefit without careful thought and consideration.
Best Student Loan Refinance Firms Of 2020
At the beginning of your search for the best student loan for your lifestyle, take the time to compare lenders and everything they offer their customers. While there are a ton of reputable companies out there today that offer quality student loan refinancing products, there are also companies that you should probably avoid.
To make your search easier, we took the time to compare most of the top lenders in this space for what interest rates they offer, fees, borrower benefits, and more. The following student loan companies are the crème de la crème. So start your search here.
Our top tips:
- College Ave.
- Wells Fargo
- PenFed Credit Union
- Splash Financial
Student Loan Refinancing Company Reviews
1. College Ave.
College Ave offers student loan refinancing products that can be tailored to meet your needs. For example, they offer low fixed and variable interest rates and you never pay an application fee or an origination fee. You can even qualify for a discount if you set up your loan on Autopay and a wide range of repayment plans are available.
College Ave also has a wide range of online calculators and tools that can help you figure out how much student loan refinancing can help you save and whether it will end up being worth the move. Given the low floating rates that start at just 2.74% APR, if you have excellent credit or a co-signer with high credit, there is a good chance that refinancing can save you money.
Earnest is another online lender that primarily focuses on offering high quality student loans. This company allows you to consolidate debt at a lower interest rate than anywhere else, and gives you the option to choose a monthly payment and repayment period that suits your budget and lifestyle.
While you need excellent credit to qualify for the lowest interest rates, Earnest offers loans with variable APRs as low as 1.81% and low fixed rates as low as 3.45%. To qualify for student loan refinancing with Earnest, you must have a minimum credit value of 650 and a strong employment and income history. You must also be up to date on all of your bills and not file for bankruptcy on your credit profile.
Also, check out SoFi student loan refinancing company if you continue your search. This online lender offers some of the best student loan refinancing products available today, including loans with no application fee, origination fee, or hidden fees.
With SoFi you can apply for and complete the entire loan process online. They offer live customer support 7 days a week. You can also check your plan online without putting a hard query on your credit report. This will make it easier for you to see how much you can save before you commit.
Commonbond is another online student lender that allows you to check your tariff online without a harsh inquiry on your credit report. With Commonbond student loan refinancing, you could easily save thousands of dollars in interest with a new fixed rate of only 3.21%. The repayment terms are also offered for 5 to 20 years, so you can choose a new monthly payment and repayment period that suits your needs.
You can apply for your new loan online and note that there are no origination fees or prepayment fees for these loans. Your loan may also be eligible for forbearance, which means you can be without payments for up to 24 months during time of financial hardship.
LendKey offers private student loans and flexible student loan refinancing options to meet a wide variety of needs. You can repay your loan between 5 and 20 years and there is no origination fee for the refinancing loans.
You can use this company’s online interface to check your rate without asking for detailed information on your credit report. Variable APRs start at just 2.01% for graduates with excellent credit. LendKey loans are also getting 9.3 out of 10 stars in recent reviews, meaning that their customers are mostly satisfied with their decision to choose this company.
6. Wells Fargo
While Wells Fargo is popular for its banking products, mortgage products, and personal loans, this bank also offers refinancing products for student loans. These loans allow you to pool student debts into a new loan with a low floating or fixed rate, and even get a discount for setting up your loan with Autopay.
Wells Fargo loan terms are available between 5 and 20 years. So you can choose a repayment schedule and monthly payment that suits your needs. Wells Fargo also allows you to check your rate online without checking your credit report.
7. PenFed Credit Union
PenFed Credit Union offers unique student loan products from Purefy. You may be able to qualify for a lower interest rate which can translate into huge interest savings over time. PenFed allows you to choose a repayment period and monthly payment that suits your budget and lifestyle.
You can apply for student loan refinancing yourself, but PenFed Credit Union also allows co-signers. Low fixed rates start at just 3.48% APR, and you can check your interest rate online without a hard query on your credit report.
8. Splash Financial
Splash Financial may be a newer student loan refinancing company, but its offerings are competitive. This company allows you to check your interest rate online without checking your credit report. The variable interest rates currently start at just 2.25% of the annual interest rate.
Not only are the rates offered by Splash Financial industry leading, but the company has a 95% customer satisfaction rate to date. Thanks to their cutting edge technology, you can also apply for your loan and complete the loan process online, which means less hassle and stress for you as a borrower.
What to look out for when refinancing
If you do decide to refinance your student loan, you’ll be happy to know that the refinancing market is more robust than ever. A wide variety of lenders offer insanely attractive loan options to those who may qualify, although you should know that student loan companies are typically very picky about your credit score. Also, in some cases, you may not be able to refinance if you haven’t graduated from college or if you graduated from unapproved school.
While you should be clear about lender-specific eligibility requirements before applying to a student loan company, there are many other factors to look out for. Here is everything you should look for in a student loan refinance company before you decide to trust them with your loans.
Low interest rate
Of course, the main reason you are probably thinking about refinancing your loans is because of the potential for saving money on interest. Lenders who offer the lowest interest rates available today can potentially help you save more. However, it is important to keep in mind that if you do not have excellent credit, you may not qualify for the lowest interest rates available.
Also keep in mind that most lenders will offer better interest rates and loan terms if you have a co-signer with better credit than you. This is especially true if your credit is not high. So if you want to get the best rate, ask family members if they are ready to write your new student loan on. Remember that your co-signer is jointly responsible for the repayment. This means that if you default on your loan and hold the bag in your hand, your relationship can be quickly damaged.
Low fees or no fees
Student loans are like any other loan in the fact that some have higher fees or more fees than others. Since many student loans come with an application fee or an origination fee, you should look for lenders who do not charge these fees. Also, look for hidden fees like prepayment penalties.
You can qualify for discounts at some student loan companies. The most popular is a discount for using Autopay. If you are able and willing to set up automatic payments on your credit card, you could save 0.25% or 0.50% on your interest rate depending on the lender.
Rate check option
Many of the top student loan refinancing companies on this list allow you to check your interest rate online without a hard query on your credit report. This is a huge benefit because your interest rate can help you figure out whether a refinance is even worth it before you take the time to fill out a full loan application.
Flexible repayment plan
Also, make sure that any lender you choose has some flexibility in your repayment plan and monthly payment. You want to make sure the refinance is in line with your long-term financial goals and monthly budget. It is important to choose a new loan with a monthly payment that you can live with.
Most lenders in this area offer repayment periods of up to 20 years. This means that you can spread your payments over several decades to get a monthly payment that makes sense for your income. However, be aware that if you take a long time to repay, you will pay more interest over the life of your loan. Hence, you should consider prioritizing a faster payment plan.
The bottom line
Refinancing student loans may not sound like much fun. However, if you take the time to consider all of your loan options, you can easily save thousands of dollars. This is especially true when you have a lot of debt at a high interest rate. By consolidating all of your student loans into one new loan with a lower APR, you can simplify loan repayments with a single payment and save a ton of money that would otherwise be directly interest-bearing without helping you repay your loans.
However, the first step in the loan process is the most difficult and that is choosing a student loan refinancing company that you trust. The lenders on this list are highly rated, but they also offer some of the best loan products on the market today.
Start your search here and you will definitely get a student loan to live with. At the very least, you’ll have a better idea of what loans are available and how much you could save if you decide to refinance later.