Here’s an overview of how all the providers reviewed compare.
Company Name
|
Est. APR
|
Min. credit score
|
Loan Amount
|
Loan term
|
SoFi
|
Fixed: 3.49%-7.99% w/autopay
Variable: 1.74%-7.99% w/autopay
|
Not disclosed
|
$5,000 to full qualified student loan amount
|
5, 7, 10, 15, 20 (or any term under 20 subject to underwriting)
|
ELFI
|
Fixed: 2.73%-5.99%
Variable:1.86%-6.01%.
|
680
|
$10,000 to full qualified student loan amount
|
5-20 years for student loan refinancing
5, 7 or 10 years for parent loans
|
College Ave
|
Fixed: 3.49%-6.74%
Variable: 3.44% - 6.64%
|
Mid-600s
|
$5,000-$300,00
|
5-15 years
|
PenFed
|
Fixed rate only:
4.49-6.68%
|
700
|
$7,500-$300,000
|
5, 8, 12, or 15 years
|
Laurel Road
|
Fixed: 2.74%-6.05%
Variable: 1.64%-5.95%
(With 0.25% autopay discount included)
|
Not disclosed
|
$5,000 to full qualified student loan amount
$50,000 maximum for associate degrees
|
5, 7, 10, 15, and 20 years
|
Earnest
|
Fixed: 2.99%-7.99%
Variable: 1.74% to 7.99% (not available in all states)
(With 0.25% autopay discount included)
|
650
|
$5,000-$500,000
|
5-20 years (flexible)
|
Splash Financial
|
Fixed: 2.29-8.63%
Variable: 1.74-9.51%
|
640
|
$5,000 to no upper limit
|
5-25 years
|
Credible
|
Fixed from 2.40%
Variable from 1.86% (where offered)
|
700
|
Varies by lender
|
5-20 years
|
LendKey
|
Fixed: 2.49% to 7.75%
Variable: 1.90% to 5.25%
|
660
|
$5,000-$300,000
|
5-20 years
|
Should I Refinance My Student Loans?
If you want all your student debt—both federal and private
loans placed into one private loan, possibly at a lower interest rate with
lower monthly payments and longer to repay, then consider refinancing. Ask
yourself these four questions in the process.
- Do I meet the requirements for student loan refinancing?
Qualified borrowers have a stable, verifiable income, a fair
to good credit score, a low debt-to-income (DTI) ratio, and a strong payment
history with few to no negative items on their credit report.
- Can I save money by refinancing my student loans?
In most cases, especially if you have high interest rate
private loan debt, you can save money in interest over the life of your student
loans. Refinancing into a no-fee loan also might save you money.
- Will I Lose Benefits If I Refinance My Student Loans?
Refinancing federal student loans into private lender debt
means a potential loss of benefits like one-time student loan cancellation by
the Biden administration and CARES Act payment suspension and 0% interest. It
also means forfeiting the standard protections you get with federal student
loans, including in school deferment, forbearance up to three years,
income-driven repayment plans, Public Service Loan Forgiveness and Teacher Loan
Forgiveness.
- Do I have student loan debt I can’t refinance?
Many lenders will not refinance student loans taken out to
attend for-profit schools and programs. Also, despite the Consumer FinanceProtection Bureau designating these as credit products,or a form of student
debt, income share agreements (ISAs) can’t be refinanced.
When to Refinance Student Loans
You’re not waiting for one-time loan cancellation from the Biden administration, don’t qualify for other loan forgiveness programs, and
can forgo other federal student loan debt protections. If you have high
interest federal student loan and private loan debt, refinance now before
interest rates rise again. Also, parents who took out student debt for their
children should refinance or transfer to their children any high interest
Parent PLUS or private loans while interest rates are where they are.
Refinancing also benefits you if you want to repay your loans aggressively,
because you have more control over them with the right refinancing lender.
Conversely, because refinancing may get you lower monthly payments and more
time to pay off student loan debt, potentially freeing money up for other uses.
When Refinancing Your Student Loans Is a Bad Idea
There are situations when refinancing student loans is not a
good idea. When you don’t have a stable income, and may need loan forbearance,
don’t refinance your federal student loans. Remember, too, most private loans
don’t offer in-school or active-duty military deferral and when you refinance
student debt, your federal loans become private ones. You’re required to make
monthly payments on those like any other private personal debt. Don’t refinance
federal loans If there’s a chance you’re eligible for any loan forgiveness
(beyond Biden’s loan cancellation proposal). Finally, if you’re almost done
paying your loans or have a relatively low interest rate already, it’s a poor
idea to refinance your student loans.
How Do You Refinance Student Loans?
Here’s the process for refinancing your student loans. Since
every situation is different, you may need to adjust these elements to your
circumstances.
- Check your credit: You’ll want to make sure you have a
qualifying credit score, have a clean credit report, and do whatever is
necessary to improve your credit. That includes getting mistakes removed from
your credit report, paying down your current personal loans and credit cards,
and dealing with negative credit items.
- Shortlist lenders: Research student loan refinancing
companies carefully based on your personal circumstances and choose several
that will meet your specific needs. Look for those with the best student loan
refinance rates and loan terms. Determine if they charge any fee or prepayment
penalties, and if they offer perks for refinancing your student debt with them.
Create a short list of the best four or five for you.
- Check your rate: Choose lenders that allow you to check your
rate without a hard credit inquiry, but get prepared for them when you formally
apply for loans. Set aside the ones that meet the requirements you established
for refinancing with them.
- Choose your lender: Next, it’s time to apply formally to the
two or three lender finalists you’ve selected. When the one with the best
overall combination of features you need approves your loan, read their loan
documents carefully before you sign them. Get old servicers repaid and begin repaying
your refinanced loans.
Tips for Managing Your Student Loan Debt
Here are strategies for managing your student loan debt
whether or not you refinance your student loans.
- Know what you owe: Calculate how much you own and to whom
and be informed of your repayment terms.
- Calendar payments: Put the dates and amounts you owe on a
calendar to pay them on time. Know their grace periods in case you forget to
pay or can’t.
- Keep documents organized: Arrange paperwork in folders, either
paper or electronic, and be able to find and review them as necessary.
- Pay off higher interest loans first: Reduce the amount
you’ll pay over the life of your loans by aggressively paying off the highest
cost debt first. Make additional payments or larger ones to the highest rate
debt. Then pay off the next highest, then the next until your debt is paid.
- Focus on the principal: Pay extra principal on your loans
monthly. If you’re getting the most expensive debt paid first, target its
principal for repayment.
- Autopay student loans: Many lenders offer a discount for
making automatic payments. Take advantage of that by setting up autopay.
- Consider alternative payment plans: With federal student
loans, you can call your servicer and set up income-driven payment plans,
especially if you’re struggling. They include pay as you earn, graduated
payment, income contingent payment, and extended repayment.
- Request deferment or forbearance: If you’re still returning
to or in school, request an in-school deferment for your lender. Forbearance
may be necessary if you’re experiencing financial difficulty, and it’s a
protection for federal student loans. Request it and see if private lenders
will offer that help.
- Determine loan forgiveness eligibility: There are multiple programs
offered for federal student loan borrowers. Research those for which you may
qualify.
- Investigate refinancing: Often, you may have more
flexibility in repayment when you refinance your school debt. You also may get
lower interest rates, smaller payments and more time to repay debt. All can
help you financially.
Conclusion
Many Americans juggle hefty student loan debt alongside
other financial obligations, and it may prevent some from achieving personal
goals like home buying, marriage or family. Refinancing student debt to gain
better control over your finances can take significant time and effort. But it
also can be worthwhile and substantially improve your financial picture. You
must carefully consider each aspect of the process to not only get the best
interest rates and repayment terms, but to make sure the terms and conditions
of your agreement benefit you most. By applying the strategies here, you might
get the best student loan refinancing options.