Refinancing Student Loans With Top Lenders Explained

Student loan refinancing sounds complicated, well it should. Here's a list of factors you should consider while refinancing and a list of the top lenders to choose from.

Updated by Jason Joy Manoj on 20th September 2019

Loan repayment can be a real hassle, especially if you have multiple loans to handle. You may have to make regular payments for different loans at different times, making sure they reach your banks. And on top of it all, you have to make sure that you have enough cash in the bank to not default on a payment.

These hassles can be avoided by refinancing all your student loans together into a single loan with one interest rate, only requiring one monthly payment. You also get the chance to lower your current interest rates and change your loan terms when you refinance your student loans.

However, refinancing can be tricky. You have to be cautious about the terms and conditions of your new loan. You may not always end up with a better result. You may end up paying more on the interest rates in your refinanced loan or lose benefits of your former loans when you refinance them.

In this article, we will provide all information on the Best places for student loan refinancing for your federal and private student loans, and focus on the top refinancing companies in the market.


List of contents


Refinancing Basics

With student loan refinancing, a private lender repays all of your student loans, which may include both private and federal loans. The lender issues you a new loan based on your creditworthiness with the old loan amount as the principal.

You may be able to save money and lower your monthly payments by refinancing your student loans with an interest rate reduction. However, when you refinance Federal Loans, they will become private loans and you will no longer be able to avail the benefits that come with the federal programs, including income-driven repayment plans and its forgiveness programs.

Difference between refinancing and consolidation?

Federal Loans can be consolidated under the Federal Loan Consolidation Program or refinanced under a refinancing program with a private lender. While both the options involve combining multiple loans into one, consolidation is primarily used for federal loans and the federal loan benefits will still be offered to you while refinancing is used for combining both Federal and private loans with private lenders.

Consolidation is when you combine multiple federal loans into one and refinancing is when you get a new private loan to replace an existing loan or a number of loans. Refinancing pays off your existing student loans and gives you a new loan with a newer interest rate.

Although similar in many ways, they have many differences in nature. You will refinance the student loan based on a variety of variables, including your income, debts, employment, and credit. By contrast, Federal Loan Consolidation would not change interest rates, and eligibility does not depend on your creditworthiness.

You can choose to consolidate your Federal student loans and refinance your private loans. Another way of doing it is to consolidate some of your Federal loans and refinance others.


Best Student Loan Refinancing Companies

The following are the top 9 companies offering refinancing options for both Federal and Private student loans. The term for the same is from 5 - 20 years. The loan may have fixed and variable interest rates.

Rank Lender Variable rates Eligible degrees
1 Earnest 2.43% - 11.95% Undergraduate and Graduate
2 SoFi 2.44% - 9.95% Undergraduate and Graduate
3 CommonBond 2.69% - 7.43% Undergraduate and Graduate
4 LendKey 2.44% - 8.96% Undergraduate and Graduate
5 Laurel Road 2.43% - 10.0% Undergraduate and Graduate
6 Citizens One 2.80% -9.95% Undergraduate and Graduate
7 ELFi 2.80% - 6.01% Undergraduate and Graduate
8 iHELP LIBOR+2.5 to 7.5% Undergraduate and Graduate
9 Splash Financial 3.05% - 7.79% Graduate

Rates are calculated based on your credit profile, annual income and other factors that each company deems relevant for the refinancing programs they offer.

The caps for the variable rates are based on the term you choose for the refinancing program. Each cap mentioned in the above table is the highest cap for the longest term offered by the corresponding company.

Now we will discuss the overview of these companies. 

1 - Earnest

Earnest offers so much flexibility to its borrowers with their student loan refinancing. The company has a non-traditional approach to underwriting, which also takes your money management skills into account.

If you have a separate savings account or a good expense to income ratio, you may have a good chance of getting a low-interest rate.

Features

  • Although your credit history matters, Earnest takes into consideration merit-based factors when reviewing applicants. For example, your history of making retirement account savings and saving for an emergency fund will also benefit your application. Your job and career aspects are also taken into consideration.

  • Earnest gives borrowers multiple options when it comes to repaying their loans, such as choosing your monthly payment and the option to make multiple payments each month or the ability to skip a payment every 12 months without a penalty as long as you are in good standing with your payments.

  • Earnest has earned a Trustpilot excellence rating and an A+ Better Business Bureau rating.

Noteworthy

Applicants cannot apply with a co-signer, which could make it a bit difficult for some people who are trying to qualify for refinancing.

Best suited for those who -

  • Who are financially fit, even if they do not have a long credit history

  • Desire flexibility in their loan terms and repayment plans

Credit eligibility

  • A minimum credit score of 650 or above

  • Without bankruptcy on credit report or accounts in the collection recently

Employment requirements

You must be employed, have income from other sources or have a job offer to begin within 6 months.

Student eligibility

  • U.S citizens or permanent residents with a minimum validity of 10-years

  • Only for graduates or people who are graduating in six months

  • Eligible degrees from Title IV-accredited school graduates and undergraduates

  • Students with private and/or federal loans

  • State restrictions - Offered to 47 states plus the District of Columbia

Interest rates

Rate types - Fixed and variable.

Autopay discount of 0.25% off of interest rate.

Loan and refinancing terms

Loan Amount - Minimum of $5,000

Loan Period - Minimum of 5 years; Maximum - 20 years

Repayment and hardship options

There are no prepayment penalties.

Deferment can be availed on request.

Forbearance is available during the period of economic difficulties and hardships.

Fees

There are no origination, late payment or additional fee charges.

Additional features

It is possible to make bi-weekly payments which will result in paying comparatively less interest amount. If you’re in good credit standing, you can skip one payment every 12 months.

You can choose to customize your rate and term based on how much you can afford to pay each month, which can save you some money compared with traditional financing terms.

Parent PLUS Loans Refinancing

Refinancing option for parents on their Parent PLUS Loans is also available.

Eligibility

  • U.S. Citizens or holder of Permanent Resident Card of 18 years and above

  • Reside in the eligible states

  • A minimum loan amount of $5,000

  • A minimum credit score of 650

  • Employed with consistent income or having a job offer to start within the next 6 months

  • No bankruptcy report or accounts in collection.


Learn more about Earnest Student Loans 


2 - SoFi

SoFi is one of the largest student loan refinance companies and was one of the first organizations to allow borrowers to refinance their federal and private student loans.

Their refinancing program focuses more on graduates who have a high income and a good credit history. 

Features

SoFi offers student loan refinancing with no maximum loan amount.

When you refinance your student loans with SoFi, you also become a member of the organization. As a member, you are eligible for additional services which include a career coach, a free financial advisor, waived fees for wealth management products and also discounts on the other loans from SoFi. 

Members also get exclusive invitations to social events, such as cooking classes and happy hours, in major cities around the country.

If you lose your job and it was not your fault, SoFi will put your loans in forbearance for up to 12 months in 3 months increment and assist you in finding a new job.

Drawbacks

SoFi chooses to lend to creditworthy borrowers with a good credit score and consistent income only. They have very strict eligibility criteria and if you do not meet the criteria, you may not qualify to refinance with them.

If you have a co-signer to qualify for refinancing, your co-signer will be tied to your loan until it is completely paid off. Some other refinancers will release your cosigner after you establish a history of regular on-time payments for a considerable period.

Employment requirements

You must be employed, have an offer to start work in less than 90 days or have income from other sources

Student eligibility

  • SoFi only accepts graduate students

  • Degrees from Title IV-accredited school graduates and undergraduates

  • Students with Private and/or Federal Loans

  • Having a good credit score and income or addition of a cosigner who has such

  • No state restrictions - Available in all 50 states.

Interest rates

Fixed and variable rates are available.

Autopay discount rate is 0.25% off of your interest rate.

Loan and refinancing terms

Loan Amount -  Minimum amount of $5,000, no maximum amount is mentioned.

Loan Period - Minimum term of 5 years, maximum is 20 years.

Repayment and hardship options

Biweekly payments are available to help you pay off your loan faster.

Deferment - SoFi respects your existing grace periods and applies it to your new refinanced loans too. Deferment is available for up to six months for borrowers in school with at least half time school attendance, active-duty service members, those undergoing disability rehabilitation and those taking part in SoFi’s Entrepreneurship Program.

Forbearance - Yes, in three-month increments for up to 12 months total if you lose a job through no fault of your own.

Fees

There are no origination fees charged on the refinanced loans.

Additional features

SoFi’s Entrepreneurship Program can connect you with peers, mentors, and investors who can help turn your idea into reality.

Parent PLUS Loans Refinancing

Refinancing option for parents on their Parent PLUS Loans is also available. The fixed rates start at 3.490% APR and variable rates start at 2.430% APR.


Learn more about SoFi student loans


3 - CommonBond

CommonBond started out by lending student loans mostly to graduates, especially doctors with more than $100,000 in debt. Now, they have diversified their refinancing services into other streams including undergraduate student loans.

There are no fees for origination, application or disbursement when refinancing with CommonBond.

Best features

  • Refinancing of private and/or federal student loans are offered

  • Hybrid interest rate options - The rate remains fixed for the first 5 years and variable for the next 5 years

  • Social promise- funds the education of students of Ghana for every loan that closes

  • Common bridge - Unemployment program where they pause payments and help you find a job

  • No prepayment penalty

  • 24 months forbearance within the life of the loan

Drawbacks

It does not offer to refinance in the following states - Idaho, Louisiana, Mississippi, Nevada, South Dakota, and Vermont.

Employment requirements

  • No annual income requirements

  • Requires you to be employed or have an offer letter at the time of application

Student eligibility

Eligible degrees from a Title IV-accredited school.

Interest rates

2.46 - 7.08% APR variable rate refinancing (with autopay)

3.69 - 8.07% APR fixed rate refinancing (with autopay)

4.28 - 7.02% APR hybrid rate refinancing (with autopay)

These rates may be subjected to changes in the future.

Loan and refinancing terms

5, 7, 10, 15, 20 Year Repayment Terms

Repayment and hardship options

0.25% Interest rate reduction with automatic debits via ACH

Unemployment protection – Loan payments are paused and it helps eligible graduates find new jobs and also hire them for short-term consulting projects.

Fees - There are no application, origination or disbursement fees

Additional features

Access to CommonBond Community, for example, the borrowers are exclusively invited to events in their cities, networking opportunities, and lifestyle complimentary perks.

Social good – For every fully funded degree that goes through CommonBond, it will fund the education of students from Ghana who are in need through Pencils of Promise.


Learn more about CommonBond student loans 


4 - LendKey

LendKey is not a lender by itself but a platform with a network of hundreds of community-based banks, private lenders and credit unions that will fund your student loan refinancing. LendKey unifies and manages the application process, offers customer support to applicants and services their loans.

Best features

Instead of individually researching and comparing small banks and credit unions, LendKey allows you to see a list of potential good fits for you and their loan offerings. This makes it easier to quickly compare a variety of refinancing options.

Since your loan comes from small banks and credit unions, you may receive better terms or more lenient repayment options. For example, some of the lenders may let you make interest-only payments, which could decrease your monthly payments but adversely increase the cost of your loan.

It provides the option to have a cosigner in case a borrower does not have a good credit score. You might be able to release the co-signer after making 12 to 36 consecutive on-time payments.

Drawbacks

You will be required to join a credit union if you want it to refinance your loan through one of these lenders. Eligibility can vary depending on the credit union but may be limited to people who live in a certain region or work at particular companies.

The terms and conditions can vary depending on the lender. Read your refinancing terms carefully to understand your new loan before agreeing to go through with the refinance.

You need to have completed an undergraduate degree, a graduate degree, an associate degree, or a doctorate degree from any title IV eligible schools.

Best suited for those who 

Want to refinance their loans through multiple small lenders

Want to keep their money local but get good customer service from a bigger company

Might not qualify for refinancing from other lenders due to low income 

Are interested repayment plans from a private lender

Credit requirements

Minimum credit score varies - Typically 600+

Maximum DTI varies

Minimum credit history of 36 months

Employment requirements

Minimum employment eligibility is a minimum income of $24,000 annually

Student eligibility

  • Completed an eligible degree from an eligible school

  • Students with private and/or federal loans

  • No State restrictions but some of the lenders in the network may be regional

Interest rates

Rate types - Fixed and variable.

Autopay discount 0.25% off of your interest rate.

Loan and refinancing terms

Loan Amount -  Varies from lender to lender.

Loan Period - Minimum of 10 years, Maximum of 25 years.

Repayment and hardship options

Repayment options - In-school payments are available

Deferment and Forbearance options are available for borrowers with genuine financial hardship.

Fees

There is no origination fee.

Late payment - depends on the lender.

Additional fees - depends on the lender.


Read more on LendKey student loans


5 - Laurel Road

Laurel Road is a digital lending platform that was started under the Laurel Road Bank. It has become a part of the KeyBank since 2013. They also provide graduate school loans, mortgages and personal loans.

Best features

One of the key benefits that Laurel Road offers, which other lenders do not, is their unemployment protection. If a borrower loses his or her job or is a victim to any other form of economic hardship, Laurel Road will allow for partial or up to full forbearance of payments for up to a period of 12 months. 

Furthermore, Laurel Road will forgive the loans of borrowers who pass away or become permanently disabled.

They also allow you to refinance your federal and private loans up to 100% of their value with no origination fee or prepayment penalty.

Laurel Road Bank allows medical and dental students to pay only $100 per month throughout their residency or fellowship program and up to six months after training. It is important for borrowers to keep in mind that the interest that accumulates during this time will be added on to the principal of the loan if not paid off before going into standard repayment

The last benefit, that many lenders also provide, is a discount for auto-debits. Laurel Road will provide you with a discount of 0.25% off of your interest rate if you automatically make your payments every month through any type of checking account.

No maximum amount for refinancing is required and they provide their services in all the 50 states of America.

Drawbacks

  • They do not offer more than 12 months of forbearance.

  • They have no academic deferment for borrowers returning to school

  • They do not let you make amount greater than monthly payment when paid via autopay

  • While not specific to Laurel Road Bank, it is important to remember that you will give up certain protections when refinancing federal loans with any private lender

Eligibility

  • U.S. citizens or green cardholders

  • A minimum loan of $5,000

  • Borrowers with a bachelor’s degree or higher under eligible Type IV accredited school

  • Associate degrees are acceptable for selected professions

To determine if you are eligible for refinancing, and to determine your personal interest rate, Laurel Road will do a soft credit check.

If you do not possess a good credit or have a little credit history, you may still be approved for Laurel Road’s refinancing if you have someone to cosign on your loan. A cosigner shares the repayment responsibilities of the main borrower, reducing the risk for Laurel Road and making them more likely to work with you.

Interest rates

2.43% – 6.65% (with autopay) for variable rates

3.50% – 7.02% (with autopay) for fixed rates

Loan and refinancing terms

Any term which is not more than 20 years can be chosen subjected to conditions under Laurel Road.

Max variable rates capped at 9% for 5-10 year terms and at 10% APR for terms greater than 10 years.

Repayment and hardship options

No academic deferment is offered.

Laurel Road offers economic hardship forbearance for those on military leave.

Medical residents and dental fellows can pay $100 a month until 6 months after their residency or fellowship ends. Interest will accumulate during this time, and any unpaid interest will be capitalized at the end of the reduced payment period.

Postpone loan payments for 3 months at a time, for up to a total of 12 months, if you have proof of a qualified economic hardship such as involuntary job loss or unpaid maternity leave.

Laurel Road will forgive all or part of the loan in the event of the death of a borrower or proved permanent disability.

They do not Allow greater-than-minimum payments via autopay

Fees

No application, origination fees or prepayment penalties.

Additional features

In-house customer service teams are present.

Concerns are escalated through complaints and disputes to the customer service managers.

A bonus of $500 for each successful referral is given.

Parent PLUS Loans Refinancing

Refinancing option for parents on their Parent PLUS Loans is also available. The fixed rates start at 3.50% APR and variable rates start at 2.430% APR. They also provide the option to pass the PLUS loan to your child if they are now a working professional.


Learn more about Laurel Road student loan refinancing


6- Citizens One

Citizens One offers student loan refinancing for both private and federal loans through its Education Refinance Loans program.

Since Citizens One is a traditional bank, its loan application process is very thorough. You will have to fill out the application along with the requested documentation before hearing back. Just like other private lenders, Citizens One has a rate quote tool that uses a soft credit check to show users what rate they would qualify for without affecting their credit.

Best features

Borrowers without degrees are also able to refinance

Personalized rate estimates are obtained through a soft credit pull

Co-signer release is available after a period of 36 months of on-time payments

No need to have attended a Title IV-accredited school

Available in all 50 U.S. states for borrowers

Non-citizens can qualify if they can add an eligible U.S. citizen or permanent resident as a co-signer.

Drawbacks

  • It does not offer more than 12 months of forbearance with no more than 2 months at a time

  • It does not disclose a minimum credit score and income requirements

  • No biweekly payments via autopay

  • Cannot transfer Parent PLUS loans to Child

Requirements

Citizens, One does not disclose specific details about what it takes to qualify for student loan refinancing. Lenders typically look for borrowers who have good credit and enough income to afford to pay off their debts and expenses.

Financial aspects to be noted

  • No minimum credit score disclosed

  • No minimum income disclosed

  • No disclosure of the maximum debt-to-income ratio

  • No disclosure of whether you will qualify if you’ve filed for bankruptcy

  • A minimum household income of $24,000 from the borrower or the cosigner

Interest rates

Its fixed-rate loans range from 3.89% – 9.99% APR.

Its variable interest rate loans range from 2.93% – 9.67% APR.

Loan and refinancing terms

A minimum amount of $10,000 is required.

A maximum amount of $300,000 for a Bachelor's degree or below and $500,000 for Graduate Degree.

You can refinance on a term of 5, 10, 15, or 20 years.

Repayment and hardship options

You may postpone payments if you return to school at least half-time academically.

You may also postpone payments if you’re on active military duty.

Postponement of payments for up to 12 months in 2-month increments is offered to borrowers experiencing economic hardship.

Loans can be discharged in the event of the death of borrowers or permanent disability.

Fees

You don't have to worry about an application, origination, or disbursement fee, and there’s no prepayment penalty, either.

Additional features

Borrowers with a Citizens One account like a checking account or auto loan at the time of applying will get an additional discount of 0.25% off of the interest rate.

Parent PLUS Loans Refinancing

Refinancing option for parents on their Parent PLUS Loans is also available. The fixed rates start at 3.50% APR and variable rates start at 2.430%. The minimum amount of the loan eligible is $10,000 and the maximum amount is $500,000.

Parent PLUS Loans, private loans or any loan that a parent has borrowed or co-signed for the education of their child is eligible for refinancing.


7 - Education Loan Finance

Education Loan Finance (ELFI) has been offering student loan refinancing since 2015. As a division of SouthEast Bank, the management team has more than 30 years of extensive experience in student loans. The requirement in terms of minimum annual income is a little bit on the higher side when compared with other lenders.

Features

Borrowers are assigned a separate dedicated personal loan advisor who is a single point of contact from the time of application until pay off. Personal loan advisors are four-year college graduates who are trained and tested in student loan programs and refinancing.

Education Loan Finance gives borrowers the opportunity to save extra money with their special referral programs. If you refer a friend who ends up refinancing a loan, you’ll get $400 and your friend will get $100.

There is no prepayment penalty.

Drawbacks

Borrowers must have a minimum of 680 in credit score, at least 3 years of credit history and a minimum annual income of $36,000.

Deferment and forbearance may be granted for up to 12 months but at the discretion of the bank. Discharge due to death or disability is reviewed on a case-to-case.

No co-signer release option for the lifetime of the loan. However, you can apply for a new loan with no cosigner at all.

Best for people who

  • Inclined to work with a personal loan advisor

  • Can take advantage of bonus programs

Credit requirements

Minimum credit score - 680 or above

Minimum credit history - 36 months

Employment requirements

Minimum annual income - $35,000

Student eligibility

  • Eligible degrees - Undergraduate, graduate and other advanced degrees

  • Eligible loans - Private and Federal Loans

  • With a good credit score and credit history or with the addition of a co-signer who does

  • From all 50 states of America

Interest rates

Rate types - Fixed and variable.

An Autopay Discount is automatically applied to electronic payments for all the borrowers.

Loan and refinancing terms

Loan Amount -  Minimum of $15,000, Maximum amount not mentioned.

Loan Period - Minimum of 5 years, Maximum of 20 years for students and 10 years for parents.

Repayment and hardship options

  • No prepayment penalties

  • Deference and Forbearance may be granted for up to a period of 12 months

Fees

There is no origination fee.

There is a late payment fee of 5% of the past due amount or $50, whichever is lesser after a 10-day grace period

Additional features

You can earn a $400 bonus for every successful referral.

Parent PLUS Loans Refinancing

Refinancing option for parents on their Parent PLUS Loans is also available. The fixed rates start at 3.39% APR and variable rates start at 2.80%. The minimum amount of the loan eligible is $15,000 with a term ranging from 5 to 10 years.


Read more on Education Loan Finance 


8 - iHELP

iHelp services private student loans from its network of community banks. These partnerships allow iHELP to give eligible student borrowers the vast options to refinance their loans.

Features

The wide reach of iHelp gives student loan borrowers many options when it comes to borrowing money for their education.

They provide an option to transfer Parent PLUS Loans to the student.

No origination fees.

No prepayment penalty.

Release option for cosigner after 24 monthly on-time payments.

Drawbacks

Types of interest rates offered are restricted based on the terms of the loans. The 10-year and 15-year terms are only available with fixed interest rates while the 20-year terms may be chosen with variable interest rates or hybrid interest rates.

The interest rates on refinanced private student loans are a bit higher than other private lenders. This means that over the life of the loan, an iHelp borrower might pay more. However, because there are no origination or supplemental fees charged this makes it more cost-effective.

Eligibility Requirements

  • Be a U.S. Citizen or Permanent Resident

  • Need not have completed the undergraduate

  • No restriction in terms of the school attended

  • Have 2 years of positive credit history

  • Have an annual income of at least $24,000 for the previous two years

  • If required annual income is not met, must apply with an eligible cosigner

  • Be of legal age in the residing state

Loan amount

Minimum Loan amount - $10,000

Maximum Loan amount - $250,000

Interest rates

Fixed APR Range of 4.00%–5.55% (10 years), 4.50%–8.00% (15 years)

Variable APR Range of LIBOR + 2.50% to LIBOR + 7.50% (20 years)

Repayment and hardship options

Payment Options for borrowers while in school

  • Interest-only payments

  • No payments

  • Full principal and interest payments

For refinanced student loans with iHelp, borrowers have the choice between

  • Standard Payment

  • Graduated Payments

  • Income-Sensitive Payments

There are no prepayment liabilities for either in-school or out of school options. Options of deferment and forbearance are offered after graduation or after dropping down below part-time status in school.

Loan payments might be deferred for students in school, and forbearance may be requested in case of financial hardship, military service, or natural disasters.

Fees

  • No origination fees

  • No application fees

  • No prepayment penalties

Additional features

Before securing a student or refinance loan with iHelp, borrowers should take the time to think about the total cost of borrowing by way of the interest rate, as the current rates may be lesser in cost than what other private student loan lenders offer.


9 - Splash Financial

Splash Financial started as a refinancing company for medical students. They have expanded to refinancing college graduates in all fields. They have a unique feature where they allow couples to refinance their student loans together.

Best features

With a very easy-to-use online loan calculator and competitive interest rates for the purpose of the refinancing of student loans, Splash Financial is a highly reputable company whose products can save graduates thousands of dollars over the life of the loan.

Targeted primarily towards medical school graduates, Splash Financial is a great choice for any graduate who wants to simplify their payments and have some money saved in the process.

Married couples may refinance their loans together or transfer the loans by refinancing from one spouse to another.

Parent PLUS Loans may also be refinanced and transferred to their children.

Best suited for those who

Are Medical graduates and parents of graduates who want to pass their PLUS Loans to their children.

Student eligibility

  • US Citizenship is necessary

  • Verified income is a must

  • Have a minimum loan amount of $7,500

  • A degree is required from a Title IV accredited school

  • A minimum credit score of 670 or having an eligible co-signer

Interest rates

Fixed APR Range - 3.85% - 4.95% APR.

Variable APR Range - 3.10% - 7.84% APR

Loan and refinancing terms

Splash Financial offers loan refinancing for college graduates who have earned income after graduation.

The application is open to the graduate or the parent of the graduate with payment terms of 5, 7, 8, 10, 12, 15 or 20 years. Splash loan refinancing is offered through a larger credit union called PenFed, the nation's third-largest federal credit union.

Repayment and hardship options

One Full Repayment Option - Principle and Interest with Fixed Monthly Repayment.

In case borrowers face hardships deferment and forbearance are offered on a case-to-case basis.

Fees

  • No application fee

  • No origination fee

  • No prepayment penalties

Additional features

Splash Financial has earned an A+ rating from the BBB.

Although Splash Financial themselves have only been in the loan refinancing business for about 5 years, they have partnered with PenFed, an 80-year-old federal credit union with over 1.6 million members on its books and also rated A+ from the BBB.


Factors to consider when refinancing

The following factors will help you determine the effectiveness of your refinancing.

1 - Interest rate - The interest rate is the primary reason behind the loan costs. While refinancing, you may find both fixed-rate and variable-rate loans. Keep in mind that with a variable rate, your interest rate and payment can go up when market rates go higher.

With a fixed rate, it would not change for the lifetime of the loan. Variable rates are usually cheaper for short-term, but in a rising interest rate system, they can cost much more in the long run.

2 - Fees - Banks may charge an origination fee and other fees for servicing your loan. A fee-free student loan refinance is perfect if you qualify with a lender that offers such perk. Also, make sure you do not have any penalties for early repayment.

3 - Term - The term of the loan is the number of years within which you will make payments to clear your loan debt. A shorter loan usually saves you money by cutting down on interest, but that usually means a higher monthly payment. For your finances, a shorter term is better if you can afford to pay for it. Most student loan refinances options range from 5 to 20-year terms.

4 - Additional Benefits - Any additional benefits that the lender offers which would make a significant change for your situation should be considered important. For example, deferment and forbearance options are not offered by every lender but it may be a great option for you in the future. Other benefits that you may find are forgiveness, career coaches, financial advisors, community perks, and more. 

To qualify for refinancing, you will have to fulfill the requirements for a credit score, annual income, savings, and a college degree (or certificate of enrollment if you’re still in school) set by the lenders. If you do not qualify on your own yet, you could still apply with a creditworthy cosigner to increase your chances.


Top student loan refinancing queries answered

Refinancing can be quite overwhelming when you go through what it offers for the first time. Here is a list of queries answered to help you get an in-depth knowledge of what you can do with refinancing.

Which is the best lender to refinance with?

The best lender is the one who can offer you the lowest interest rate, if the interest rates offered are similar then you can look out for other features the lender offers. Check out the overview of the lenders mentioned in the article to help you get a better understanding of the various features offered.

It is important to not blindly lookout for features, instead see the feature which you can take the most advantage of.

Is it a good idea to refinance my student loans?

This is a tricky question as refinancing a loan should be done based on the individual's condition by considering the various factors as mentioned in the article you should be able to make a decision. If you qualify for a loan with a lower interest then go for it.

But it should be well noted that when you refinance with a private lender you lose the eligibility for the all the benefits offered by the federal loans.

What happens when I refinance my student loans?

A private lender pays off your existing loan or loans and you get a new loan with a new interest rate which you have to repay to the private lender.

What credit score do I need to refinance my student loans?

Typically the credit scores required by you or your cosigner is about 600. better the credit score better is the rate you could qualify for.


Still confused? Fret not and read more on student loans 


Conclusion

The best student loan refinancing company for you will ultimately be the one that offers you a loan which will help save the most over the life of the loan. In case the additional benefits offered by the company makes a huge difference for you, it can also be a factor for making your decision.

Narrow your choices down and apply to the best choices depending on your financial as well as personal situations. When researching for a refinancing company, do keep in mind that each program works differently for every individual depending on their situations. So the program that works for someone may not work for you and vice versa. 

**All the information mentioned above may be subjected to changes by the servicers and lenders without any prior notice.**


FAQ's

  Is there a downside to refinancing student loans?


Refinancing student loans can either be beneficial to you or may end up hurting you financially. If you only have private student loans, then a refinance can assist you in saving money in the long run with a lower interest rate, or it can help you financially stay afloat when your monthly payments are too high

  When should you refinance student loans?


For federal student loans, you can have anywhere between 10 to 30 years (for consolidated loans) to repay your loans. Refinancing companies usually offer repayment terms ranging from 5 to 20 years. Also, note that federal loans are fixed-rate loans that are guaranteed to maintain the same interest rate during repayment and throughout the term of the loan.

  Who is the lender for Splash Financial?


Splash works with a number of banks and credit unions, the lender of your loan will depend on the lending partner where you qualify for the lowest rates.

  How do I contact Splash financial?


You can email Splash financial at contact@splashfinancial.com or you can call them at  1-800-349-3938.

  How do I contact Earnest?


You can drop them an email at hello@earnest.com. You can contact them at (888)601-2801, 8am-5pm PST, Monday-Friday.