Citizens Bank Student Loan Consolidation Review

Citizens Bank offers private student loan consolidation to nationwide borrowers. They consolidate your loans and then refinance them to you with revised terms and rates. As per your location, you might be directed to Citizen One website which is the national lending division for Citizens Bank.

Citizens Bank, one of the traditional banks in student loan refinancing is the parent company of Charter One Bank. Citizens and Charter One are two different entities, but their loan rates and terms are found to be the same. In this article, we review the student loan consolidation policies presented by Citizens Bank/Charter One Bank.

Table of Contents

What is consolidation?
What is refinancing?
The basics of Citizen Bank Student Loan refinancing
Pros of Citizens Bank Student Loan refinancing
Some concerns regarding Citizens Bank Student Loan refinancing
Scopes of improvement
How useful is it for you?

What is consolidation of Student Loans?

Student loans are of two types: Federal and Private. Consolidation is only applicable to Federal Student Loans. Federal Student Loan consolidation combines multiple federal loans into a single federal through the Department of Education. Consolidation is required to be eligible for some federal repayment programs but federal consolidation doesn’t lower your rate of interest. It can lower the monthly payments by extending them. Federal Student Loans provide several benefits to students that help them during their repayment journey. To add on to these benefits, the Federal Government has provided an option to consolidate the multiple federal loans into a single loan leading to a single payment to be made each month. This helps students manage their loans easily.

What is refinancing of Student Loans?

Refinancing can be done on both Federal and Private Student Loans which provides a borrower with revised rates of interest. In this way, students can save while making repayments for their loans. Student loan refinancing, also known as private student loan consolidation, is a financial move that is done via a private lender. Refinancing can consolidate both federal and private student loans and provides a single loan with revised interest rates and terms.

The basics of Citizen Bank Student Loan refinancing

When you refinance your student loans, you receive more benefits apart from the savings. Consolidating student loan debts into a single monthly payment makes it easier to keep track of the monthly payments. Citizens Bank provides easy accessibility to its customers.

As far as eligibility criteria are concerned, former borrowers who have a Social Security number are eligible for refinancing. You must also have a credit score of at least 680 and $24,000 in annual income.

Upon clearing the above criteria, Citizens Bank offers the following perks of refinancing for you:

You can check out your potential fixed or variable interest rate within minutes without harming your credit.
You receive refinancing policies on a minimum of $10,000 and a maximum of $300,000 for bachelor’s degree holder or $500,000 for professional degree holder
Up to 0.50% interest rate discount can be received for being an existing Citizens Bank customer and enrolling in autopay
After making 36 on-time payments, you can apply to release your cosigner
Origination, Application fees, and Prepayment penalties are waived off
Repayment terms of 5,7,10,15 or 20 years are available

Worried about your College Tuition? Find the best student loans for you.

Pros of Citizens Bank Student Loan refinancing

The interest rate received is typically the most important part of a loan agreement. It determines the amount is saved from refinancing.

Citizens Bank provides competitive rates for variable interest loans starting as low as 2.29% for its student loans. The fixed-rate loans start at 3.59% while peaking at 8.66%. The bank also offers incentives to reduce your interest rate. If you or your cosigner has savings or checking account, you can get an additional 0.25% off your interest rate. Opting for automatic payments makes you eligible for an additional 0.25% discount.

The Bank claims customers can save an average of $3,036 per year with a Citizens Bank Education Refinance Loan by refinancing and consolidating all their private and government, undergraduate and graduate loans into a single affordable loan. They furnish lower interest rates, reduced monthly payments, fixing a variable-rate and even remove a consigner to gain financial independence and control. Some highlights regarding Refinancing Policies are discussed underneath:

Eligibility requirements

The eligibility requirements and the flexibility provided by Citizens Bank are listed as under:

Some banks and lenders provide refinancing only to U.S. citizens with at least a 4-year degree. Citizens Bank is flexible on both fronts in this case
Citizens Bank provides refinancing even if you didn’t complete your graduation. This helps students who left school early as they can save on their debts. The only rule is you must no longer be attending school and should have started making payments on your debt

Easily accessible Online Platform

Citizens Bank provides an online platform that is accessible to its borrowers. Some of the features of the platform are:

Citizens Bank provides you with personalized rate and savings quotations
They provide a Get My Rate tool which triggers only a soft credit pull
Citizens Bank provides a robust mobile banking app. Through the app one can check their balance, make payments and review their account history

Some concerns regarding Citizens Bank Student Loan refinancing

Citizens Bank offers various benefits as discussed in the above section. But before you apply for refinancing from Citizens Bank, you should keep the following points in mind.

Strict terms and conditions

What many borrowers don’t like is Citizens Bank’s emphasis on co-signers. Most borrowers try to avoid co-signing. Many co-signers would like to be released within a year or two. The mandatory 36-months waiting period for a cosigner release with the Citizens Bank is one of the longest.

Also, the company doesn’t offer a generous safety net for struggling borrowers, apart from forbearance during economic hardship, which many other lenders provide.

Requirements for modern perks

Competitors to Citizens Bank provide more modern perks such as:

SoFi offers unemployment protection and career guidance during the repayment period
CommonBond funds the education of an underserved student abroad when you refinance
Earnest lets you choose from as many as 180 repayment term options, spanning five to 20 years

Limited Repayment Protections

You should check the safeguards provided by lenders and compare them before selecting a refinancing lender. An example would be you be able to pause your monthly payment, say for a job loss. This would help you to avoid student loan defaults.

Citizens Bank awards forbearance on a case-by-case basis for borrowers experiencing financial troubles. Postponement of your monthly payment can be done for up to 12 months.

When compared to its competitors, Citizens Bank can provide transparency in its policies. For example, the unemployment protection program by SoFi lists out how one can qualify for relief.

Scopes of improvement

Citizens Bank willingly provides refinancing to large student loans. Some improvements that could be made are:

Providing a wider selection of loan terms for student loans
Allowing borrowers to refinance federal loans enrolled in income-driven repayment plans
Providing more transparency around minimum income and credit requirements
Offering specific terms for forbearance
Allowing biweekly payments via autopay

It is advised to learn in detail about Citizens Bank student loans before you opt for consolidation. In this way, you get to know about the company before you consolidate your student loans with them.

How useful is Citizens Bank Student Loan Consolidation for you?

Citizens Bank and Charter One student loans consolidation program come under the top 10 of such programs largely due to the low-interest rates advertised. If you find refinancing to be the right measure for your student loan debts, it is advised that you look for the right lender.

The low-interest rates and easy-to-use online platform provided by Citizens Bank should woo you into keeping Citizens Bank as an option. While comparing Citizens Bank with its competitors, you should keep in mind that you must possess a strong credit profile, or should have a cosigner with one.

Online lenders sometimes offer more perks and stronger repayment protections than traditional banks.