Laurel Road was started as a digital lending platform by the Laurel Road Bank in 2013. They have successfully consolidated and refinanced more than $4 billion student loans in total. On top of refinancing student loans, they also offer graduate loans, mortgages and personal loans. They also offer a personalized experience for their customers through their secured digital platform.
On April 3, 2019, Laurel Road was acquired by KeyBank from Laurel Road Bank as a strategy to expand its digital capabilities. The brand name remains the same even though the acquisition includes the digital platform and not the Laurel Road Bank itself.
With their remarkable records in consolidation and refinancing, Laurel Road has been one of the top choices for student loan refinancing. In this article, we will review the services and features of their refinancing program in detail.
List of contents
- 10 Reasons to refinance with Laurel Road
- Who can refinance with Laurel Road?
- How to apply for Laurel Road Student Loan Refinancing?
- Should you refinance your student loans?
- Wondering if refinancing is worth the trouble?
10 Reasons to refinance with Laurel Road
If you plan to refinance your student loans, you have multiple options to choose from. In general, all refinancing programs share the same basic outline. They provide you a program where you can combine one or more loans into a single loan with a new interest rate and loan terms.
However, some refinancing programs may have their own unique features that set them apart from other programs. The top 10 reasons to refinance your student loans with Laurel Road are given below.
1 - Best interest rate offering
Laurel Road offers some of the best interest rates in the student loan refinancing market. Almost every digital refinancing platform lets you have an initial checking of the interest rates that you are eligible for. Often times, Laurel Road offers the best interest rates among its competitors.
2 - Loan term flexibility
They offer 5, 7, 10, 15 and 20-year loan terms to choose from. Meanwhile, some refinancing companies offer only one or two loan terms which you may not be able to make a choice on.
In case you want a different term other than the specified years here, it will change your loan term for you as long as it is under 20 years. These options are available regardless of the type of interest rate you choose - whether it is fixed or variable.
3 - Forgiveness and Discharge
In the case of the death of a borrower, the remaining amount of the loan will be forgiven. In the case where the borrowers face unanticipated circumstances causing permanent disability, the whole or a part of the remaining loan amount will be discharged.
4 - Refinance without any limit
You may refinance any loan amount higher than $5,000. There is no maximum limit, unlike some lenders who set a maximum amount.
5 - No fees charged
Paying money to save money seems contradictory to a certain extent. You do not have to pay any fee for refinancing.
There is no application or loan origination fee when refinancing with Laurel Road. On top of that, there is no fine or penalty for prepayment or early payoff.
6 - Forbearance of 12 months
You have the option to put your loan payments on hold in case you ever lose a job. Laurel Road gives you a 12 month forbearance period over the life of the loan.
Forbearance in times of financial stress can be a huge relief.
7 - Retain your grace period
In case you refinance a loan that has or is in a grace period, Laurel Road will not discard this benefit. You will get to keep your grace period even after refinancing.
In case you are in a medical residency, you can even have the payments deferred for 6 months after it ends.
8 - Extra rate discounts
Additional rate discounts will be given to you if you are a current customer of Laurel Road. If you have a checking account with DRB, you are eligible for an extra 0.25% discount off of your interest rate when you opt for automatic payment.
9 - Referral bonus
You can receive a $400 referral bonus when someone signs up for refinancing through your referral. There is no maximum limit to the number of bonuses you can receive. This feature is quite unique and useful.
10 - No location restrictions
You are not restricted on the basis of your place of stay. Laurel Road provides services to all the 50 states of America. Some refinance lenders offer loans in only a certain number of states and this proves to limit options for many people.
Who can refinance with Laurel Road?
Refinancing is, in many ways, similar to taking a fresh loan. Hence, lenders have to set certain eligibility criteria in order to check if borrowers are capable of making regular repayments. Laurel Road will concentrate on whether borrowers have established themselves with a job and a salary after finishing their education for which the loan was originally taken.
The basic eligibility criteria for Laurel Road student loan refinancing are as follows -
You must have a Bachelor's, Graduate, or a Professional degree
You must be employed or have a confirmed job offer
Should be a U.S. citizen or permanent resident
Meet the credit underwriting standards
You must have at least $5,000 in loans
Apart from the points mentioned above, your credit score and income will weigh a huge role in determining the final interest rate of your loan. Parents who borrowed for their dependent child may also refinance their loans with no maximum limit on the loan amount.
Additional criteria are present for Associate degree applicants which are mentioned below.
If still in school - Must be enrolled in the final year in eligible Title IV school and have a job offer in his/her respective field.
If a degree has been earned - Must have graduated from a Title IV school and has a minimum of 12 years of working experience in the respective fields of study.
How to apply for Laurel Road student loan refinancing?
The application process for Laurel Road is fairly simple. Firstly, you have to check if you are eligible for their refinancing program. You do this by filling up a short form on their website and sign up on their platform. After that, you will have to fill in details regarding your school and loans.
They will instantly inform you whether you are eligible to apply or not. If you are eligible, they will give you an instant estimate of your rates for the details that you have entered.
The next step is the application for the loan refinancing. In these few steps, you will be asked to submit all the necessary details of your school, loan account, and other personal details.
You will also be able to choose and review the entire loan features and terms. If your application is approved after submission, Laurel Road will pay off your old loans. After this is done, you will have to start making repayments to Laurel Road.
Should you refinance your student loans?
You should refinance your loans only if you are sure that the new loan will give you the benefit that you are looking for. It may be in terms of lower interest rates or changing loan terms to reduce the monthly payments.
If you choose wisely and make calculated moves in refinancing your student loans, it has the potential of reducing your financial burden as well as save you thousands of dollars over the life of the loan. When you refinance with Laurel Road or any other applicable refinancing company, you must consider the following factors and make a decision.
Estimate refinancing risk
When refinancing federal or private student loans, it will be converted into a single private loan. It means that you will be giving up all the features and benefits of your previous loans. If you a federal student loan borrower who depend on the Income-Driven Repayment (IDR), you will no longer be able to exercise this feature.
Deferment and forbearance that comes with Federal Loans will be gone. If you are someone who has been working for forgiveness towards your IDR Plan or Public Service, you will no longer be able to get the forgiveness.
So, refinancing may sound appealing but it is not always the best option. Ultimately, you must choose the path where you will pay the least while taking the least financial burden.
Variable interest rates always seem to be more appealing as they can be much lower than fixed rates at first glance. However, you are advised to take variable interest rates only if your loan terms are short and have the capability to handle interest amount in case the market fluctuates and your interest rates flare-up.
The Variable APR is capped at 9% for a 5 and 10-year loan and 10% for 15 and 20-year loans. Even if you start at a much lower interest rate, theoretically, your interest can triple over the life of the loan.
The lenders have their own set of minimum credit score required. If you do not meet the criteria you will be asked to apply with a cosigner. Finding a cosigner who is willing to put forth his/her credit score and financial situation is not an easy task.
If you are unable to provide a creditworthy cosigner, refinancing may be out of your options.
Wondering if refinancing is worth the trouble?
Refinancing is all about the search to get the best rate you can get at that point in time. You might not get the lowest rate that is advertised by Laurel Road.
The change in the interest rate of your new loan will largely depend on how you have improved your credit score and credit history. Not everyone benefits equally when refinancing even if you refinance under the same company. If you have got some good credit, you are more or less likely to get a much better rate compared to someone with an average credit score or FICO score.
If you are offered an interest rate that you do not feel comfortable with or one that you are not willing to sign up for, you have no obligation to proceed with the application.
On a general note, someone who still has a long term to make repayments will gain much more from refinancing than someone who has only a few repayments to make.
Still confused about loan processes? Learn about student loans, lenders and repayment plans
Laurel Road has been a major player in the student loan refinancing market and, hence, is a very good option in you have decided to refinance your student loans. However, one company can not perfectly serve the entire country. Hence, they will be effective for some borrowers but not for others.
You are advised to choose a refinancing company after doing a thorough research and make a decision responsibly. If you believe that you have made a mistake in your choice after refinancing, do not despair. You can still look for a better option as refinancing of student loans can be done more than once.
Advantages of refinancing with Laurel Road
One of the major advantages of Laurel Road is that it is not just another student loan company but the product of a Bank. Since banks face a higher range of scrutiny in the sense of lending practices in comparison, it will be much less likely for borrowers to face any minor issues with their lenders.
It is also one of the few lenders in the student loan business that offers a very tight range of interest rates. They usually do not offer the lowest advertised rates on the market, since most borrowers do not have enough credibility for such rates. However, when borrowers apply for loan estimates, they tend to find that the offers from Laurel Road in terms of interest rates to be one of the best.
If you are currently a medical professional, Laurel Road offers a number of unique services that are tailor-made for your situation. It also takes into account your residency and fellowship repayment options. You will be allowed to pay as low as $100 until you become an attending physician.
This allows borrowers to lower their interest amount and keep their payments down until their finances allow for a higher amount of payments per month. Moreover, the interest amount during this period is not capitalized until you finish your residency and go into a standard repayment plan.
Lastly, it offers a bonus of $150 to its new customers. Borrowers must still try and focus on getting the lender that offers them the best interest rates and fees.
Disadvantages of refinancing with Laurel Road
The major disadvantages of Laurel Road mentioned here apply to almost every other lenders in the student loan market.
Firstly, they let you consolidate your federal student loans in their private student loan refinancing options. For certain borrowers, this might seem like a pretty smart financial move. Because reducing the interest rates on your federal student loans can help you save a few thousand dollars over the life of your student loans.
However, making this choice can also be a major mistake as this also means that student loan forgiveness programs and an income-driven repayment plan will no longer be available for you. So when you choose to consolidate make sure you keep in mind that you are giving up these privileges and you are doing so knowingly and understand the consequences.
Secondly, Laurel Road offer a co-signer release program. But you must keep this in mind and also prepare your cosigner to not expect or rely upon this cosigner release. For starters, borrowers are unable to even apply for a cosigner release for the first 36 months of their loan repayment plan.
After the first 36 months, they are eligible to submit a release application. But it does not necessarily mean that it will be approved. Since this cosigner release involves so many steps and due to the nature of uncertainty of the release program, we encourage all the cosigners who are present on all loans to be ready to stay for the entire duration of the loan period or until the loan is repaid in full.
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Is Laurel Road available in all 50 states?
Since Laurel road is a part of KeyBank, NA, it offers its services throughout the United States.
What is the maximum amount I can refinance for my Associate Degree Loans?
Up to $50,000 will be refinanced by Laurel Road for Associate Degree Loans in an eligible healthcare field.
Can I make additional payments to my Laurel Road Loan?
No penalty will be charged for additional payments made greater than the installed amount. This additional amount will be applied to your principal amount after the outstanding interest is covered.
How does Laurel Road offer such low rates?
Laurel Road has a team of financial experts that work to assess the rates that they can offer based on risk criteria and since they work with creditworthy borrowers, they are able to offer favorable rates.
When will my first payment be due?
The first payment is due 1 month after the date loan is disbursed.