Student loan refinancing offers the ability to lower your interest rate, get more flexibility with your monthly payments, and more. Before applying with a lender, however, it’s important to shop around and compare multiple offers.
In your search, you will come across banks, credit unions, and online lenders that offer refinance loans. There are several reasons why a bank might be the best choice for you; for one, you may be able to get a discount if you have other products from the bank, and you can also benefit from the convenience of a local branch for personalized assistance.
What is student loan refinancing?
Student loan refinancing involves paying off one or more existing student loans with a new loan through a private lender. Refinancing may have some advantages, including the possibility of getting a lower interest rate, but refinancing federal student loans will cause you to lose access to benefits offered by the US Department of Education.
As such, it’s crucial that you take the time to understand both the pros and cons of refinancing before making the decision. Refinancing is a good idea if you have private student loans and can qualify for a lower interest rate than what you are currently paying. If you have federal student loans or can’t qualify for a lower interest rate, it’s probably best to wait for now.
5 banks that refinance student loans
If you’re thinking about refinancing your student loans, here are five banks to get you started on your search.
Citizens Bank
Citizens Bank is one of the few student loan refinance companies that will allow you to refinance your debt even if you haven’t graduated. The bank offers loans ranging from $10,000 to $750,000 (the limit is $300,000 for bachelor’s degrees and below).
The repayment options are five, seven, 10, 15 and 20 years. The bank’s interest rates are competitive and you can choose between fixed and variable rates. In addition to an automatic payment discount, Citizens Bank offers an interest rate discount of 0.25% if you or your co-signer have an eligible bank account with the lender at the time of your application.
Citizens Bank does not disclose a minimum credit score, but it does indicate that you need good credit. You will also need to earn an annual income of at least $24,000 and not have defaulted on your student loans in the past. The Citizens Bank co-signer release period is also relatively long at 36 months.
SoFi
SoFi started strictly as a student loan refinancing company, but received approval from federal regulators in early 2022 to become a national bank. The online bank offers loans as low as $5,000 with no cap. The repayment terms are five, seven, 10, 15 or 20 years.
The lender’s interest rates, both fixed and variable, are competitive. If you find a better rate elsewhere, SoFi will match it and give you $100 when you complete the funding process. What really sets SoFi apart from other lenders, however, are its member benefits. You’ll get interest rate discounts on other SoFi loans, 10% off an estate plan, professional resources, an unemployment protection program and more.
You can refinance with SoFi if you have at least an associate’s degree, but the lender does not publicly disclose any minimum credit or income requirements. You are also not eligible if your loans were taken out for bar studies or residency.
NCP Bank
PNC Bank’s student loan refinance program may be worth considering if you don’t have a ton of debt, don’t have a degree, or aren’t likely to get the best rates. of market interest.
PNC Bank’s lowest interest rates aren’t as impressive as those of other major student loan refinance lenders. However, its interest rate ceiling is quite low. You can also get a 0.5% discount on your interest rate if you set up automatic payments. Autopay rebate is not unique, but most lenders only offer 0.25%.
The lender does not provide concrete eligibility criteria, but if you need a co-signer to be approved, you can release them from their obligation after making 48 consecutive payments on time and passing a credit check – a period of much longer wait. than with other lenders.
Road of laurels
Laurel Road is an online banking brand for KeyBank, with student refinance loans ranging from $5,000 up to your full outstanding loan balance. The repayment terms are five, seven, 10, 15 and 20 years.
The lender’s interest rates are competitive and you may qualify for a discount if you have a checking account with Laurel Road and meet direct deposit and savings balance requirements. This is in addition to the 0.25% autopay discount.
You must have an associate’s degree or higher to qualify. And if you have an associate’s degree, you must have completed a degree in a healthcare field.
Student loan financing
Education Loan Finance (ELFI) is the student loan refinancing division of SouthEast Bank. The minimum loan amount is a bit high at $15,000, with the limit varying based on eligibility. Repayment terms include five, seven, 10, 15, and 20 years, although parents are limited to a 10-year repayment period. The lender offers competitive fixed and variable interest rates.
ELFI has some drawbacks. Namely, there is no co-signer release program and a bachelor’s degree is required to refinance. On the plus side, however, ELFI is more transparent than other lenders about its eligibility criteria. To qualify, you must have a minimum income of $35,000, a minimum credit score of 680, and a minimum credit history of 36 months.
Advantages and disadvantages of refinancing a student loan with a bank
If you’re considering going with a bank to refinance your student loan, consider the pros and cons.
Benefits
- Some discounts for existing customers.
- Potentially more personalized terms.
- Network of branches for in-person assistance.
The inconvenients
- Often higher interest rates.
- May not offer the unique benefits of online lenders.
How to refinance with a bank
To refinance student loans with a bank, you will follow a similar process as you would with an online lender:
- Compare the prices. You’ll start by comparing interest rates from several companies, which should include both banks and other types of lenders. Most student loan refinance companies allow you to get a quote with a simple credit check, making the comparison process easy and risk-free.
- Apply online. Once you have chosen a lender, you apply directly through their website. You will need to provide information about yourself, your school, and your student loans. After you submit your application, the lender will perform a credit check and ask you to provide documents, such as pay stubs and a copy of your driver’s license.
- Accept the loan. If the lender approves your loan, you will receive a final offer, which may or may not be the same as the original quote. At this point you can decide whether or not to accept the loan. If you don’t, you can repeat the process with other lenders, but if you want to go ahead with this particular lender, read the agreement and sign the documents. The lender will repay your existing loans directly, but you will need to continue making payments until this is confirmed.
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