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Best Banks To Refinance Student Loans

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Best Student Loan Refinance Companies 2022

Student loan refinancing can mean big savings in the right circumstances. Heres how it works: A new private companytypically a bank, credit union or online lenderpays off the student loans you choose to refinance, and youll get a new loan with an interest rate tied to your credit history, income and other characteristics.

You should consider student loan refinancing if you have a good or excellent credit score and stable income and your current loans have high enough interest rates that youll benefit from a lower rate. In some cases, you can even refinance federal PLUS loans your parents took out to help you pay for college, relieving them of payment responsibility.

Below weve identified the best student loan refinance lenders for those who qualify, based on features including interest rates, availability to borrowers and hardship repayment options. None of the lenders on our list charge origination or prepayment fees, though some charge late fees. In some cases, they offer a separate refinancing product for parent loan borrowers we scored each based on their student loan refinancing option only.

  • Best Private Student Loans 2022
  • Best Student Loans for Bad Credit
  • Best Student Loans Without Co-Signer
  • Best Parent Student Loans
  • Best International Student Loans

Is Refinancing Right For You

When refinancing may be a good move

  • Youre financially secure with stable employment and solid credit score or cosigner
  • You currently have a high-interest rate
  • You can lower the amount of interest paid over the life of the loan
  • Your goal is to eliminate debt as soon as possible

When refinancing may be a bad move

  • You have an unstable income or employment situation
  • You plan to utilize an income-driven repayment plan for your federal loans
  • You intend to take advantage of federal loan forgiveness
  • Youre nearing the end of your loans repayment

Brazos: Best For Texas Graduates With Strong Credit And Income

Brazos Higher Education is a nonprofit lender specializing in student loan refinancing to Texas residents with competitive rates and flexible terms.

Minimum credit score: 690

Terms: Five, seven, 10, 15, and 20 years

Fixed and variable

Maximum loan amount: $400,000

Pros:

  • Forbearance options for economic hardships, active-duty military members, and natural disasters
  • Interest rate reduction with automatic payments

Cons:

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Best Rates: Splash Financial

Splash Financial offers some of the lowest rates for student lines and has both fixed and variable rates to choose from.

  • May need to join credit union

Out of all the lenders we reviewed, Splash Financial has the lowest interest rates for student loan refinancing. The lender offers the following rates :

  • Variable: 2.49% to 11.72%
  • Fixed: 2.59% to 8.49%

You can choose a loan term of 5, 8, 10, 12, 15, or 20 years. You must have at least $5,000 in student loan debt to refinance with Splash Financial, and there is no loan maximum. The lender does not charge any application fees, origination fees, or prepayment penalties. And, many of Splash’s lending partners offer cosigner release after receiving 12 consecutive on-time payments on your loan.

Read the full review: Splash Financial Student Loans Refinancing

Should You Refinance In September 2022

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I believe the majority of lawyers and other high-income professionals in the country could find a lower interest rate right now for their student loans through refinancing. Unfortunately, they dont because its so much easier to do nothing than it is to take action. Even though many borrowers could save thousands of dollars by spending a few minutes applying, they do not apply because they are busy with all of lifes other activities.

Borrowers who refinanced their loans even a few months ago often find better deals today because of the competitive nature of the student loan refinancing business, the low interest rate environment, and the continued improvement of the borrowers debt-to-income ratio and credit score.

Many federal loan borrowers have been waiting until the end of April 2022 to refinance their loans because President Biden issued an executive order suspending federal student loan interest through May 1, 2022.

If you are a borrower with private student loans, youll want to apply to several companies to make sure you are getting the best rate.

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How Many Times Can You Refinance Student Loans

There is technically no limit to how many times you can refinance student loans, though after completing the process a few times, it likely wont be useful anymore. The main reason to refinance debt is to secure a lower interest rate, and at a certain point, you may find you already have the lowest rates possible.

Commonbond Disclosures: Private In

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC , NMLS Consumer Access . If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. All Annual Percentage Rates displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.

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Before Applying For A Citizens Bank Student Loan

Before taking out a Citizens Bank student loan or any other private student loan, exhaust your federal student loan options first. Submit the Free Application for Federal Student Aid, known as the FAFSA, to apply.

Compare your private student loan options to make sure youre getting the best rate you qualify for. In addition to interest rates, look at lenders repayment alternatives and the flexibility they offer to borrowers who struggle to make payments.

How Could Getting A Student Loan From A Bank Benefit Me

Student Loan Refinance – Top 5 Companies for Refinancing Student Loans

While banks might not be as fast as online lenders, you can often get a better deal and know exactly who youre working with. Here are a few reasons why you might want to consider a student loan from a bank:

  • Competitive rates. Because banks are typically more established than most online lenders and can afford to offer lower rates, you could end up with a much more competitive APR provided you meet the credit requirements or have a qualified cosigner.
  • Less risky. Being established has an additional benefit: Theres less of a chance that a bank will be shut down or stop its student loans program without notice.
  • Loyalty perks. Banks tend to value loyalty in a way that other lenders dont. If you already have an account with a bank, your loan application process could be faster and you could be eligible for loyalty discounts like the interest rate reduction that Citizens Bank and SunTrust offer.

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Will I Qualify To Refinance

You wont know if you qualify until you apply.

However, the best applicants have the following in common: A credit score of 650+, currently employed , a low debt-to-income ratio, and no history of student loan default.

If you have bad credit or cant check off the other boxes, youll likely need to apply with a co-signer.

Each lenders decision is independent, so being rejected by one does not mean that youll be rejected by all of them.

Look For Your Options If You Encounter Hardship

One good thing about student loans from the federal government is that there are protections for when you experience hardships such as losing your job or getting divorced and losing income. Some federal loan programs also offer a grace period after you graduate, giving you time to secure a job before you begin making student loan payments. When you refinance federal student loans, youre taking out a private student loan and that means you will lose your federal protections.

If youre considering refinancing your student loans with a specific lender, ask about what provisions are available for hardships or times when your economic situation may change. These provisions may include things such as forbearances or deferments.

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Can I Refinance My Student Loans Multiple Times

There’s no limit on how many times you can refinance your student loan. In fact, one Select reporter refinanced their student loans six times and was able to save thousands in interest this way. The process to refinance student loans is quite simple and there usually aren’t any costs or penalties associated with doing so.

What If I Am Rejected By A Lender

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If you have trouble qualifying for a low-interest loan, you have a few options:

  • Ask a trusted friend or family member with good credit to cosign your loan. If your cosigner has good credit history, you are more likely to be approved for a loan with lower interest rates.
  • Apply to multiple lenders to see your refinancing offers and increase your chance of approval. Multiple applications made within 30 days is only treated as a single inquiry and will not cause much damage to your credit.
  • Consider working on improving your credit. You can check your credit report for any errors and dispute them either on your own or through a reputable credit repair service.You can obtain a free copy of your credit reports from the three bureaus through AnnualCreditReport.com.
  • Lower your credit utilization by increasing the amount of available credit you have. This means paying off credit card debt to an amount that is ideally under 30%.

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Lendkey Student Loan Refinance Review

At ConsumersAdvocate.org, we take transparency seriously.

To that end, you should know that many advertisers pay us a fee if you purchase products after clicking links or calling phone numbers on our website.

The following companies are our partners in Student Loan Refinance: Earnest, Credible, SoFi, LendKey, Citizens Bank, College Ave Student Loans, ELFI Education Loan Finance, Laurel Road, Splash Financial, PenFed Student Loan Refinancing , and Lend-Grow-Inc.

We sometimes offer premium or additional placements on our website and in our marketing materials to our advertising partners. Partners may influence their position on our website, including the order in which they appear on a Top 10 list.

For example, when company ranking is subjective our advertising partners may be ranked higher. If you have any specific questions while considering which product or service you may buy, feel free to reach out to us anytime.

If you choose to click on the links on our site, we may receive compensation. If you don’t click the links on our site or use the phone numbers listed on our site we will not be compensated. Ultimately the choice is yours.

The analyses and opinions on our site are our own and our editors and staff writers are instructed to maintain editorial integrity. Our brand, ConsumersAdvocate.org, stands for accuracy and helpful information. We know we can only be successful if we take your trust in us seriously!

When To Refinance Federal And Private Student Loans

After paying off over $200,000 in student loans myself and helping thousands of lawyers achieve a debt-free lifestyle, heres what I tell borrowers when they ask if they should refinance.

Refinance federal student loans if you:

  • Work in the private sector
  • Plan to pay off your loans
  • Owe student loan debt less than 1.5 times your income

Refinance private student loans if you:

  • Find a lower interest rate
  • Have decided to get aggressive about repaying your loans and so are switching from a fixed to variable interest rate
  • Want to change your monthly payment
  • Havent checked what lenders are offering in the market in at least six months
  • Have a better credit score than when you refinanced previously

You can refinance private loans as many times as you want. Some readers have refinanced two, three, four or even more times. The only thing that matters is that you find a better rate.

Wait to refinance federal loans until the Zero Interest and Payment Period ends.

Remember that refinancing federal student loans eliminates income-driven repayment, forgiveness, and the most generous forbearance options. Private student loans do not have these options.

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Should I Consult A Financial Advisor Before I Refinance

Your refinance lender should send you several legal disclosures. Read these disclosures carefully and make sure you understand your rights and responsibilities. If you still have concerns or there is anything you do not understand, it may be wise to meet with a third-party advisor. A financial professional may also alert you if anything in your loan contract seems suspicious.

The Requirements To Refinance Student Loans

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The requirements to refinance student loans are a bit different than when you took out your loans. For federal loans, you simply had to fill out the FAFSA. With some graduate school loans , you might have had to have a credit check beyond the FAFSA.

However, with private student loan refinancing, the requirements are more like getting a car loan or mortgage.

Lenders will typically look at:

  • You Credit Score
  • Your Annual Income
  • Savings and Other Assets
  • Degree Type and College

If you don’t meet all of these requirements, you might need to get a cosigner for your loan. Read this full guide on how to get a student loan with no cosigner.

Credible does offer loans with no cosigner for qualifying candidates.

What Credit Score Do I Need To Refinance Student Loans?

There is no specific credit score that is required to refinance student loans – but most lenders want to see 600 or higher. However, the better your credit score, the better rate and terms you can qualify for.

To get the lowest advertised rates, most lenders will want to see a credit score about 750 or even 775.

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Should You Consider Refinancing Your Student Loan

Many people had to take out student loans to get a degree and want to know if they should consider refinancing their student loans. Before deciding, consider your needs and assess your current situation. Think about if its a good time to refinance and consider what your current rate is, if you could potentially qualify for a lower rate and if any fees will be involved.

However, it may make sense to hold off on refinancing your student loans if your income isnt stable and your FICO score is low.

How Does Refinancing Affect My Credit

When you refinance your student loan, lenders will do a hard inquiry on your credit report to determine your borrower risk. This may lower your credit score by five or so points, but it’s likely to go back up as you continue to make on-time monthly payments on your new refinanced loan.

Many lenders as well as loan marketplaces offer prequalification tools where you can quickly input your personal information and see rate quotes from lenders without actually applying and affecting your credit. You’ll be able to get an idea of your interest rate, repayment term and any fees. Choose the lender that offers you an interest rate considerably lower than the one you currently pay.

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Latest News On Student Loan Refinance

As the deadline on the current student loan repayment moratorium approaches, the question on everyones minds is: Will Biden Push Back Student Loan Payments Again? Some industry experts believe an extension is very likely, but borrowers will have to wait till the end of August for an official announcement.

Refinancing student loans especially when interest rates drop seems savvy but it may not make financial sense for many. How To Refinance Student Loans lists the benefits and drawbacks of refinancing, what it means for federal borrowers and walks readers through the application process.

As inflation skyrockets, some argue that massive student debt relief will worsen it. However, according to recent research, economists and financial experts, this concern is misguided and distracts from more important obstacles regarding debt forgiveness. Read what experts had to say about inflation and student debt cancellation in Would Student Loan Forgiveness Make Inflation Even Worse?

Which Lender Is The Most Trustworthy

Best Banks To Refinance Student Loans With

The Better Business Bureau, a non-profit organization focused on consumer protection and trust, measures businesses using information like their responsiveness to consumer complaints, truthfulness in advertising, and transparency about business practices. Here is each company’s score:

Lender
College Ave A+

All of our top picks are rated A or higher by the BBB, with the exception Splash Financial. Splash Financial received a B+ rating because of eight complaints filed against the business.

It’s important to note that a good BBB grade doesn’t guarantee you’ll have a good relationship with your lender. Ask family and friends about their firsthand experience with the company before signing on the dotted line, or read online customer reviews.

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What Are The Eligibility Requirements To Refinance A Student Loan

Lenders consider many things when deciding if you are a good candidate for student loan refinancing. Here are what companies typically consider:

  • Eligible Loans: Most lenders refinance federal and private student loans for undergraduate, graduate, and professional degrees. There may be additional criteria around eligible degrees and schools.
  • Most lenders will perform a credit check and look for a credit score of at least 660.
  • Repayment History: You will need to have a solid repayment history on your current student loans.
  • Consistent Income: Lenders like to see that you have consistent enough income to afford your monthly payments.
  • Debt-to-Income Ratio: Some lenders may look at your debt-to-income ratio to gauge if you can afford your new loans monthly paymentst. Ideally, your debt-to-income ratio should be 40% or less.
  • U.S. Citizenship: Most lenders require that you are a U.S. citizen or permanent resident, or have a cosigner that is.
  • State Requirements: Some banks and lenders may only accept applicants from certain states.

If you don’t meet some of the criteria above, you may want to consider applying with a creditworthy cosigner. A cosigner can help you become eligible and give you access to lower student loan refinance rates.

> > Read More:Can you refinance student loans

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