Details: Student Loan Refinance Rates In 2021
The best student loan refinancing companies offer competitive interest rates and fees for qualified buyers. These companies also offer helpful resources on their websites, as well as the ability to apply for student loan refinancing online. Compare each of these lenders’ loan terms and limitations before you apply.
- Best overall student loan refinance company: SoFi
- Best student loan refinance company for flexible repayment options: Earnest
- Best student loan refinance company for students in health care: Laurel Road
- Best student loan refinance company for forbearance protection: CommonBond
- Best student loan refinance company for available discounts: Citizens Bank
- Best student loan refinance company for comparing multiple lenders: LendKey
- Best student loan refinance company for no fees: College Ave
- Best student loan refinance company for low rates: Splash Financial
Whats The Difference Between Private Refinancing And Federal Consolidation
Although refinancing can simplify your debt by combining multiple loans into one, its different from federal student loan consolidation. You refinance student loans with a private lender, but you consolidate loans by taking out a direct consolidation loan from the federal government.
Federal consolidation combines federal student loans into one new loan, and it lets you choose new repayment terms. But it doesnt lower your interest rate, so you wont save money on interest-only student loan refinancing helps you lower your rate, if you qualify. You can compare the two with our Student Loan Consolidation vs. Refinancing Calculator.
Cons Of Refinancing An Auto Loan
Potential downsides of refinancing an auto loan include:
Lowering your credit score: A lender will pull a hard credit check before making an official refinancing offer, and the hard credit check affects your credit score whether or not you choose to refinance.
Paying more in the long run: While monthly payments may be more budget-friendly in the short term, they may entail a longer loan term. As a result, lower monthly payments can result in paying more in interest over the life of the loan.
Risking your vehicle: If you used your car as collateral for a personal loan, as described above, falling behind or stopping payments could result in the lender repossessing your vehicle.
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Is Refinancing A Good Idea It Might Be If
Youre looking for an opportunity to pay off your loan faster or lower your monthly payment
A new loan with a lower interest rate can decrease your monthly payment and/or allow you to pay off the loan faster. If you’re looking for more money in your budget today, you can refinance your student loans for a longer period of time spreading out your payments can help you reduce your monthly bill.
Your current interest rate is greater than 4%
If your private or federal student loans have an interest rates of 4% or higher, refinancing will likely save you money. Parents and people with grad-school loans can also save money by refinancing PLUS loans, which have higher interest rates than other federal student loans.
If income-based repayment options are not working for you
Federal income-driven repayment plans can be an effective way to lower your monthly payments. However, they can also make it harder to achieve progress because most of your monthly payment is applied to interest rather than principle. Lowering your interest rate can help you make a bigger dent in your balance faster.
If you dont qualify for student loan forgiveness
If you want to release a cosigner
Cd Loan Vs Personal Loan
While CD-secured loans can be convenient, there are reasons why you may want to consider an unsecured personal loan instead.
You dont have to put your savings or other assets on the line to borrow money, and you dont risk losing them if you default on a personal loan for some reason.
Next, you may be able to borrow more with a personal loan than you could with a CD-secured loan.
You may be able to find and get approved for an unsecured personal loan with an interest rate that is competitive with a CD loans. Lenders may consider:
How much you want to borrow
What the money will be used for
Your credit scores
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What Is The Difference Between Student Loan Consolidation And Student Loan Refinancing
Student loan consolidation is the process of combining federal student loans into one federal Direct Consolidation Loan. This gives you a fixed interest rate based on the weighted average of your current loans’ interest rates, and you won’t lose federal protections.
Student loan refinancing is the process of taking out a new loan with a different interest rate and different terms to pay off your existing loans. You can refinance both federal and private loans, but the process must be done with a private lender.
Should I Refinance Or Consolidate My Loans
You should consider refinancing if your finances are stable and youre able to qualify . Refinancing is best for borrowers who are looking to lower their interest rate, restructure their debt or combine multiple loans into one. Since refinancing is typically done through a private institution, you should only refinance federal loans if you dont need federal repayment plans or programs.
If youre looking to combine several federal student loans into one loan, consider direct loan consolidation. This federal option helps you simplify repayment and apply for a new repayment plan, but it wont result in a lower interest rate. Also check out direct loan consolidation if you want to combine your federal loans while maintaining access to federal repayment plans.
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Best Refinancing Marketplace: Credible
Credible is an online marketplace so you can compare your student loan refinancing options in one place.;
Need to contact lender for rates
Not for poor credit
Before refinancing your student loans, it’s wise to get rate quotes from several different lenders to ensure you get the best terms. While you can do that manually on your own, there’s a simpler way: you can go through a refinancing marketplace.
With Credible, you submit your information just once and get quotes from multiple lenders, without affecting your credit score. You can compare interest rates and loan terms from up to 10 top lenders and choose the best one for your needs. Once you choose a loan, you can complete your application online.
You can use Credible to get quotes to refinance federal loans, private loans, and even Parent PLUS loans.
Credible offers a best rate guarantee. If, after receiving prequalified options for student loan refinancing, you receive an offer for a better rate from a lender not on the Credible website and refinance with that lender at a lower rate, you’ll get a $200 Best Rate Reward .
The service is completely free to use. Instead of charging user fees, Credible makes money through referral commissions if you qualify for a loan through its website. Credible states that most of its lending partners look for a credit score of 670 to 700 for student loan refinancing.
Read the full review:Credible
Refinancing Your Student Loans
You may wish to consider refinancing your loans after a major life event, like getting a new job with a higher salary, because having a more stable financial picture may help you qualify for better rates or loan terms.
Having a solid debt-to-income ratio can also help make you more attractive to lenders or more likely to qualify for a lower interest rate. So if you have a higher salary, get a big bonus, or even if you pay off some other debts, your debt-to-income ratio might improve.
Similarly, if your credit score increases, you typically become more attractive to lenders.
Similarly, if your credit score increases, you typically become more attractive to lenders. For example, this could happen if you are using a small amount of your available credit, or if you find a mistake on your credit report.
When the Federal Reserve lowers short-term interest rates , it may become cheaper to borrow money from private lenders, who often respond to this by offering consumers lower interest rates as well. .
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Should You Refinance Your Student Loans
To decide whether or not to refinance your student loans, look at your current interest rates. If you have high-interest student loans, you could pay thousands in interest charges over the length of your loan. If you have good credit and stable income, you could refinance your debt and qualify for a lower interest rate, helping you save money.
Paying Off The Old Loan
When the funds are ready to be distributed, the borrower will need to designate where the funds will be sent. Some lenders will only send the money directly to the borrower, who then must turn around and pay off the loan. Other lenders may be willing to pay the old personal loan off directly. For a personal loan refinance, the latter is probably more ideal , so long as there arent any additional fees to do so.
Either way, its a good idea to follow up with the lender of the original personal loan to make sure that it is paid off in full. If your new lender is paying the old lender, they should send you a confirmation. If you do not receive a confirmation, check directly with the old lender to be certain that there are no loose ends to tie up.
Learn more about personal loans with SoFi.
- Mon-Thu 5:00 AM – 7:00 PM PT
- Fri-Sun 5:00 AM – 5:00 PM PT
Home Loans General Support:
- Mon-Fri 6:00 AM 6:00 PM PT
- Closed Saturday & Sunday
- Mon-Thu 8:00 AM 8:00 PM EST
- Fri 8:00 AM – 7:00 PM EST
- Closed Saturday & Sunday
- Mon-Thu 5:00 AM – 7:00 PM PT
- Fri-Sun 5:00 AM – 5:00 PM PT
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Loans Not Owned By The Department Of Education
If you have Federal Family Education Loan Program loans that are not held by the government, contact your servicer for details. Look for the most recent communication from the entity sending you bills.
If you have a Federal Perkins Loan that is not owned by the Education Department, contact the school where you received the loan for details. Your school may be the servicer for your loan.
If you have Health Education Assistance Loan Program loans and need to find your loan servicer, look for the most recent communication from the entity sending you bills.
Managing Your Student Loans Made Easy
With payment flexibility, no fees, and smart design, we are a loan servicer focused on you.
- Consolidate your private and federal loans
- Select autopay to never miss a loan payment
- Choose your preferred payment amount based on your budget
- Select biweekly or monthly payments
- Increase payment anytime to pay off loan faster
- Adjust your payment date anytime with ease
- Make extra or early payments without prepayment penalties
- Skip a payment and make it up later
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Requirements To Borrow From Sofi
To be eligible for refinancing with SoFi, you must:
- Be a U.S. citizen, permanent resident, or eligible visa holder
- Have graduated with an associates degree or higher from a Title IV school
- Provide proof of employment, such as pay stubs or tax returns
- Provide proof of residency, such as a utility bill
Learn More: When to Refinance Student Loans
Getting Better Overall Terms
Not all loans are created equal. Especially now that borrowers can access loans from a variety of lenders online and arent relegated to their local brick-and-mortar bank, they can afford to do their research and compare the terms, rates, fees, penalties, and customer service that different lenders are offering.
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Are There Any Downsides To Refinancing Student Loans
Refinancing federal student loans means you turn them private. As a result, you lose access to federal programs, such as income-driven repayment and Public Service Loan Forgiveness. You would also lose out on any new relief programs offered in the future, such as student loan forgiveness awarded en masse.
Some private lenders offer help if you run into financial hardship, but this varies by lender. If youre relying on federal protections, then you should not refinance your federal student loans. But if youre comfortable sacrificing these programs, refinancing could be a smart strategy for paying off your loans.
Check Rates And Terms With Multiple Lenders
Because student loan refinancing companies set their own rates and terms, it is important to do some shopping around. Not only will you want to get rate quotes, but you may also want to ask questions like the following:
;;-Are there other fees, such as origination fees?
;;-Is there a prepayment penalty if I want to pay my loan off early?
;;-Can the lender refinance both federal and private loans?
;;-Is there a forbearance program if I am laid off from my job?
;;-How do I access customer service?
;;-What is the loan application timeline?
If a company interests you, you can submit the information that you gathered from Step 1. With this information, the lender will likely run a soft credit check. This should not affect your credit score, but make sure the lender guarantees it wont.
If you meet a lenders eligibility requirements, theyll generally provide you with multiple offers, including offers with different term lengths and interest rates .
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Info Youll Need To Apply For An Auto Loan Refinance
When an individual applies to refinance with a new lender, there is typically a credit check of some kind. Each lender reviews specific borrower criteria, which varies from lender to lender, and influences the rate and terms an applicant may qualify for. For an auto loan refinance application, lenders typically require information that tells them the value of the car, the amount of the current loan and the applicants financial picture.
Compare Student Loan Refinancing Options
Before you decide, make sure to carefully compare CommonBond vs. SoFi. You can also look into other student loan refinancing options.
For example, an organization like Juno offers access to a number of;deals on student loan refinancing. Rather than just comparing two different student loan refinancing choices, you could see other deals and decide whether to take advantage of them. Before you settle on a student loan refinancing lender, consider joining Juno to see whats being offered by partners.
Different factors to keep in mind when you compare student loan refinancing options include:
- How much you can borrow
- Whether theres an origination fee
- Cosigner release
- Whether theres a hardship program
Start by considering what matters most to you, and what kinds of things youre looking for. If you dont need a cosigner to qualify for student loan refinancing, then a cosigner release wont be as important to you. For those with smaller student loan balances, having a big cap might not matter because you wont use it. Think about what features and benefits are likely to create the best deal for you and choose a lender that best fits your needs.
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How Sofi Student Loans Work
SoFi offers student loans for several types of degrees, including undergraduate, graduate, law school, and MBAs. The minimum you can take out is $5,000, with a maximum of up to 100% of the cost of attendance.;;
You need to meet the following qualifications to get a loan:
- Be a US citizen or permanent resident or visa holder
- Be at least 18 years old
- Be enrolled in a degree-granting school half-time or more
- Be making satisfactory academic progress as defined by your school
- Pass a credit check
- You or your cosigner need to be employed or have enough income from other sources
You can apply for a loan in as few as three minutes, and you’ll need to give the following information:;
- Social Security number
- Financial aid you expect to receive
- If you’ve had a previous private student loan with SoFi
Some borrowers may also need to provide proof of income or a government-issued ID.;
You can contact SoFi’s customer support by phone from Monday to Thursday, 5:00 a.m. to 7:00 p.m. PT, or from Friday to Sunday, 5:00 a.m. to 5:00 p.m. PT. You may also reach out to the company by mail, or tweet at them to get help.;
What To Know First:
Student loan refinancing companies help borrowers consolidate their student debts into a new loan. Refinancing is a good idea for people with a large monthly payment or a high interest rate, since refinancing into new terms can make loans more affordable in both the short- and long term. Borrowers with good credit, in particular, will qualify for the best rates and terms. You can refinance both federal and private student loans, though it’s usually best to avoid refinancing federal loans, since they come with a number of perks that aren’t available through private lenders.
To find the best student loan refinance company, there are a few factors you should consider, including interest rates, terms and fees. The lenders profiled below are a great place to start.
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