5 banks that refinance student loans
Student loan refinance offers an opportunity to lower your interest rate, gain more flexibility with your monthly payments, and more. However, before you apply to a lender, it’s important to shop around and compare multiple offers.
As you search, you will come across banks, credit unions, and online lenders that offer refinance loans. There are a few 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 at the bank, and you can also benefit from the convenience of a local branch for personal help.
What is Student Loan Refinance?
Student loan refinancing is the process of replacing one or more existing student loans with a new loan through a private lender. Refinancing may come with certain benefits, including the opportunity to receive a lower interest rate, but refinancing federal student loans will result in you losing access to the benefits offered by the US Department of Education.
Therefore, it is important 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 personal 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 help you find one.
Citizens Bank is one of a few student loan refinancing companies that can help you refinance your debt even if you don’t have a degree. The bank offers loans ranging from $10,000 to $750,000 (the limit is $300,000 for bachelor’s degrees and under).
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 interest rates. In addition to an autopay rebate, Citizens Bank offers a 0.25 percent interest rebate if you or your co-signer have a qualifying bank account with the lender at the time of application.
Citizens Bank doesn’t specify a minimum credit rating, but says you need good credit. You must also have an annual income of at least $24,000 and not have a history of defaulting on your student loans. The exemption period for Citizens Bank co-signers is also relatively long at 36 months.
SoFi originally started out purely as a student loan refinance company, but in early 2022 it received federal regulators’ approval to become a national bank. The online bank offers loans starting at $5,000 with no upper limit. The repayment periods 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 financing process. However, what really sets SoFi apart from other lenders are its member benefits. You’ll get interest rebates on other SoFi loans, a 10 percent discount on an estate plan, career resources, an unemployment protection program, and more.
You can refinance with SoFi if you have at least an associate degree, but the lender does not publicly disclose minimum loan or income requirements. You are also not eligible if your loans were taken for law school or residency.
PNC Bank’s student loan refinance program may be worth considering if you don’t have a lot of debt, don’t have a degree, or are unlikely to qualify for the best interest rates on the market.
PNC Bank’s lowest interest rates aren’t as impressive as those of other top student loan refinancers. However, the interest rate cap is quite low. You can also qualify for a 0.5 percent discount on your interest rate when you set up automatic payments. The autopay rebate isn’t unique, but most lenders only offer 0.25 percent.
The lender doesn’t provide specific eligibility criteria, but if you need a co-signer to be approved, you can release them from their obligation after making 48 consecutive on-time payments and passing a credit check — a much longer wait than other lenders .
Laurel Road is an online banking brand for KeyBank with student refinance loans from $5,000 up to your entire outstanding loan balance. The repayment periods are five, seven, 10, 15 and 20 years.
Lender interest rates are competitive, and you may qualify for a rebate if you have a Laurel Road checking account and meet direct deposit and savings requirements. This is in addition to the 0.25 percent autopay discount.
You must have an associate degree or higher to qualify. And if you have an associate degree, you must have a degree in a healthcare field.
Education Loan Funding
Education Loan Finance (ELFI) is SouthEast Bank’s student loan refinancing division. The minimum loan amount is a little high at $15,000, although the limit varies by eligibility. Repayment terms include five, seven, 10, 15, and 20 years, with parents limited to a 10-year repayment period. The lender offers competitive fixed and variable interest rates.
ELFI has some disadvantages. 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 regarding its eligibility criteria. To qualify, you must have a minimum income of $35,000, a credit score of at least 680, and a credit history of at least 36 months.
Pros and cons of refinancing student loans with a bank
If you are thinking of refinancing your student loan with a bank, you should consider the pros and cons.
- Some discounts for existing customers.
- Possibly more personalized terms.
- Network of branches for personal help.
- Often higher interest rates.
- May not offer the unique benefits of online lenders.
How to get refinance from a bank
To refinance student loans with a bank, you go through a process similar to that of an online lender:
- Shopping spree. You start by comparing interest rates from multiple companies, which should include both banks and other types of lenders. Most student loan refinance companies allow you to get an interest rate quote with just a gentle credit check, making the comparison process easy and risk-free.
- Apply online. Once you have decided on a lender, apply directly through their website. You must provide information about yourself, your school, and your student loans. Once you submit your application, the lender will run a credit check and ask you to provide some documentation such as pay slips and a copy of your driver’s license.
- Accept the loan. When the lender approves your loan, you will receive a final offer, which may or may not match the original offer. At this point you can decide whether or not to accept the loan. If you don’t do this, you can repeat the process with other lenders, but if you want to proceed with that particular lender, read the agreement and sign the documents. The lender will repay your existing loans directly, but you must continue to make payments until this is confirmed.