Refinancing student loans is the best way to take a breather from repaying student loans especially if you took out multiple student loans to cover your academic costs.
Student loan refinancing is quite different from student loan consolidation. It is important to note their differences before going ahead to make a choice.
What is Student Loan Refinancing?
Student Loan Refinancing involves the combination of several student loans into one loan with lower interest rates and an easy repayment plan.
Student loan consolidation has the same definition, however, with consolidation; you can only combine eligible federal student loans. Refinancing, on the other hand, allows you to combine both federal and private loans into a single loan with a private lender.
With consolidation, you do not get lower interest rates although you will get a better repayment plan. Refinancing provides you with lower interest rates and a better repayment plan making it a good option to go for.
Below we have listed the best student loan refinancing companies that offer the lowest interest rates and best repayment plans. Some of these companies accept borrowers with bad credit and provide loans amounts as high as $300,000
LendKey is a leading student loan refinancer. It has one of the best features among student loan refinancing companies which makes it a top choice.
First, it offers either fixed or variable APR loans for its loans. Fixed rates start as low as 3.64% up to 7.50% while variable rates start as low as 2.49% up to 7.41%.
LendKey offers a 5 – 20 years loan repayment period and 18 months of paused loan payment if the borrower falls into unexpected hardship like unemployment.
To qualify, you will need to have a minimum annual income of $24,000 and a good credit score well above 600. A good credit score will increase your chances of getting a lower interest rate. LendKey loan amount starts from $5,000 to school-certified cost of attendance.
Earnest is one of the popular choices. The company offers loans from $5,000 with APR at 3.50% – 7.89% for fixed rate and 2.49% – 7.27% for variable rate. The loan amount starts from $5,000 to school-certified cost of attendance.
The loan period is between 5 to 15 years with unemployment protection for a reasonable period.
To qualify, the borrower must be a U.S citizen or permanent resident, currently employed, and must have completed their undergraduate or graduate degree.
Earnest doesn’t charge any origination fees, prepayment fees or application fees. It also doesn’t set a minimum income requirement for qualification.
SoFi has one of the lowest rates with 3.69% – 8.07% for fixed rate and 2.49% – 6.65% for variable rate. SoFi offers refinancing loans for both undergraduate and graduate loans.
Its loan amount starts from $5,000 with a repayment period of 5 to 20 years. SoFi also offers unemployment protection and hardship options which allows you to pause loan payments until you are able to begin repayment.
SoFi doesn’t charge origination fees or prepayment fees. Also, it doesn’t request for a down payment before approving the loan.
4. Laurel Road
With Laurel Road, you get a fixed APR of 3.50% to 7.02% and a variable APR of 2.50% to 6.65%. Loan amount starts from $5,000 with no fixed maximum amount. Just like other student loan refinancing companies, you can take a loan for 5 to 20 years.
Laurel Road allows a 12-month pause loan repayment for qualified hardships like unpaid maternity leave or involuntary job loss. Loans are available for undergraduate and graduate loans.
Laurel Road offers various discounts including a 0.25% interest rate reduction with autopay via ACH. It does not charge any application fee, origination fee or prepayment fee.
Education Loan Finance is a subsidiary of SouthEast Bank. The student loan refinancing company has been providing students with life-saving loans since 2015 with one of the lowest interest rates you find on the market.
With APRs at 3.39 – 6.69% for fixed rate and 2.80 – 6.01% variable rate, it is certainly one of the best refinancers that help students save money and build back their credit score.
Education Loan Finance offers loans for a period of 5 to 20 years with loan amounts starting from $15,000. Unfortunately, it does not offer any form of discount but its low-interest rate should be good enough to save borrowers a lot of money.
The company does attach any form of fees to its loans and you wouldn’t be required to pay a prepayment, application or origination fee if you choose to go for this company. It also has a hardship option which allows borrowers to pause their payment during times of unemployment.
Splash Financial is a major lender that tops all other lenders on our list based on the loan amounts offered to borrowers.
With Splash Financial, you can get between $75,000 to $300,000, however, the approved loan amount will depend on your credit score and credit history. Loans are repayable between 5 to 15 years with a comfortable repayment plan.
Its loans are available to undergraduate and graduate degree holders. Splash Financial doesn’t offer any discounts. Also, it doesn’t charge any origination fees or application fees.
During hardship, you have an option to pause your loan repayment for a limited time until you are able to get back to your feet.
7. Common Bond
Common Bond provides 3 APRs for customers to pick from. Its variable APR is at 2.49% – 7.11% while it’s fixed APR is at 3.89% – 8.07% and its hybrid APR is 4.35% to 6.30%. It offers a 0.25% interest rate reduction with autopay via ACH.
Loans are available for undergraduate and graduate degree holders. It also offers unemployment protection for a limited time.
Common Bond goes a step further by helping eligible graduates find new jobs and offering them short-time consulting projects if they remain out of a job for a certain period of time.
Just like many other student loan refinancing companies in our list, it does not charge origination and application fees.
The companies listed above are among the most popular student refinancing companies. They are also considered to be the best by many customer reviews citing their transparency and strive to help borrowers get out of debt as a good reason to try them out.