If you’re burdened with student loans, you may be considering refinancing options. Whether you want to lower your interest rates, switch to a fixed-rate loan, or change your payment term, student loan refinancing can be a viable solution. In this article, we’ll explore the best student loan refinance companies of March 2024, providing you with valuable insights to make an informed decision.
The Best Private Student Loan Refinance Companies of 2024
- Earnest Student Loan Refinancing
- SoFi Student Loan Refinancing
- PenFed Student Loan Refinancing
- Laurel Road Student Loan Refinancing
- Splash Financial Student Loan Refinancing
- Citizens Bank Student Loan Refinancing
- LendKey Student Loan Marketplace
- College Ave Student Loan Refinancing
If you’re considering refinancing your student loans, it’s important to be cautious, especially if you have federal loans. Switching to private loans might cause you to lose key protections, repayment options, and forgiveness programs. Before jumping into refinancing, evaluate if it’s the right choice for you. If you decide to pursue refinancing with a private lender, here are some of the best companies to begin your search.
Earnest Student Loan Refinancing
Earnest stands out for its competitive starting rates. If you have excellent credit, this lender could be a great option for you. Additionally, Earnest offers a unique perk with its refinanced loans: the ability to skip one payment each year. This feature allows you to request a payment skip after making at least six months of consecutive on-time payments. However, interest will accrue during this period, and the loan’s final payoff date will be extended.
Keep in mind that Earnest doesn’t disclose its maximum interest rates, so if you have a less-than-perfect credit history, you might end up paying more interest than expected. Overall, Earnest is a solid choice for refinancing student loans.
SoFi Student Loan Refinancing
SoFi stands out with its unemployment protection feature. Eligible borrowers can suspend loan payments for up to 12 months if they lose their job through no fault of their own. SoFi also offers job payment assistance during the forbearance period. However, it’s important to note that interest will continue to accrue during this time and will be added to the loan’s principal.
One thing to be aware of is that SoFi uses a third-party loan servicer, MOHELA, which might not be suitable for those who prefer a direct relationship with their lender. All in all, SoFi provides solid refinancing options, especially with its unemployment protection feature.
PenFed Student Loan Refinancing
PenFed offers the lowest maximum fixed refinance rates out of all the lenders mentioned. If you have poorer credit but still qualify for a PenFed refinanced loan, you might get a better deal here. To qualify for a loan, you need to be a member of the credit union. Membership is open to individuals who have served in the military or work at qualifying associations or organizations. Alternatively, you can join by opening a savings account with a minimum deposit of $5.
It’s worth mentioning that PenFed doesn’t offer variable-rate loans, which can have lower starting rates than fixed-rate loans. If you’re interested in a variable loan, PenFed might not be the best fit. However, if you’re looking for low fixed rates, PenFed is an excellent option to consider.
Laurel Road Student Loan Refinancing
Laurel Road offers some of the best fixed rates among all the reviewed lenders. However, it’s important to note that qualifying for the top rate is quite challenging, as only 11% of applicants qualified for it between July 2019 and June 2021. To receive an interest rate discount on your refinanced loan, you can sign up for a Laurel Road checking account.
One thing to be cautious of is Laurel Road’s late fee, which can amount to $38 or 5% of your payment, whichever is less. Falling behind on payments can increase the total cost of your loan. Overall, if you have excellent credit, Laurel Road offers competitive rates.
Splash Financial Student Loan Refinancing
Splash Financial operates as a student loan marketplace, allowing you to compare loan offers from multiple lenders in one place. This platform enables you to check your rates without affecting your credit score. However, since Splash Financial doesn’t underwrite its own loans, your experience may vary depending on the partner lender you choose.
Be aware that different lending partners might have varying terms and conditions. If you want the convenience of comparing multiple loan offers with one application, Splash Financial can be a suitable choice.
Citizens Bank Student Loan Refinancing
Citizens Bank stands out with its high loan limit, offering a maximum loan amount of $750,000, which is higher than any other lender on the list. As the only brick-and-mortar bank mentioned, Citizens Bank might be an attractive option for individuals who prefer traditional banking.
On the downside, Citizens Bank has a high minimum loan amount of $10,000, which might not be suitable for those with smaller debts. However, if you have a substantial amount of debt and prefer the stability of a traditional bank, Citizens Bank is worth considering.
LendKey Student Loan Marketplace
Similar to Splash Financial, LendKey is a student loan marketplace that allows you to compare loan offers from multiple lenders. LendKey differentiates itself by partnering with credit unions and community banks, providing a more personalized level of service. As with Splash Financial, checking your rates with LendKey won’t impact your credit score.
Keep in mind that LendKey has a lower maximum refinance amount compared to other lenders on the list. However, if you have a moderate amount of loan debt, LendKey can still be an excellent choice.
College Ave Student Loan Refinancing
College Ave offers flexibility with its repayment term lengths, offering 11 options to choose from. This lender stands out among others in terms of the variety of loan terms available. While many lenders limit your selection to four or five options, College Ave allows you to choose loan terms ranging from five to 15 years.
If you have a significant amount of debt, College Ave might not be the best choice since it has a lower maximum refinancing amount compared to other lenders. However, for the majority of borrowers, College Ave offers a great deal of flexibility in repayment options.
FAQs
Will refinancing my student loans hurt my credit score?
Refinancing student loans can temporarily impact your credit score. Lenders conduct a hard inquiry into your credit history, which can result in a slight decrease in your score. Additionally, refinancing involves closing your original loan and opening a new one, which affects your payment history. However, as you establish a new track record of reliable payments, your credit score will improve over time.
What documents do I need to refinance student loans?
While document requirements may vary depending on the lender, you will typically need the following:
- A statement verifying your current loan
- Proof of income
- Proof of residency
- Proof of graduation
- A government-issued ID
- Social security number
If you’re applying with a cosigner, you’ll also need to provide their information. Be sure to check with your chosen lender for their specific document requirements.
Student loan refinancing vs. consolidation: What’s the difference?
Student loan refinancing and consolidation are two distinct processes. Refinancing involves restructuring your existing loan or loans into a new loan with updated terms. This allows you to make a single monthly payment, combining both private and federal loans. However, refinancing federal loans with a private lender results in the loss of certain borrower protections.
Consolidation, on the other hand, involves combining multiple loans into one. After consolidation, you’ll make a single monthly payment, and the new interest rate is determined by taking the weighted average of your old loans’ rates. Consolidation can help simplify your repayment process, but it’s important to consider the potential loss of benefits associated with federal loans.
When should I refinance my student loans?
Refinancing your student loans can be beneficial if you can secure a lower interest rate and save money. However, it’s essential to consider the unique benefits of federal loans before refinancing them. Federal loans offer income-driven repayment plans, deferment, and forbearance options, which you would forfeit by refinancing with a private lender. Before making a decision, carefully assess all your options.
Which student loan refinancing lender is the most trustworthy?
To determine the trustworthiness of lenders, the Better Business Bureau (BBB) provides ratings based on factors such as responsiveness to consumer complaints, truthfulness in advertising, and transparency about business practices. Among the reviewed lenders, all receive A or higher ratings from the BBB, except for Splash Financial, which has a B+ rating due to eight filed complaints.
While a good BBB rating is a positive indicator, it’s wise to conduct further research by consulting family and friends or reading online customer reviews to assess others’ firsthand experiences.
Conclusion
When considering student loan refinancing, it’s crucial to evaluate your financial situation and determine if it aligns with your goals. The best student loan refinance companies of March 2024 offer competitive rates, unique features, and excellent customer experiences. By carefully examining the options provided in this article, you can make an informed decision that suits your needs. Remember to consider the benefits of federal loans and think long-term before refinancing.