Find the Best Student Loan Refinance Options
Explore our list below and find the right fit for you
In 2020, student loan debt in America is worth a whopping $1.56 trillion. Much of this debt is because people let their loans get out of hand. But that makes sense.
It can feel quite overwhelming when you’re trying to get a handle on your student debt. You have to deal with different balances, payments, loan servicers, and rates. And while you may be able to make your student debt more manageable and streamlined with student loan consolations, you can save more money by going with a private student loan refinance company.
To help you find the best student loan refinancing company for your situation, we’ve compiled a list of our top lenders with helpful features, borrower protections, low rates, and more. So continue reading to see our top choices for student loan refinance companies of 2020.
If you refinance a student loan and then experience sudden financial hardship or a major life change that could complicate your repayment, Discover has several safeguards in place to help you out.
With Discover’s deferment, your payments could be paused for years at a time which could allow you to go back to school, work at a public service organization, serving in the military, or finish your healthcare residency.
With forbearance, you can suspend your payments for up to one year in the cases of excessive student loan burdens, a medical disability, unemployment, or some other financial hardship. You can also get a reduced payment option from Discover that will drop your monthly payments to $50 for up to six months.
There are only two student loan refinancing terms that are offered by Discover. You will have to choose between a ten-year or twenty-year repayment period. It also has fixed and variable rates for refinanced loans.
Fixed rates range from 3.99% APR to 6.99% APR while variable rates range from 3.99% APR to 7.24% APR. This is assuming you signed up with autopay and received the 0.25% discount.
You can also refinance your student loans while you’re still in school. However, there is no co-signer release option.
For some people, they might desire to refinance their student loans to get a monthly payment that fits their budget, without having to have their repayments go on for too long. Lenders that offer more loan terms can help you find the best match to your pay-off goals as well as your budget.
The refinancing options from College Ave include sixteen different loan terms. These options range from five years to twenty years for loans between $5,000 and $300,000.
They also offer competitive rates. Fixed rates are from 4.64% APR to 8.99% APR while variable ones go from 3.64% APR to 8.99% APR (after signing up for autopay and getting the 0.25% discount rate).
The higher $300,000 refinance limit is for pharmacy, veterinary, medical, and dental degrees. It’s also important to know that they have a very strict co-signer release option.
You’ll get some of the lowest rates on refinancing loans when you refinance with CommonBond. The company offers variable rates that range from 1.75% APR to 5.85% APR. They also offer fixed rates from 3.10% APR to 6.15% APR.
You may also be able to get a “hybrid rate” when you use CommonBond. With a hybrid rate, you’ll get variable rates for the first five years, and then it will switch to a fixed rate for the next five years. The hybrid rates go from 4.35% APR to 6.25% APR.
All of these rates reflect what you could qualify for after you sign up for autopay and then receive the 0.25% rate discount.
CommonBond also has a forbearance period of up to 24 months, which is one of the longest forbearance periods around. It also allows co-signers and even gives you an option to let go of the co-signers after you make 36 on-time payments.
Unfortunately, you’re not eligible for student loan refinancing with CommonBond if you didn’t graduate. You also can’t get refinancing if you live in Mississippi or Nevada.
With Earnest, you’ll get some good features and also competitive interest rates. Their fixed rates range from 3.75% APR and 8.75% APR while their variable rates from 3.50% APR to 8.70% APR. Those rates are for when you sign up with autopay and then receive the 0.25% discount rate.
It’s also fairly flexible when it comes to paying loans between $5,000 and $500,000 with Earnest. You’ll have the option to make monthly or biweekly payments. You can also customize your loan term between five and twenty years.
You also can request to skip a payment once every year. Or, you can choose to apply for up to twelve months of forbearance if you happen to be undergoing some kind of financial hardship.
There’s also a parent PLUS refinancing option and Earnest matches the current grace period deferment, up to nine months. They also offer deferment for people who are going to grad school.
Unfortunately, with Earnest, you need to complete your degree by the end of the semester to refinance. They also don’t accept co-signers when it comes to student loan refinancing. And you won’t have the ability to transfer ownership of your student loan.
Student loan refinancing by Earnest also isn’t available in Rhode Island, Kentucky, Alabama, Nevada, and Delaware.
Perhaps the biggest reason to go with Citizens Bank for student loan refinancing is that they don’t require you to have graduated to be eligible. Most other refinancing companies do require that you have a degree.
To be eligible to get refinancing through Citizens Bank without having a degree, you must have already made twelve payments on your student loans.
You can also get forbearance for up to twelve months when you’re going through financial difficulties. If you choose to go back to school and finish your degree, then you’ll be able to qualify for in-school deferment on your refinanced student loan debt.
At Citizens Bank, loan amounts range from $10,000 to $500,000, and their terms are from five to twenty years.
The variable rates for the student loans at Citizens Bank range from 2.70% APR to 8.75% APR. Their fixed rates range between 3.79% APR to 8.98% APR. And those rates are available after you sign up for autopay and receive the 0.25% discount.
You also can add a co-signer. Unfortunately, there’s no option to transfer parent student loans to the child.
For people who have recently received a professional degree, or for current graduate students, SoFi is probably the best option in terms of student loan refinancing. There is no official limit on how much this lender can refinance, so long as the loan is more than $5,000. This makes it an attractive option for people who want to refinance large student loan balances.
SoFi offers fixed rates from 4.25% APR to 8.77% APR while their variable rates go from 3.50% APR to 8.70% APR. As with the other rates, this is assuming you signed up for autopay and have received the 0.25% discount. The loan terms with SoFi range from five years to twenty years.
This company also has a refinancing option specifically for dental and medical school graduates. That option sets monthly payments at only $100 during residency. The variable rates here range from 3.75% APR to 8.24% APR and fixed rates range from 4.50% APR to 8.24% APR (with the 0.25% discount).
You also can add a co-signer and there are complimentary member benefits like unemployment protection and career coaching. Unfortunately, you don’t get any co-signer release for refinanced student loans from SoFi.
Co-signers or parents who have debt for a student’s education may be curious about how student loan refinancing could work for them. Luckily for them, PenFed Credit Union can provide some flexible tools that could perfectly suit co-signers and parents.
When you’re refinancing parent student loans, you can decide to leave those loans in your name or transfer the ownership of the loans to the student for whom you borrowed those loans. PenFed also accepts applications with a co-signer, and they’ll even consider co-signer release after only twelve months of consecutive, on-time payments, which is one of the shortest periods of any refinancing company.
You’ll also receive competitive interest rates. The fixed rates are from 3.23% APR to 5.53% APR while the variable rates range from 2.23% APR to 6.97% APR. Loan terms are between five and fifteen years and loan amounts range from $7,500 to $300,000.
With PenFed, you can also refinance student loans with a spouse. To be a co-signer, you need to earn at least $42,000 per year to qualify.
There is also no standard deferment or forbearance policy. Instead, it goes by a case-by-case basis only. You also need to become a PenFed member to apply for refinancing.
For married couples who are looking to manage their student debt together, Splash Financial might be the best refinancing option for you. Splash works with other lenders as a way to help you find offers for student loan refinancing. This includes an option to combine your student loan debt with your spouses into a single refinanced student loan.
You can also choose to transfer the ownership of the student loan from one spouse to another, as well. The student loan refinance rates that are offered via Splash are fairly competitive, also. The variable rates range from 1.99% APR to 7.53% APR while the fixed rates are between 3.20% APR and 7.02% APR (after you sign up for autopay and get the rate discount of 0.25%).
Dental and medical school refinancing options are also available with Splash Financial. Unfortunately, borrower protections like deferment and forbearance will vary based on the lending partner. And some credit unions may require that you become a member to qualify.
The Importance of Knowing About Student Loan Refinance Companies of 2020
There is a lot of student loan refinance companies out there. But when you’re dealing with student loans, you want to make sure that you’re doing everything with the right company for your situation. If you don’t, you could end up facing some unfortunate financial consequences later on.
Make sure that you take the costs of refinancing into consideration. Collect rate quotes from several lenders and compare them to your current rates. Also, look at the benefits that are offered and see which ones best fit your needs and lifestyle.
Frequently Asked Questions
Learn the student refinance basics
What is student loan refinancing?
Before we get into some student loan refinance companies of 2020, let’s first go over what student loan refinancing is.
Borrowers tend to refinance debt like home mortgages and car loans. Student loan refinancing works in a similar way. When you go through student loan refinancing, you’ll apply for a loan with a private lender.
That lender will then pay off your existing loans and replace them with a new one. When you decide to refinance your student debt, you can adjust or change the terms of your loans.
Most people choose student loan refinancing as a way to replace their high-interest debt like private student loans or Direct PLUS loans. If you have good credit, income, and other financial positives, then a lender might approve you for student loan refinance rates that are lower than the ones you’re paying now.
There are other benefits to student loan refinancing too. You may decide to transfer the ownership of your student loans, such as refinancing parent PLUS loans to the student. Or, you may choose to refinance to take a co-signer off of a private student loan.
You can also use refinancing as a way to get lower monthly payments, change your lender, or combine student debt into a single loan.
Should you refinance your student loans?
If there’s one hot financial topic it has to be the subject of student debt. For those that have student loans, you are constantly worrying about how to manage your payments and save for a better future. The average monthly payment is about $400 a month, leaving many borrowers with little cash for saving because of student loan debt.
“Should I refinance my student loans?”
That’s a question many borrowers ask, but they often don’t recognize some of the details and consequences of refinancing until it’s too late.
If you want to know if you should refinance your student loan or not, read on to learn if you can refinance and whether it’s a smart financial choice or not.
Can you refinance your student loans?
Many people wonder if it is even possible to refinance student loans. Yes, you can refinance student loans, even those that are federal student loans.
However, you don’t refinance them in a way that you would normally refinance a loan. It’s considered to be student loan consolidation because you’re taking it to a private lender. In other words, your private lender pays your remaining balance of federal student loans.
Your loan is similar to personal loans because you have a single loan with a private lender. You then repay the bank according to the loan repayment terms.
If your loan is through a private lender, you shouldn’t have problems refinancing your loan, as long as your credit is good, and you have a strong credit history.
You can refinance student loans as often as you need to. Sometimes, though there can be too much of a good thing. You want to make sure that you can still receive a lower interest rate and lower monthly payment.
How can you refinance student loans?
Lenders will look at two primary factors to assess your ability to pay the loan back once you submit a loan application. The first is your credit score and passing a credit check. The second factor is your debt to income ratio.
You’ll need to check your credit report before you apply for a loan. This will give you an idea as to where you stand and you can make improvements to your score before you apply for student loan refinancing.
For example, you can pull your credit report and find that your credit utilization rate is high. If that’s the case, you can focus your attention on getting a lowering that rate and existing debt payments. That will raise your credit score and improve your chances to get approved.
A good credit score will also determine your interest rate. A poor credit score can result in a high-interest rate and completely defeat the purpose of refinancing.
If you get turned down for a loan because your credit score is subpar or you just don’t have the income, you can explore the possibility of having a cosigner on the loan.
A cosigner can be a friend, parent, or another relative that has the credit score and income qualifications to get approved for the loan.
When you have a cosigner on a loan, you are responsible for making the on-time payments each month. If you miss a payment, your co-signer becomes responsible for the student loan payments. You’ll have to work hard to repair that relationship and pay them back.
When does student loan refinancing make sense?
Are you still wondering, “Should I refinance my student loan?”
Student loan refinancing isn’t for everyone. There are some general guidelines to follow to know if refinancing a student loan is right for you.
Do you have a federal student loan and are on a repayment plan, such as Public Service Forgiveness or Income-Driven Repayment?
When you refinance a student loan, you are leaving the federal student loan system. These repayment programs go away as private lenders don’t offer them, including student loan forgiveness.
You also have to look at the interest rate of the loans you have. Banks will determine your interest rate based on your credit score. With federal loans, interest rates are set by Congress in July of each year.
In some cases, you can refinance a student loan with a lower interest rate and better repayment terms. If you find that you come out ahead and can meet the monthly payment without a problem, refinancing would make sense. It may make sense if you decide to buy a home and want to qualify for a mortgage.
Another factor to examine is the life of the loan and the total loan amount of the new loan. It’s tempting to just look at the monthly payment and go with it because you save money each month.
You may find that you’re paying much more in interest to the bank because the repayment terms are much longer than what you currently have.
Should I refinance my student loans?
Can I refinance my student loans? Should I refinance my student loans? These are common questions borrowers ask to lighten the load of student loan payments.
It is possible to refinance student loans. Whether or not you should refinance depends on several factors. You have to look at the type of loan you have, the interest rate of your current loan, and the repayment options when refinancing.
Do you want more financial tips? Read this article to discover other ways to lower your bills.
What are student loans?
The world of student loans can be incredibly complicated and confusing. There are various types of loans, different loan terms, and interest rates.
Before we get into refinancing student loans, let’s review some of the basics around student loans.
There are two main types of student loans. There are federal student loans, which you get directly through the federal government and the Department of Education. There are private student loans, which are funded through banks, credit unions, and other private lenders.
There are also subsidized and unsubsidized loans. With subsidized loans, interest doesn’t build up on the loan while you’re in school or if you have to defer payments.
Unsubsidized loans are loans where the interest accrues on the loan while you’re in school and out of school, whether you’re on a payment plan or not.
All of these things come into play when you decide to refinance your student loan or not. You should know who your lender is and whether or not your loans are subsidized or not. You should also see if you have a variable interest rate or fixed interest rate.
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