Best Student Loan Refinance Companies 2023: Top 5 Picks & Reviews
If you’re looking to save money, student loan refinancing may be a good option. Student loans are funds borrowed to pay for educational expenses, such as tuition, room and board, textbooks, and other related costs. They are repaid with interest. Student loan refinancing is the process of taking out a new loan to pay off existing student loans. This allows borrowers to potentially obtain a lower interest rate, reduce their monthly payments, or change their repayment terms, which can save them money over the life of their loans. Student loan refinancing can be a good option for borrowers who have high-interest rates, want to lower their monthly payments, have a strong credit score and steady income, or want to consolidate multiple loans into one. It’s important to carefully consider the pros and cons before deciding on student loan refinancing. Student loan consolidation is the process of combining many federal student loans into one loan with a single monthly payment and interest rate. Consolidating into one student loan may be beneficial for borrowers who want to simplify their repayment process by combining multiple federal student loans or private student loans into one single payment. Both refinancing and student loan consolidation may take away your eligibility for student loan forgiveness.
Many student loans refinance lenders offer variable-rate loans, which is another way to save during the loan terms. Lenders include traditional banks, credit unions, and non-traditional student loan refinancing lenders. When refinancing private student loans, you’ll need a non-federal student loan refinancing company.
Read More: Best Ways To Pay Off Student Loans Fast 2023
5 Best Student Loan Refinance Companies 2023
- LendKey: Best Overall
- SoFi: Best for Banks to refinance student loans
- Citizens: Best for non-graduates
- College Ave: Best for repayment options
- PNC Bank: Best bank lender
How Do Student Loan Refinancing Procedures Work?
Student loan refinancing works by obtaining a new loan from a private lender to pay off one or more existing federal student loans or private student loans. Ideally, the new loan will have a lower interest rate or different terms, such as a longer repayment period, which may make it easier to repay student loan debt. Once the new loan is disbursed, the borrower uses the funds to pay off older federal or private student loans and then makes student loan payments on the new loan according to the new terms. Refinancing is usually available for both federal and private student loans, but refinancing federal loans will convert them into private loans, meaning borrowers will lose certain benefits such as income-driven student loan debt repayment plans and loan forgiveness programs.
Is It Best To Refinance A Student Loan?
Whether or not it’s best to refinance student loans depends on individual circumstances. Refinancing can be a good option for borrowers who have high-interest rates, want to lower their monthly payment, have a strong credit score and steady income, or want to consolidate multiple loans into one. However, refinancing federal loans will convert them into a private loan, meaning borrowers will lose certain benefits such as income-driven repayment plans and loan forgiveness programs. It’s important to carefully consider the pros and cons before deciding to refinance or to take on a direct consolidation loan. Most refi companies require a minimum credit score for approval to refinance federal student loans, and some will require a co-signer. Refinancing may affect your credit score because most student loan refinancing lender companies will do a credit check. However, this will have less of an effect than late or missed payments.
Top 5 Best Student Loan Refinance Companies May 2023
LendKey
LendKey’s best feature is its ability to connect borrowers with a community bank or credit union, offering competitive rates and personalized service. Additionally, LendKey offers a streamlined application process and a single, convenient monthly payment for borrowers who have consolidated their loans through their platform.
- Fixed and variable rates
- No application fees
- Co-signer not required
- Interest rate estimates only for refinancing
- Late fees
- Insufficient funds fees
LendKey is a student loan refinance company that partners with community banks and credit unions to offer student loans to borrowers. The platform provides a way for borrowers to compare and choose between various loan options from different lenders, making the process of finding a loan easier and more streamlined. LendKey offers both fixed and variable-rate loans with flexible repayment terms, and borrowers can apply online in a few minutes. In addition to student loans, LendKey also offers refinancing options for existing student loans, as well as personal loans for a range of purposes, including debt consolidation, home improvement, and other personal expenses. LendKey is a student loan marketplace.
SoFi
SoFi’s best feature is its comprehensive range of financial products and services, coupled with its community-based approach to finance. SoFi also offers competitive rates and flexible repayment options, as well as access to exclusive member benefits and career resources.
- Interest estimate
- Refinance beginning with an Associate’s Degree
- Career Coaching
- No co-signer release
- Late fees
- 15+ year maximum loan term
SoFi, short for Social Finance, is a financial technology company that offers a range of products and services, including personal loans, home loans, investment management, and student loan refinancing. The company was founded in 2011 and has since expanded its offerings to include banking and insurance products. SoFi’s mission is to help people achieve financial independence and success through its innovative products and community-focused approach. SoFi has grown rapidly over the years and has become a popular choice for people looking for alternative financial solutions. SoFi is a student loan marketplace.
Citizens
Citizens Bank’s best feature is its wide range of financial products and services, coupled with its large branch and ATM network, making banking more accessible to customers. Citizens also offer a range of discounts and benefits for eligible borrowers.
- Interest estimate
- No degree required
- 0.50% Interest discount for existing customers
- No forbearance limit
- 15+ year maximum loan term
Citizens Bank is a commercial bank that provides a range of financial products and services to individuals, businesses, and institutions. The bank offers personal and business banking, lending, and investment services, as well as wealth management and insurance products. Citizens was founded in 1828 and is headquartered in Providence, Rhode Island. The bank has more than 1,000 branches and 2,700 ATMs across the United States, and it also operates online and mobile banking platforms. Citizens Bank is committed to helping its customers achieve their financial goals and providing excellent customer service.
College Ave
College Ave’s best feature is its user-friendly platform and customizable loan options, making the student loan process simpler and more personalized. College Ave also offers a range of student loan options, including undergraduate, graduate, and parent loans, with competitive interest rates and flexible repayment options. Additionally, College Ave provides resources and tools to help borrowers make informed financial decisions.
- Soft credit check prequalify
- Flexible repayment options
- Co-signer release for private loans
- Late fees
- The graduation requirement for refinancing
- Repayment terms for co-signer release
College Ave is a private student loan lender that provides undergraduate, graduate, and parent student loans for higher education expenses. The lender offers competitive interest rates, flexible repayment terms, and no application, origination, or prepayment fees. College Ave also offers a variety of online tools and resources to help students and families make informed decisions about their student loans. The company was founded in 2014 and is based in Wilmington, Delaware. College Ave is committed to making the student loan process easier and more transparent for borrowers.
PNC Bank
One of the best things about PNC Bank is its comprehensive suite of banking and financial services, which includes student loans, savings and checking accounts, credit cards, mortgages, and investment products. PNC Bank also offers competitive rates and flexible repayment options on its student loans, as well as a variety of discounts and rewards programs for eligible borrowers. Additionally, PNC Bank has a large network of branches and ATMs, making it convenient for customers to access their accounts and manage their finances.
- 0.50% interest rate discount for auto-payments
- No degree required
- Savings account access
- No interest rate estimate
- Co-signer release period longer than competitors
PNC Bank is a financial services company that will provide credit qualified borrowers, attractive loan terms for most credit qualified borrowers. They provide a range of banking products and services to individuals, businesses, and institutions. The bank offers personal and business banking, lending, and investment services, as well as wealth management and insurance products. PNC Bank was founded in 1852 and is headquartered in Pittsburgh, Pennsylvania. The bank has more than 2,400 branches and 9,000 ATMs across 20 states and the District of Columbia, and it also operates online and mobile banking platforms. PNC Bank is committed to providing exceptional customer service and innovative financial solutions to help its customers achieve their financial goals.
How To Refinance Student Loans?
To refinance student loans, borrowers should research and compare offers from different lenders, consider their credit score and financial situation, and choose a lender that offers the best terms and rates for their needs. The application process typically involves submitting financial information and undergoing a credit check, and borrowers may need a co-signer to qualify for a lower rate.
Do Refinanced Student Loans Qualify For Forgiveness?
No, refinanced loans are private loans and do not qualify for federal loan forgiveness programs such as Public Service Loan Forgiveness or repayment plans.
What Are The Risks Of Refinancing Student Loans?
Refinancing student loans may save money but refinance loans carry certain risks, such as losing federal loan benefits like income-driven repayment plans and loan forgiveness, potential for higher interest rates and fees, and the loss of deferment or forbearance options in case of financial hardship. Additionally, borrowers may need a co-signer to qualify for a lower interest rate, which could put their co-signer at risk if they are unable to repay the loan. However, most private student loan refinancing will result in lower loan payments, student loan refinance rates are typically lower than first loans, but most will result in lost eligibility for student loan forgiveness programs.
How To Get The Lowest Refinance Rate For Student Loans?
To get the lowest student loan refinancing rates, borrowers should shop around, compare offers from different lenders, improve their credit score, and consider getting a co-signer.
You can calculate your student loans with this tool:
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How To Refinance Your Student Loan In 5 Steps?
Here are five steps to refinance student loans:
- Research and compare lenders to find the best rates and terms.
- Gather and review your financial information and credit score.
- Submit an application and undergo a credit check.
- Choose a lender and loan option that meets your needs.
- After approval, use the new loan to pay off your old loans and start making payments according to the new terms.
Final Thoughts
Student loan refinancing companies offer competitive rates, flexible terms, and user-friendly online platforms. Refinancing lenders offer loans to pay off existing debt. Refinancing can affect credit history as it involves applying for a new loan, which may result in a hard inquiry on the borrower’s credit report. However, if the borrower makes timely payments on the new loan, it can also help to improve their credit score over time. Some of the top options include SoFi, Citizens Bank, LendKey, PNC Bank and College Ave. A credit union may also offer student loan refinance. Borrowers should compare offers from multiple lenders and carefully consider the pros and cons before refinancing.
Frequently Asked Questions (FAQs)
Consider refinancing student loans if you can get a lower interest rate, shorten the loan term, or lower monthly payments.
Variable-rate loans have interest rates that can change over time based on market conditions, causing payments to fluctuate. Variable rates can be good if rates remain low, but they can also increase and lead to higher payments.
Student loan consolidation combines multiple federal loans into one loan with a fixed interest rate, simplifying repayment with a single monthly payment.
Student loan refinancing is the process of taking out a new loan to pay off one or more existing student loans, potentially at a lower interest rate.
Refinanced and consolidated loans are generally not eligible for federal loan forgiveness programs, but may qualify for private lender forgiveness options. Check with your lender to determine eligibility options.
Loan terms refer to the specific conditions and details of a loan agreement between federal and private lenders and a borrower. Loan terms outline the various aspects of the loan, including the amount of money borrowed, the interest rate, the repayment schedule, and any fees or penalties associated with the loan. Terms include variable and fixed rates for interest, any private or federal benefits, terms of repayment for multiple student loans, interest payments, variable interest rates and fixed rates, origination fees, and any federal student loan benefits. Loan terms can vary depending on the type of loan, the lender, and the borrower’s creditworthiness. It’s important to carefully review the loan terms before agreeing to a loan to ensure that you understand the terms and are able to meet the repayment requirements.
Federal benefits for student loans include federal student loan payment plans that can help borrowers make their monthly payments more manageable based on their income and family size. These plans include Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR). Most do not require a credit history check and allow co-signers or parent loans. Instead of a variable interest rate, federal loans are fixed; private student loan lenders may offer either a fixed or variable interest rate for loans. Both may charge origination fees.
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