The Best Banks To Refinance And Consolidate Student Loans - Make Lemonade

The Best Banks To Refinance And Consolidate Student Loans

By Make Lemonade Staff | Updated November 5, 2019

The decision to refinance your student loans is an important one. Make Lemonade can help you compare student loan consolidation companies and show you the best companies to refinance student loans.We evaluated the best student loan companies across multiple factors, including reputation, customer service, trust, execution, interest rates, fees, flexibility and many more considerations.

With student loan refinancing, you can refinance federal student loans, private student loans or both. When you refinance student loans, you exchange your current student loans for a new, single student loan with a lower interest rate. The goal of student loan refinancing is to save money and pay off student loans faster.

What are the best student loan refinance options? Let’s take a look.

Compare The Best Student Loan Refinance Rates For 2019

Lender
Rates (APR)
Minimum Credit Score

Overview

Variable Rates:1.81% - 6.49%
Fixed Rates:3.45% - 6.99%
Minimum Credit Score:650
Minimum Income:None
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5-20 years
Borrower Residency:All States except DE, KY, NV
Unemployment Protection:Yes
Co-signer Option:No

Overview

Variable Rates:2.39% - 6.01%
Fixed Rates:3.14% - 6.69%
Minimum Credit Score:680
Minimum Income:$35,000
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$15,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All States
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:1.99% - 6.65%
Fixed Rates:3.50% - 7.02%
Minimum Credit Score:660
Minimum Income:None
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:1.90% - 8.65%
Fixed Rates:3.49% - 7.75%
Minimum Credit Score:680
Minimum Income:$24,000
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states, except ME, ND, NV, RI, WV
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:1.81% - 5.98%
Fixed Rates:3.46% - 5.98%
Minimum Credit Score:650
Minimum Income:None
Fees:None

Details

Eligible Loans:Private or Federal
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20 years
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:2.25% - 6.65%
Fixed Rates:3.50% - 7.02%
Minimum Credit Score:660
Minimum Income:None
Fees:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5 - 20 years
Borrower Residency:All States
Unemployment Protection:Varies
Co-signer Option:Yes

Advertiser Disclosure

Here are the best student loan consolidation companies and best companies to refinance student loans:

Earnest

Earnest is one of the best companies to refinance student loans. As one of the best student loan consolidation companies, Earnest differentiates itself by allowing you to choose your own student loan interest rate and loan term. Earnest also offers industry-leading repayment flexibility on your student loans. With Earnest, you can choose your exact minimum monthly payment and increase your payment anytime to pay off student loans faster.

Earnest is free to refinance and allows you to refinance and consolidate both federal and private student loans, including for both undergraduate and graduate school loans, into a new, single student loan. You can also skip a student loan payment and make it up later.

Earnest looks beyond credit score to approve you for student loan refinancing, and will incorporate savings, education and earnings potential. Earnest services its own student loans, so Earnest will be your student loan servicer when you refinance student loans with Earnest.Parents with Parent PLUS Loans can also refinance Parent PLUS Loans with Earnest.

*Checking your rate does not affect your credit score.

SoFi

SoFi is one of the most recognizable student loan consolidation companies and one of the best companies to refinance student loans.

As one of the best student loan consolidation companies, SoFi positions itself as the “anti-bank” and has some of the lowest student loan refinance rates in the industry. In addition to student loan refinancing, SoFi offers its members several perks such as free career services, unemployment protection, customer support seven days a week, and free SoFi events.

SoFi offers free student loan refinancing and allows you to refinance and consolidate both federal and private student loans, including both undergraduate and graduate student loans.SoFi also offers unemployment protection, so if you lose your job, SoFi will temporarily pause your payments for up to 12 months.

Parents with Parent PLUS Loans can also refinance Parent PLUS Loans with SoFi.

*Checking your rate does not affect your credit score.

LendKey

LendKey compares offers from nearly 300 community banks and credit unions to find you the best student loan refinance rates. LendKey has no fees and enables you to refinance both federal and private student loans, including both undergraduate and graduate student loans.

LendKey offers one of the longest unemployment protection periods of all student loan refinance companies. LendKey enables you to pause payments for up to 18 months if you become unemployed.

Here’s another benefit when you refinance with LendKey: If you repay 10% of your student loan by the time your loan enters the full repayment period, LendKey will drop 1.0% APR from your current interest rate.

*Checking your rate does not affect your credit score.

Laurel Road

Laurel Road is a bank that offers student loan refinancing and parent PLUSLoan refinancing, including for both undergraduate and graduate school loans.

Laurel Road has no fees and refinances both federal and private student loans. If you are a parent and want to refinance student loans that you borrowed for your child’s college, Laurel Road permits parents to refinance Parent PLUS Loans in their child’s name.

Laurel Road may allow borrowers to pause their student loan payments for one or more three-month periods (up to 12 months) through a forbearance if they face economic hardship.

*Checking your rate does not affect your credit score.

Elfi

Elfi is one of the best student loans companies, and it’s backed by the SouthEast Bank. Elfi has no fees and enables you to refinance and consolidate both federal and private student loans, including both undergraduate graduate student loans. If you are a parent and want to refinance student loans that you borrowed for your child’s college, Elfi offers Parent PLUS Refinancing and refinancing for private loans.

Elfi allows you to pause your loan payments for up to 12 months if you face financial hardship or permanent disability. Elfi is a transparent lender who lists all rates, terms and monthly payments prominently on its website so you know exactly what you would pay with Elfi student loan refinancing.

*Checking your rate does not affect your credit score.

Splash

Splash is a new lender that works with banks and credit unions to refinance student loans. Splash has competitive rates and offers free student loan refinancing for federal and private student loans, including both undergraduate and graduate student loans. Parents with Parent PLUS Loans can also refinance Parent PLUS Loans with Splash.

*Checking your rate does not affect your credit score.

Student loan refinancing is the process of lowering the interest rate on your student loans. You can exchange your existing federal student loans, private student loans or both to receive a new student loan with a lower interest rate. There are many potential benefits when you refinance student loans, including saving money by having a lower interest rate. With student loan refinancing, you have flexibility to decide your student loan repayment term. You can pay off student loans in a shorter time period with a higher monthly payment, or you can choose a lower monthly payment and pay off student loans over a longer time period.

Student loan refinancing is empowering because it helps you take control of your student loans and decide your financial future. You can choose a new lender, choose a repayment term, select a fixed or variable interest rate, consolidate your federal student loans and private loan debt into one monthly payment, and simplify your student loan repayment with only one student loan servicer.

This student loan refinancing calculator can help calculate how much money you can save with student loan refinancing.

 

How do you get approved for student loan refinancing? Lenders prefer borrowers with a strong credit score (at least in the mid 600’s and preferably in the 700’s), stable and recurring income and a low debt-to-income ratio. If you don’t meet these requirements, you can always apply with a qualified co-signer, who can help you get approved and even get a lower interest rate.

One benefit of student loan refinancing is the ability to check your interest rate for free in two minutes before you apply. You can do this with multiple lenders to determine which lender offers the lowest interest rate. The lender will do a soft credit check to determine your interest rate, and this has no impact on your credit score.

Remember, when you refinance student loans, your new student loan will be a private student loan. This means that you no longer will have federal student loan if you choose to refinance federal student loans. When you refinance student loans, you won’t have access to income-driven repayment plans or federal programs such as public service loan forgiveness or teacher loan forgiveness. If you think these programs are beneficial to you, you could refinance private student loan debt and keep your federal student loans outstanding. You could consolidate federal student loans into a Direct Consolidation Loan. The benefit is to organize all your federal student loans into a single student loan. The downside is that a Direct Consolidation does not lower your interest rate, so you won’t save any money. The choice is yours, but if you want to lower your interest rate and save money, then student loan refinancing may be your best option.

Important Questions: Student Loan Refinancing

What is student loan refinancing?

Student loan refinancing is the process of receiving a lower interest rate on a new student loan and using your new loan to pay off your existing student loans.When you refinance student loans, a lender will both refinance and consolidate your student loans into a new, single student loan. This new loan will have monthly payment, one student loan servicer and one interest rate. Not only can you save money with student loan refinancing, but also student loan refinancing helps you manage your debt and simplifies your financial life by only having to make one monthly payment.

There are many advantages when you refinance student loans:

  • Lower your interest rate
  • Save money
  • Pay off student loans faster
  • Change your loan terms
  • Convert multiple student loans into a single student loan
  • Change lenders and student loan servicers for better customer service
  • Remove a co-signer from your student loans

You can check and compare the latest student loan refinancing rates to determine how much money you can save.

When should I refinance my student loans?

When to refinance student loans depends on several factors, including when you can get a lower interest rate compared to the interest rate on your current student loans. Generally, it makes financial sense to refinance student loans as possible so you can save money, pay off student loans faster and get out of debt more quickly.

Here’s an example of how student loan refinancing can help save you money. For example, let’s assume you have $50,000 of student loans at an 8% interest rate and a 10-year repayment term. If you can refinance your student loans and receive a 3% interest rate and a 10-year repayment term, you would save $124 per month and $14,860 total.

This student loan refinancing calculator shows you how much money you can save with student loan refinancing.

Here are some examples when to refinance student loans:

  • Your student loans have high interest rates
  • You have good credit and income
  • You already have private student loans
  • You want to change your loan terms
  • You want to change your lender or student loan servicer
  • You have variable interest rate loans
  • Anytime you want a lower rate
  • Anytime you want to save money

Here’s when you shouldn’t refinance student loans:

  • You want student loan forgiveness
  • You are unemployed or underemployed
  • You plan to enroll in an income-driven repayment plan
  • You defaulted on your student loans

How do I refinance my student loans?

You can refinancefederal student loans, private student loans or both. There is no limit to the number of times that you can refinance student loans so you can refinance each time you find a lower rate.

You can apply online to refinance student loans with banks, online lenders and credit unions. You should compare the best rates for student loan refinancing, and you can check your interest rate for free with as many lenders as possible. The process takes about two minutes and there is no impact to credit score.

When you are ready to apply, lenders will check your credit with a hard credit pull. The application takes about 10-15 minutes, and you can apply to multiple lenders at once to increase your chances of approval. The good news is that there are no fees to refinance student loans,and when you apply to multiple lenders in a short time period (such as a week), credit bureaus only count it as one credit inquiry.

How can I refinance my student loans?

When lenders refinance student loans, they want borrowers who have:

  • Good Credit: Lenders prefer to refinance student loans for borrowers who have at least a 650 credit score, and preferably a credit score in the 700’s or higher.
  • Good Income: Most lenders may require that you graduated and earned a degree before you refinance student loans. Most lenders will also expect that you are currently employed or have a written job offer, and your income is stable and recurring.
  • Low Debt-To-Income: Lenders also want to ensure that you can repay your refinanced student loan, monthly living expenses and any other debt payments.

If you have bad credit, lower income or don’t meet these qualifications, you can apply with a creditworthy co-signer who meets these qualifications.

What’s the difference between student loan refinancing and student loan consolidation?

Student loan refinancing. Student loan refinancing is done with a private lender, while federal student loan consolidation is done with the federal government. The federal government does not refinance student loans, so the best choice for student loan refinancing is to refinance with a private lender.

Student loan refinancing is the process of receiving a new student loan with a lower interest rate and monthly payment in place of your current student loans. The goal of student loan refinancing is to save money, pay off student loans faster and get out of debt more quickly. You can refinance federal student loans, private student loans or both.

Federal student loan consolidation. Federal student loan consolidation is the process of combining all your federal student loans into a Direct Consolidation Loan. With student loan consolidation, you will have one federal student loan, one interest rate and a lower monthly payment. You can still refinance private student loans if you choose to consolidate federal student loans into a Direct Consolidation Loan. The downside of a Direct Consolidation Loan is that you won’t receive a lower interest rate. To receive a lower interest rate, student loan refinancing is your best option.

How often can you refinance student loans?

There is no limit to how often you can refinance student loans. Student loans do not have any origination fees or a prepayment penalty, which is important because you won’t have to pay any prepayment penalties when you refinance. This means that any time you find a lower interest rate, you could refinance student loans to save money without paying any fees.

There are many reasons why you should refinance student loans again:

  • Get a lower interest rate
  • Change your loan terms
  • Change lenders and student loan servicers
  • Release a co-signer

Why should I refinance my student loans?

The main reason to refinance student loans is to get a lower interest rate. A lower interest rate means you can save money on your student loans, payoff student loans faster and get out of debt more quickly. You can compare lenders to find the lower interest rate for which you qualify, and also you can evaluate other loan terms.

There are several reasons why you should refinance student loans:

  1. Get a lower interest rate
  2. Save money
  3. Pay off student loans faster
  4. Change loan terms
  5. Simplify student loan repayment
  6. Change lender or student loan servicer

When you refinance student loans, you gain control over your student loans because you’re empowered to choose a lower interest rate, select a fixed or variable interest rate and even decide your student loan repayment period.

How much does it cost to refinance student loans?

There are no fees to refinance student loans. That means that there are no origination fees or prepayment fees, so you can pay off student loans early without any prepayment penalty.