While consolidation of your federal loans means that you combine more than one loan into a single loan, refinancing means issuing a new loan (and paying off your existing student loans) with a new student loan with a lower interest rate.
Compare Our Top Picks For Student Loan Refinance For 2021
Overview
| Key | Value |
|---|---|
| Variable Rates: | 2.24% – 6.42% |
| Fixed Rates: | 2.99% – 6.88% |
| Minimum Credit Score: | 650 |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $5,000 ($10,000 in CA) |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15, 20 years |
| Borrower Residency: | All states |
| Hardship Deferment: | Yes |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 1.99% – 5.74% |
| Fixed Rates: | 2.98% – 5.89% |
| Minimum Credit Score: | 650 |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $5,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5-20 years |
| Borrower Residency: | All States except KY or NV |
| Hardship Deferment: | Yes |
| Co-signer Option: | No |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 2.39% – 6.01% |
| Fixed Rates: | 2.79% – 5.99% |
| Minimum Credit Score: | 680 |
| Minimum Income: | $35,000 |
| Fees: | None |
| Minimum Loan Amount: | $15,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15, 20 years |
| Borrower Residency: | All States |
| Hardship Deferment: | Yes |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 1.89% – 5.99% |
| Fixed Rates: | 2.63% – 6.25% |
| Minimum Credit Score: | 660 |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $5,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5 – 20 years |
| Borrower Residency: | All states |
| Hardship Deferment: | Varies |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 1.89% – 5.90% |
| Fixed Rates: | 2.80% – 6.00% |
| Minimum Credit Score: | 700 |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $5,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15, 20 years |
| Borrower Residency: | All States |
| Hardship Deferment: | Yes |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Overall Rate: | 1.95% – 3.85% |
| Variable Rates: | – |
| Fixed Rates: | 1.95% – 3.85% |
| Minimum Credit Score: | None |
| Minimum Income: | None |
| Fees: | None |
| Minimum Loan Amount: | $25,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15 years |
| Borrower Residency: | Must live near a branch in California; New York City; Boston; Greenwich, Connecticut; Palm Beach, Florida; Portland, Oregon; or Jackson, Wyoming |
| Hardship Deferment: | No |
| Co-signer Option: | Yes |
Overview
| Key | Value |
|---|---|
| Variable Rates: | 1.91% – 5.25% |
| Fixed Rates: | 2.95% – 7.63% |
| Minimum Credit Score: | 680 |
| Minimum Income: | $24,000 |
| Fees: | None |
| Minimum Loan Amount: | $5,000 |
Details
| Key | Value |
|---|---|
| Eligible Loans: | Private & Federal |
| Eligible Degrees: | Undergraduate & Graduate |
| Loan Terms: | 5, 7, 10, 15, 20 years |
| Borrower Residency: | All states, except ME, ND, NV, RI, WV |
| Hardship Deferment: | Yes |
| Co-signer Option: | Yes |
Student Loan Consolidation
Make Lemonade Tip: If you have a Perkins loan and are considering consolidating your Perkins loan, you are better off keeping your Perkins loan outside of your student loan consolidation.
Make Lemonade Tip: The primary reason is that Perkins loans offer certain teacher student loan forgiveness and public service student loan forgiveness programs, and you would lose those benefits if you consolidate your Perkins loan.
How To Apply For Federal Loan Consolidation In 5 Steps:
- Create a Federal Student Aid (FSA) ID through Federal Student Aid.
- Log on to the National Student Loan Data System (NSLDS) to view your loan types as well as balances and interest rates.
- Choose a repayment plan (income-based or basic)
- Apply for direct consolidation
- Pick a student loan servicer (FedLoan, Great Lakes, Nelnet, or Navient)
What is an income driven repayment option?
Income-Based Repayment Option
The federal government offers four income-based and three basic repayment plans to help you repay your federal loans in a more financially manageable way. Let’s take a closer look to see if any of these options work well for you.
- Income-based repayment
- Pay As You Earn
- Revised Pay As You Earn
- Income-Contingent Plan
Make Lemonade Tip: While an income-based repayment plan can lower your monthly payment, remember that it may now take longer to pay off your student loan.
Make Lemonade Tip:Â So make sure to balance your potentially lower monthly payment with your time goal to repay your loan.
You can learn more about each of these student loan repayment options.
What is a basic repayment plan?
Basic Student Loan Repayment Plan
There are three types of basic student loan repayment plans:
- Standard Repayment
- Graduated Repayment
- Extended Repayment
The basic student loan repayment plans do not depend on your income and you do not need to reapply each year. The default is the standard repayment plan, unless you otherwise choose the graduated or extended plan. The standard repayment plan involves making monthly payments based on your original loan term. If you can afford to make your monthly payments, you are better off staying with the standard monthly plan because you will pay off your loans on time and pay less in interest compared with an income repayment plan.
Make Lemonade Tip:Â No matter which student loan repayment option you choose, you can pay off your student loan faster by making an extra payment at any time.
Make Lemonade Tip:Â The more extra payments you can make, the faster you can repay your student loan and save on interest costs. Just remember to tell your student loan company to apply your extra payment to your principal balance, rather than toward your next payment.
Student Loan Refinance
Unlike a federal government loan, private student loans are credit-based, which means that your credit history and/or credit score may impact the interest rate on your new loan. Private student loan companies use different underwriting models to determine qualifications and interest rates. But you can expect that the stronger your financial profile and demonstrated financial responsibility, the lower your interest rate will be. The good news is that some private student loan companies enable you to have a co-signer (such as a family member), who will assume financial responsibility for your student loan and can help you obtain approval for your student loan application based on their financial profile.
Why Refinance Student Loans?
The primary reason to refinance student loans is the potential to receive a lower interest rate than your existing student loan. Federal student loans may have interest rates as high as 6.8% on an undergraduate student loan, and even higher for a graduate PLUS loan. You may have other private student loans at even higher interest rates that you borrowed while you were a student. Now that you have graduated and have an income and established a work history, private student loan lenders are likely to offer you a lower interest rate than these types of student loans.
Where can I refinance student loans?
You can find and compare student loan rates from top private student loan companies who offer student loan interest rates as low as 2-3%. Plus, if you sign up for autopay, you can earn a 0.25% discount on your student loan interest rate, which add up to big savings over the course of your student loan term.
Flexible Repayment Terms
Private lenders offer borrowers multiple options to repay their loans, with terms ranging typically from 5 to 20 years. You also will have an opportunity to choose between fixed and variable interest rates. If you want to pay off your student loans and get out of debt as quickly as possible, then you will want to choose a shorter-term option (such as 5 years or 10 years).
While you will save on interest costs (compared with a 20-year loan, for example), your monthly interest costs will be relatively higher than with a longer term loan option. However, you may be able to save money depending on how much money you save with your new interest rate.
Student Loan Consolidation vs Student Loan Refinancing Calculator
Student Loan Refinancing: How To Apply
You can learn more about the top private student loan companies by checking out The Best Lenders To Refinance and Consolidate Student Loans In 2019.
