The Best Student Loan Refinance Companies for 2018

By: Louis DeNicola

Refinancing your student loans can potentially lower your monthly payments, save you money on interest over the lifetime of the loan and make it easier to manage your loan payments.

While many private student loan refinance companies offer loans that can help you achieve these goals, there are also important differences to consider. Eligibility requirements, loan terms and fees can vary from one lender to the next, and the interest rate you receive may depend in part on which lender you use. There may also be additional benefits and features, such as discounts or free services, that vary depending on the choice you make.

Whether they’re fun features or important fine-print terms, the potential differences means its important to carefully consider your options before choosing a lender.

Table of Contents

How we ranked private student loan refinance companies

The top 7 private student loan refinance companies

Learn more about refinancing student loans:

How we ranked private student loan refinance companies

To zero in on the best student loan refinance companies, SimpleTuition started by identifying the 14 largest national lenders that offer private student loan refinancing. We scored each lender on the following criteria and the seven lenders with the best average score received the “top lender” designation.

High and low interest rates: We found the lowest and highest possible annual percentage rate (APR) with either fixed- or variable-rate loans, and compared with the average lowest and average highest APR. We awarded top marks to whichever lenders had below-average APRs.

Application or origination fees: Does the lender either charge a fee for applying for student loan refinancing or have an origination fee that’s charged once you agree to take out the loan? None of the 16 largest student loan refinancing companies charge either fee (these aren’t common with student loan refinancing in general), so they all got top marks.

Ability to refinance Parent PLUS loans: Does the lender either let you refinance a Parent PLUS loan with your loan or offer Parent PLUS loan refinancing for parents? Points were taken away if the lender didn’t offer either option.

Maximum repayment terms: If you want to lower your monthly payments, you may want to choose the longest loan term possible. Since student loans can’t have a prepayment penalty, you can still make additional payments and pay off the loans early if you’re able to pay more later. All seven of the top lenders offered up to a 20-year term, but some other large lenders capped out at a 15-year term.

Repayment term choices: While a longer repayment term can decrease your monthly payment, a shorter term could give you a lower interest rate. Which is best depends on your circumstances, so the more choices the lender offered, the more points it received.

Soft credit check prequalification: Some lenders let you see if you can qualify for a loan, and show you estimated loan offers, with a soft credit check (the kind that doesn’t hurt your credit score). It’s a great way to compare offers without a full commitment, and all seven lenders offered this.

Ability to release a co-signer: You may need a co-signer to qualify for refinancing, or to help you get a lower interest rate. But some lenders let you release the co-signer and take full responsibility for the loan after making some consecutive on-time payments and passing a credit check. Four of the seven lenders got top marks for offering a co-signer release option.

Autopay discount: Many lenders offer a 0.25 percent interest rate discount if you sign up for autopay. We took a point away if the lenders didn’t offer any discount, and gave extra points to the few lenders that offered a larger autopay discount option.

Offers unemployment protection or forbearance: If you’re having trouble making payments, some lenders let you temporarily suspend your monthly payments without having to pay a late payment fee or defaulting on the loan. Most of the top lenders offered up to 12 months of reprieve over the lifetime of the loan, and one received a higher score for offering up to 18 months.

Extra credit: Anything else that might appeal to borrowers, such as SoFi’s free career coaches or CommonBond’s promise to fund the education of a child in need, earned the lender extra credit.

In descending order, the following private student loan refinancing companies got the best average score:

  1. CommonBond
  2. Laurel Road
  3. SoFi
  4. Earnest
  5. LendKey
  6. Citizens Bank
  7. Education Loan Finance

Loan information

 

 

 

 

 

 

 

Lender

Variable APR

Fixed APR

Terms offered

Balance range

Soft credit check

 

CommonBond

2.48-7.00%*

3.20-7.25%*

5, 7, 10, 15, or 20 years

$5,000 to $500,000

Yes

Learn more

Laurel Road

2.95-6.37%*

3.50-7.02%*

You may be able to choose, up to 20 years

$5,000 to full loan balance

Yes

Learn more

SoFi

2.480%-6.990%*

3.899%-7.804%*

5, 7, 10, 15, or 20 years

$5,000 to full loan balance

Yes

Learn more

Earnest

2.47-6.23%*

3.89-6.97%*

180 terms, between 5 and 20 years

$5,000 to $500,000

Yes

Learn more

LendKey

2.47-8.03%*

3.49-8.72%*

5, 7, 10, 15, or 20 years

Loan limits vary depending on the lender

Yes

Learn more

Citizens Bank

2.57-8.17%*

3.75-8.69%*

5, 10, 15, or 20 years

$10,000 to $350,000

Yes

Learn more

Education Loan Finance

2.55-6.01%

3.09-6.69%

5, 10, 15, or 20 years

$15,000 to full loan balance

Yes

Learn more

*Rates are current as of August 1, 2018 and include a 0.25 percent autopay discount

**Minimum loan amounts may be higher in some states

Eligibility requirements

 

 

 

 

 

 

 

Lender

Minimum Credit Score

Eligible degrees

Eligible loans

Annual income requirement

Residency restrictions

 

CommonBond

660

A bachelor’s degree or higher from an eligible school or program

Private and federal student loans

No minimum

Not available to residents of ID, LA, MS, NV, SD, or VT

Learn more

Laurel Road

Not disclosed

A bachelor’s degree or higher from an eligible school or program

Private and federal student loans

No minimum disclosed

Available in every state

Learn more

SoFi

650

An associate degree or higher from an eligible school or program

Private and federal student loans

Must have a job, a different income source or have an offer to start working within 90 days

Available in every state

Learn more

Earnest

650

An associate degree or higher from an eligible school or program

Private and federal student loans. Sallie Mae loans may not be eligible

Must have a job, a different source of income or have an offer to start working within six months.

Not available to residents of AL, DE, KY, MS, NV, or RI.

 

No variable rates in IL, MN, NH, OK, TN, TX, UT and WY.

Learn more

LendKey

 

Varies by lender, but often in the mid-600s

An associate degree or higher from an eligible school or program, which varies depending on the lender

 

Private and federal student loans

 

$24,000 per year

Not available to residents of ME, NV, ND, RI or WV

Learn more

Citizens Bank

Not disclosed

No degree requirement

Private and federal student loans. Federal loans can’t be on an income-driven plan

 

$24,000 per year

Available in every state

Learn more

Education Loan Finance

680

A bachelor’s degree or higher from an approved post-secondary institution

Private and federal student loans

No minimum disclosed

Available in every state

Learn more

 

What they offer borrowers

In addition to their differing eligibility requirements and loan rates and terms, lenders may offer different features or perks that appeal to borrowers, or set some issues aside. For example, although none of the top picked lenders have this, some companies charge an origination fee — a percentage of your new loan amount that you must pay upfront or roll into your new loan balance.

Also, only some lenders will let you want transfer a Parent PLUS loan that a parent took out to pay for your education to your new loan. Others may offer Parent PLUS refinancing, which allows the parent to refinance his or her loan to a lower rate, but won’t let you transfer the legal responsibility to the child.

Differences when it comes to co-signers can also be important. Having a co-signer can help you qualify for refinancing, or may help you get a lower interest rate even if you could qualify on your own. A co-signer shares legal responsibility for the debt, and if the primary borrower can’t or doesn’t make a payment, the co-signer’s credit could be hurt and assets could be at risk if he or she doesn’t make a payment on the primary borrower’s behalf.

Most of the top lenders let you add a co-signer to your loan, and some also let you release the co-signer later. To do so, you generally need to make a series of full (interest plus principal) on-time payments, and you’ll need to meet the credit, income and other qualifications to take on the loan on your own.

Available from all seven top lenders, you can check your estimated loan terms with a soft credit inquiry. This won’t hurt your credit score like a hard inquiry (the type that often occurs when you apply for a new loan or credit card), and can give you a better sense of your possible loan options from different lenders.

Perks and benefits

 

 

 

 

 

 

 

 

 

Lender

Autopay reduction

Origination, application or prepayment fees

Can apply with a co-signer

Co-signer release available

Unemployment protection

Parent PLUS Refinance available

Parent PLUS Loan transfers available

 

CommonBond

0.25%

No

Yes

Yes, after 36 consecutive full payments.

Up to 12 months

Yes

Yes

Learn more

Laurel Road

0.25%

No

Yes

Yes, after 36 consecutive full payments

Up to 12 months

Yes

Yes

Learn more

SoFi

0.25%

No

Yes

No

Up to 12 months

Yes

Yes

Learn more

Earnest

0.25%

No

No

No

Up to 12 months

No

No

Learn more

LendKey

0.25%

No

Yes

Yes, and the qualifications depend on the lender

Up to 18

months

No

No

Learn more

Citizens Bank

0.25 to 0.50%

No

Yes

Yes, after 36 consecutive full payments

Up to 12 months

No

No

Learn more

Education Loan Finance

None

No

Yes

A cosigner may not be taken off your loan but you can apply for a new loan without your cosigner

Forbearance available (up to 12 months)

 

Yes

No

Learn more

 

The top 7 private student loan refinance companies

Learn a bit more about the stand-out features that each of the top seven lenders offers, and a few potential drawbacks or fine-print items you should be aware of before moving forward with a lender.

1. CommonBond

CommonBond is an online-only lender that offers student loans and student loan refinancing. Three Wharton MBA graduates started the company in 2011, and following the vision of other companies that build a charitable component into their business models, CommonBond has a social promise. It partners with the for-purpose organization, Pencils of Promise, and for every loan that CommonBond funds it also funds the education of a child in the developing world.

Why we like CommonBond

The social promise isn’t the only reason to like CommonBond. It offers one of the lowest fixed-rate APRs as of the date this was written, and you can check your estimated loan offers with a soft credit check.

If approved for refinancing, you can choose between five loan terms, ranging from five to 20 years, with either a variable- or fixed-rate loan. There’s also a 10-year hybrid-rate loan, which has a fixed rate for five years and then switches to a variable rate for the next five years.

CommonBond gives you the option to apply with a co-signer, and you may be able to release the co-signer after making 36 consecutive full payments. You can also refinance Parent PLUS loans into your new loan.

You may also be interested in CommonBond’s free events. Available to borrowers, they range from member dinners to educational discussions on investing or managing personal finances.

Where CommonBond may fall short

If you can qualify for refinancing with CommonBond, and you like the loan terms it offers you, there are few downsides. But there are residency requirements, and you won’t qualify if you live in Idaho, Louisiana, Mississippi, Nevada, South Dakota or Vermont. Also, you also must have earned at least a bachelor’s degree to be eligible.

Learn More About CommonBond

2. Laurel Road

Laurel Road is the student, personal and mortgage loan division of Darien Rowayton Bank (DRB), a large financial institution that offers a variety of financial products. Its student loan refinancing offering has may of the top features we looked for, although it doesn’t stand out with any extra bells or whistles.

Why we like Laurel Road

In short, Laurel Road ticks all the boxes. It offers student loan refinancing in every state, doesn’t have a maximum loan limit, lets you include and release a co-signer, and you can refinance a parent loan.

Although you may not see the option when filling out the online application, you might be able to choose a term besides the prominently listed five, seven, 10, 15 or 20-year options. Laurel Road writes in its FAQ, that subject to its underwriting criteria, you can choose any term below 20 years.

Where Laurel Road may fall short

There aren’t many specifics to complain about, Laurel Road simply doesn’t outshine the competition with special events for borrowers, a social cause, above-average discounts or protections or extraordinarily low advertised APRs. One area where it may fall short is you must earn at least a four-year degree to qualify.

Since there’s an option to check your rate with a soft credit pull, it’s worth at least seeing if you’ll qualify and the estimated terms you could get.

Learn More About Laurel Road

3. SoFi

Although it’s more common now, when SoFi launched in 2011 it was one of the first lenders you could use to refinance private and federal student loans together. It still offers that option today, and you can also refinance a parent loan into your new consolidated loan.

SoFi offers three student loan refinancing programs, one for undergraduate and graduate loans, one for parent loans and one for medical residents and fellows. We focused on the program for refinancing undergraduate and graduate school loans.

Why we like SoFi

SoFi lets you refinance a variety of loan types together, and you can choose from five loan terms (ranging from five to 20 years) and fixed- or variable-rate loans. There also isn’t a preset limit to how much you can refinance.

In additional to its loan offering, SoFi stands out by offering borrowers a variety of perks, including discounts on other SoFi loans, free assistance from a career coach and invitations to community events, including fitness classes and educational workshops.

Where SoFi may fall short

SoFi may not be a good option if you don’t have great credit and a decent income. It tends to lend to high-income borrowers who are very creditworthy. While you may be able to qualify with a co-signer if you can’t meet the requirements on your own, SoFi doesn’t let you release a co-signer.

Learn More About SoFi

4. Earnest

Earnest stands apart from other lenders with its unique, customizable loan terms and nontraditional underwriting practices. It lets you refinance private and private student loans together, and as of the time of writing offers the lowest low-end and high-end APRs on its loans.

Why we like Earnest

Although there are credit and income requirements, Earnest says it takes applicants’ employment history, career prospects and savings patterns into consideration. In other words, if you make a practice of putting money away for a rainy day fund, that might impact your interest rate.

You can also choose, down to the month, the loan term you want as long as it falls between five and 20 years. Being able to choose a term that leads to a monthly payment that matches how much you can afford, rather than having to choose a longer term because you can’t quite afford the monthly payment at a lower level, could save you money on interest over the lifetime of the loan.

Earnest also makes it easy to increase your autopay amount or make multiple payments throughout the month, if you can afford to repay the loan early. On the other hand, if you’re having trouble, once every 12 months (after making at least six consecutive on-time payments) you can skip a payment.

Where Earnest may fall short

The nontraditional underwriting may be able to help, but if you can’t qualify for refinancing with SoFi on you’re own, you’re out of luck. The company doesn’t let you add a co-signer when refinancing student loans, and you can’t include parent loans when refinancing.

You also won’t be eligible if you live in Alabama, Delaware, Kentucky, Mississippi, Nevada or Rhode Island.

A large unknown is that Navient announced it intended to buy Earnest in October 2017. The press release says Earnest will remain a separate brand and will continue to offer the same customer service and loan terms, rates and benefits. But it may be troublesome for some borrowers, as Navient was sued by the Consumer Financial Protection Bureau (CFPB) in early 2017. As the CFPB wrote, Navient was “systematically and illegally failing borrowers at every stage of repayment.”

Also, because of the acquisition, you may not be able to refinance Sallie Mae student loans due to a noncompete agreement between Navient and Sallie Mae.
Learn More About Earnest

5. LendKey

Unlike the other top picks in this list, LendKey connects borrowers to community banks and credit unions across the country. By streamlining and unifying the process, LendKey lets you fill out one application and see a variety of offers that you’re eligible for; all with a soft credit check.

Why we like LendKey

LendKey can help you compare loan offers from a variety of financial institutions that you might not know about otherwise. They all offer five loan terms, ranging from five to 20 years, and most lenders offer a co-signer release.

Two loan terms that stand out are an interest-only repayment plan, available on the 15- and 20-year loan terms from most lenders. Lenders may also offer up to 18 months of forbearance, in six-month increments, if you’re facing financial hardship. Some other lenders limit forbearance to a total of 12 months of the lifetime of the loan.

Where LendKey may fall short

The small print can vary from one lender to the next. For example, to release a co-signer you may need to make 12, 24 or 60 on-time payments, or the lender may not offer a co-signer release at all. It can be difficult to screen for these fine-print terms when you’re comparing loan offers, so be sure to read the terms of the specific loan you’re considering before signing.

LendKey’s lenders also don’t let you refinance a parent loan with your loans. And its student loan refinancing product isn’t available to residents of Maine, Nevada, North Dakota, Rhode Island or West Virginia.

Learn More About LendKey

6. Citizens Bank

A large traditional bank, Citizens Bank offers student loan refinancing across the country and competes with online-only lenders when it comes to interest rates and loan terms. It even has a few perks that aren’t available from many other lenders.

Why we like Citizens Bank

Citizens Bank is the only lender to make our top rankings that lets you refinance your student loans even if you didn’t receive a degree. To qualify, you’ll first have to make at least 12 full on-time payments to your original loan servicer.

Most student loan refinancers offer a 0.25 percent interest rate discount if you sign up to autopay your loans. Citizens Bank provides this as well, plus an additional 0.25 percent interest rate discount if you or your co-signer have a qualifying account when you apply for refinancing. Qualifying accounts include checking and savings accounts, loans and credit cards, and the discount remains even if you close the qualifying account after refinancing your student loans.

Where Citizens Bank may fall short

You’ll have to choose from four loan terms: five, 10, 15 or 20 years. The lack of another short-term option (often seven years from the other top lenders) means if you can’t afford the monthly payments with a five-year term, you’ll be forced into a longer, possibly more expensive, loan option.

Citizens Bank also doesn’t let you refinance a parent loan with your loan and has a $10,000 minimum loan limit. Other lenders may let you refinance as long as you have a combined $5,000 loan amount.

Learn More About Citizens Bank

7. Education Loan Finance

Education Loan Finance is a student loan refinancing program offered through SouthEast Bank. They have over 30 years of experience in the student lending industry and offer competitive rates and terms in the student refinance space.

Why we like Education Loan Finance

Education Loan Finance stands out when it comes to their referral and bonus programs. With their referral program, you can share referral links and if a new customer refinances with Education Loan Finance through your referral link then you receive $400 and your referral receives $100.

Along with the referral bonus is the Fast Track Bonus program. If you apply for an Education Loan Finance, your loan is approved, and you accept their offer within 30 days of the application date, you can receive $100. To receive the $100, you must be a new customer with Education Loan Finance. They define a new customer as an individual without an existing Education Loan Finance account and who has not had an Education Loan Finance account in the last 24 months.

Education Loan Finance offers refinancing in all 50 states along with Washington DC and Puerto Rico.

Where Education Loan Finance may fall short

Unlike some of the other lenders on the list, Education Loan Finance does not offer an autopay discount to their borrowers. Though, you may notice that their rates are competitive even without the autopay discount.

The minimum required loan balance to refinance with Education Loan Finance is $15,000, which is higher than the other lenders. In times of economic hardship, they do grant forbearance but they do not disclose the length of time that they offer unemployment protection.

Learn More About Education Loan Finance

Learn more about refinancing student loans:

Should I refinance my student loans?

Even if you qualify, there’s a lot to consider before applying for refinancing and accepting a loan offer.

Refinancing your student loans generally offers up to six benefits:

Refinancing can carry significant risk — especially if you’re considering refinancing federal student loans.

There are a few potential disadvantages, regardless of whether you’re refinancing private or federal student loans. These include:

Additionally, some drawbacks that are specific to refinancing federal student loans with a private student loan.

Considering all these pros and cons, how they apply to your situation and possibilities for the future when you’re thinking about refinancing your student loans can help lead you to an informed and fruitful decision.

When to consider student loan refinancing alternatives

Sometimes refinancing your student loans clearly isn’t the best option, but there still could be helpful alternatives to doing nothing.

For example, if you can’t qualify for a lower interest rate, it likely doesn’t make sense to refinance. And if you’ve already made progress with a loan forgiveness program, or plan to work in the government or nonprofit sectors and have a repayment plan that’s longer than 10 years, you may also want to stay the course.

There are also times when refinancing simply isn’t an option because you can’t qualify. This could be because of your credit, income, the types of loans you have, your loan balance, the school you went to or your citizenship status.

One option for your federal student loans is to consolidate them with a direct consolidation loan, which isn’t credit-based. The new loan has the weighted interest rate of the loans you’re combining, so it won’t save you money. But you may be able to change your loan’s term, which can lower your monthly payment, and you’ll be combining multiple loans into one, simplifying your finances.

If you do qualify for refinancing, but you don’t want to lose the federal benefits on your federal student loans, you can also refinance your private student loans and consolidate your federal loans. But beware, there may be downsides to federal consolidation, too. (For example, you may reset the counter on qualifying payments for a loan forgiveness program.)

In the end, making a significant change to a large loan is a decision that you should preface with research. Determine if you should refinance your loans, and if you decide that it’s a good idea, then compare lenders and loan offerings to find the option that’s best for you.

 

Lower your monthly payment by refinancing

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