Category: Refinance
Earnest Student Loan Refinancing Review
Written By: Louis DeNicola
After weighing the pros and cons of refinancing student loans and deciding that you want to refinance your loans, a helpful next step is to research lenders and their loan offerings. If you’ve already started comparing lenders, you may have heard of Earnest, an online-only lender that takes a slightly different approach on student loan refinancing.
In this review, we’ll tell you all about Earnest and how it stacks up against other lenders in the student loan refi space.
What is Earnest?
Earnest student loan refinance in a nutshell
How Earnest compares with other lenders
Advantages of refinancing with Earnest
Drawbacks of refinancing with Earnest
What it takes to qualify
Best borrowers for Earnest
Taking a closer look at the online platform
A look at the fine print
What to expect during the application process
How to compare student loan refi offers
What is Earnest?
Earnest is an online-only lender that offers student loan refinancing, parent PLUS loan refinancing, and personal loans. The company launched in 2013 and has lent nearly $2 billion in student loans.
Earnest stands out from the competition with its holistic approach to underwriting, and flexible student loan terms and repayment options. Your credit, income and outstanding debt are considered when you apply for refinancing, as is common with many types of loans. However, Earnest also considers the following factors:
- If you have enough savings to cover at least two months of normal expenses, including your new loan.
- If you regularly save money and have increased your bank account balances over time.
- Whether you have a lot of non-student loan and non-mortgage debt.
- Whether you’ve made loan payments on time in the past.
- If you regularly pay late, overdraft or insufficient fund fees.
- Your earnings potential in your chosen career.
Base on their eligibility criteria, it’s clear Earnest is willing to work with borrowers who may not have the greatest credit score or income now, yet have managed to save a good chunk of money and have the potential to earn a good salary in their chosen career field.
Earnest student loan refinance in a nutshell
|
|
|
|
Fixed APR range* |
3.89% to 7.89% |
|
Variable APR range*^ |
2.47% to 6.97% |
|
Loan terms offered |
Terms offered every month interval between five to 20 years. In total, there are 180 different term possibilities. |
|
Fees |
No application, origination, prepayment or late payment fees. There may be an $8 fee for returned payments.
Florida residents may also need to pay a 0.35% stamp tax, which is collected by Earnest and sent to the Florida Department of Revenue. |
|
Loan amount |
$5,000 to $500,000 |
|
Repayment plans |
Monthly or bi-weekly payments |
|
Co-signers |
Unlike many student loan refi lenders, Earnest doesn’t allow borrowers to sign up with a co-signer. |
|
Savings opportunities |
Get a 0.25% interest-rate discount when you sign up for automatic debit payments. |
|
Other perks |
You can change your next bill’s due date, and reschedule all future due dates. You can request to skip a monthly payment after making six full on-time payments, and skip another payment after each additional 12 consecutive full on-time payments. |
* Rates are current as of February 6, 2019, and include a 0.25 percent autopay discount
^ Variable rates are capped at 8.95%, 9.95% or 11.95%, depending on the term of your loan.
How Earnest compares with other lenders
Earnest exemplifies a millennial-focused student loan refinancing company with its online application, thorough FAQ section featuring instructional GIFs and a variety of options when it comes to choosing loan terms and repaying your loan.
Being able to choose a precise term could save you money. If you can’t afford a 10-year term, the option of an 11-year term instead of being locked in for 15 years can lower your interest rate and save you money. Similarly, having a bi-weekly payment option may align with borrower’s paycheck schedule, but it can also lead to long-term savings.
Earnest also offers options to borrowers who have trouble making payments that you won’t find from other lenders. Logging into your account to change your due date, or choosing to skip an occasional monthly payment, could make all the difference to a borrower who’s just a little behind.
Advantages of refinancing with Earnest
Merit-based underwriting. Although an applicant’s credit score is part of the approval process, Earnest also considers educational and employment history, your earning potential and your overall financial habits. By reviewing your linked financial accounts, Earnest can also determine if you regularly save money or have an emergency fund, which could help you get approved. The inclusion of this data in the decision process may be particularly beneficial for recent graduates, who may not have a long credit history or high credit score.
Choosing a loan term based on your payment amount. When you refinance your student loans with Earnest, you can choose a term between five and 20 years and Earnest will determine the corresponding interest rate and monthly payment. Such flexibility lets you choose as short a term as possible, rather than having to choose from a few options, and can lead to getting a lower interest rate and paying less in interest over the lifetime of your loan.
Flexible repayment features. Earnest offers several features that can make it easier to manage your student loan payments. For example, you can choose to make payments monthly or every two weeks. The latter option may better align with your paydays, and making loan payments every two weeks can lead to saving money on interest over the lifetime of your loan. You may also benefit from these features:
- Skip a payment. Once you make at least six on-time payments, you can request to skip a payment. You can also request to skip an additional payment every time you make 12 consecutive on-time payments.
- Change your payment date. You can easily change your next payment date and delay it by up to six days, as long as you make the request four or more business days before the payment is scheduled. This could help you avoid a late payment when money is tight. You can also reschedule your payment due date for all future autopayments, perhaps to align with when you get paid.
- Make extra payments. If you’re enrolled in autopay, you can also schedule extra payments throughout the month online or with the Earnest app. You can also increase your autopay amount, or switch back to making minimum payments, from your online dashboard.
Loan forbearance and deferment options. You may be able to temporarily stop making payments by putting your loan into forbearance or deferment. Interest continues to accrue, but missing the payments while the loan is in forbearance or deferment won’t hurt your credit, result in fees or lead to defaulting on your loan.
You may qualify for forbearance if your income drops through no fault of your own (e.g. your hours are cut or you’re laid off), you’re on parental leave or your essential expenses (e.g. childcare or medical bills) unexpectedly increase. You can put your loans into forbearance for up to three months at a time, and for a total of 12 months over the lifetime of your loan.
Deferment may be an option if you return to school at least half-time, join the Peace Corps or are on active duty while serving in the military. Earnest may allow you to defer your loan payments for up to 36 months.
Death or total and permanent disability discharge. If you die or become permanently and totally disabled, Earnest will discharge the remainder of your debt.
In-house loan servicing. Some student loan refinancing lenders outsource the servicing of the loan to a third-party company. The servicer is the company you’ll make your monthly payments to, and the company you’ll have to deal with if you have trouble making payments or want to put your loans into forbearance or deferment. Earnest manages the application process and continues to service the loan after it’s disbursed.
Drawbacks of refinancing with Earnest
Can’t refinance with a co-signer. Earnest’s underwriting process may make it easier for some people who don’t have great credit to qualify for refinancing. But unlike many other lenders, you can’t add a co-signer to your application to increase your chances of qualifying, or to help you get a lower interest rate on your new loan.
Questions about the future. In October, Navient, which spun off from Sallie Mae in 2014 to manage the company’s federal student loan debt business, announced it will acquire Earnest in a $155 million deal. The brands will remain separate, and Earnest’s loan terms, benefits, rates and customer service won’t change, according to the press release. However, some borrowers may be concerned as Navient got in trouble with the Consumer Financial Protection Bureau (CFPB) earlier this year for illegal practices related to its student loans, including giving borrowers misleading or inaccurate information.
Can’t refinance Sallie Mae or parent student loans. The acquisition by Navient also means you won’t be able to refinance Sallie Mae loans, as the two companies, which were formerly under the Sallie Mae brand, have a non-compete agreement. Additionally, you can’t include student loans that a parent took out to pay for your education with your student loans. However, your parent could apply to refinance those loans themselves.
Limited availability. Earnest doesn’t offer student loan refinancing in five states and doesn’t offer variable-rate student loans in eight states*.
You must graduate. You must receive a degree, or be close to graduating, if you want to refinance your student loans with Earnest. Although you may be able to qualify with an associate’s degree, there are also lenders that offer refinancing even if you didn’t get a degree.
Compare student loan refinance lenders
What it takes to qualify
|
|
|
|
Credit score |
650+ |
|
Income/employment |
Must have a job, a different income source or have an offer to start working within six months |
|
Loan types |
|
|
Education requirements |
An associate degree or higher from colleges or universities that are accredited with the U.S. Department of Education under Title IV. |
|
State availability* |
Not available to residents of Alabama, Delaware, Kentucky, Nevada, or Rhode Island Variable-rate loans aren’t available in Illinois, Minnesota, New Hampshire, Oklahoma, Tennessee, Texas, Utah, and Wyoming. |
Best borrowers for Earnest?
You’re financially prudent but still building your credit. You may have trouble qualifying for refinancing without a co-signer if you don’t have a high credit score. But if you practice good financial habits, like regularly saving for retirement and having an emergency fund that will cover at least two month’s worth of expenses, you may be a good candidate for refinancing with Earnest.
You want to release a co-signer. If you currently have a private student loan with a co-signer, refinancing the loan in your name is one way to release the co-signer. You can do this by refinancing with many companies, but Earnest could be a good choice considering its underwriting process.
Taking a closer look at the online platform
Earnest’s website is easy to navigate and filled with helpful information. Right at the top, you’ll find a link to the eligibility page, with overviews of the eligibility requirements for each of Earnest’s loans.
There’s also a help center, which is like a frequently-asked questions hub that’s broken down into five subsections: general questions, applying for loans, repaying your loans, student loan refinancing and personal loans. Each has a variety of detailed and high-level questions and answers, and some of the answer pages have relevant GIFs that show you how to make changes to your online account.
The application process is also straightforward, with guidance provided along the way and answer boxes that pop up when you scroll over many terms.
A look at the fine print
Between the eligibility page, help center and the loan disclosure forms, Earnest does a good job of making loan terms and conditions easy to find.
Fine-print areas that you may want to review when comparing lenders and loans include the fees (Earnest barely has any), co-signer options (you can’t add a co-signer with Earnest), and caps on variable-rate loans (Earnest’s range from 8.95% to 11.95%).
Qualification criteria can also be important, especially if the lender doesn’t offer a soft credit check pre-approval. But Earnest does a good job of listing its eligibility requirements and you can apply for pre-approval without hurting your credit.
What to expect during the application process
To get a feel for the process, SimpleTuition began a student loan refinancing application. You can start by getting pre-approved with a one-page application or step-by-step process. They both ask for the same information:
- Your name, address and phone number.
- The highest degree you’ve achieved, when you graduated and the school you attended.
- Your annual income; your monthly rent or mortgage payments; and the sum of your cash, retirement and investment accounts.
- Your approximate student loan balance.
- Your email address to create an account.
- Whether you’re a U.S. citizen or permanent resident.
- Your Social Security number and consent for Earnest to do a soft credit inquiry, which won’t affect your credit score.
After completing this pre-approval application, you may get results immediately showing potential interest rates and monthly payments. Ours listed loan options for five, seven, 10, 15 and 20-year loan term loans. Or, you may be asked to continue to fill out the full application to see your rates.
The application
Education. Your school name, degree and graduation date will be filled in already because you filled that out for the pre-approval process, but you’ll also have to specify your major and when you started at the school. If you have several degrees, you can add information about each school and degree.
You can also specify if you’re currently enrolled, completed your degree, plan to enroll in the future, didn’t complete a degree or transferred between schools. The relevant information (such as start or end dates) change to match your choice.
Employment. Indicate whether you’re currently employed or not. If not, you’ll be prompted to share if you have a job lined up, along with that job’s information.
If you are employed, you’ll need to enter your company’s name, job title, when you started working there, whether you’re a full-time or part-time employee and if you’re employed by someone else or self-employed as a contractor or business owner. You’ll also be asked if your job is ending soon, in which case you’ll be prompted to add information about your next employer.
You can add several jobs to your application, and you can indicate your total number of years of professional experience.
Financial. Earnest asks you to connect the checking account where your paycheck gets deposited, credit cards with balances and savings or investment accounts. It can use the connection to verify your income and expenses, and better understand how you handle your finances.
You’ll also be asked to share your annual salary or wages, bonuses and non-employment income (such as child support or rental property income). If you want, you can also share the value of additional assets in retirement and brokerage accounts.
A required step is indicating if you have missed any payments in the last five years and whether any of your accounts have been in collections. If you answer yes, you’ll have space to explain the circumstances.
Personal. A lot of your basic information, including your name and address, may already be filled in at this point. However, you may need to add your date of birth and a previous address if you’ve moved in the last six months.
There’s also an optional text box where you can add any additional explanations.
Review. The final step is to confirm the loan amount you want to apply for, consent to a hard credit inquiry (which could affect your credit score), and enter your Social Security number.
After you submit your application, you can check on the status through your account online, call, email or chat with a customer service representative. You may need to upload documents to verify the information in your application, such as a tax return for your income or government-issued ID to verify your identity. Once Earnest has all the required information, it will make you an official loan offer, if you qualify. Your terms are valid for 30 days, giving you time to apply for refinancing from other lenders and compare your offers.
How to compare student loan refi offers
Earnest has a few unique value propositions, and it could be an excellent choice if you want to refinance your student loans. But every student loan refinancing company has its pros and cons, and you will be better off comparing multiple lenders and loan offers before committing.
You can start by reading about some of the top student loan refinancing companies on SimpleTuition and MagnifyMoney, another subsidiary of SimpleTuition’s parent company, LendingTree. Look to see if you meet the minimum eligibility requirements, such as your state of residency, credit score, degree type, and loan amount and type.
Like Earnest, some lenders offer a soft credit check pre-approval, which you can fill out to see if you qualify and your approximate loan terms. When you’ve narrowed down your list to your top choices, you can go ahead with a hard inquiry application at all of them.
Credit-scoring agencies recognize the value of shopping around to find the best loan terms and for credit-scoring purposes, multiple hard inquiries for student loans only count as a single hard inquiry if you occur within a 14- to 45-day window, depending on the credit score being used.
Once you have your official loan offers, you can use a refinancing calculator to find out which will save you the most money. However, also consider the benefits and drawbacks of the lender. Even if it costs you a little more money, you may prefer a lender that has more hardship options for borrowers who have trouble making a payment.
Category: Refinance
CommonBond Student Loan Refinancing Review
Written by: Louis DeNicola
Private student loan companies offer student loan refinancing, a process that lets you take out a new student loan to pay off your existing student loans. While there may be pros and cons to consider, particularly if you have federal student loans, refinancing could lead to a lower interest rate on your loans, lower monthly payments and long-term savings.
Since you’ll be applying and taking out a new loan, you may want to compare different lenders before refinancing. Lenders may offer varying interest rates, which could directly impact how much you pay for your new loan, and there may be differences in benefits and fine-print terms to consider.
CommonBond, an online-only lender, is one of the lenders that you may want to consider if you’re thinking about refinancing your student loans.
Table of contents
What is CommonBond
CommonBond student loan refi in a nutshell
How CommonBond compares to other lenders
What it takes to qualify
Who is CommonBond best for?
What to expect during the application process
How to compare student loan refinancing offers
What is CommonBond?
CommonBond is an online-only lending company that was founded in 2011 and is based in New York City. It offers undergraduate and graduate student loans, MBA student loans, student loan refinancing and parent PLUS loan refinancing.
The company stands out from its competitors with its social promise to fund the education for a child in a developing country every time it funds a student loan or refinances a student loan in the U.S. Additionally, it offers a variety of interest-rate types and loan terms that would suit a variety of borrowers’ needs.
*Rates are current as of February 6, 2019, and include a 0.25 percent autopay discount.
^Variable rates are capped at 8.99% to 9.99% for variable rate loans, and 9.99% for hybrid-rate loans.
How CommonBond compares to other lenders
CommonBond is one of many student loan refinancing companies you can choose from, and it may be one of the top ones to consider. In a comparison of the best student loan refinancing companies for 2018, CommonBond was placed first based on its interest rate offers, fees, offers including Parent PLUS loans, repayment terms and choices and other aspects of its loan offering.
However, it may be best to consider multiple options before deciding which lender to refinance your student loans with, as each has different pros or cons. And CommonBond, as well as other student loan refinancing companies, lets you check your eligibility and approximate loan terms through a pre-approval process that won’t affect your credit.
Advantages of refinancing with CommonBond
Potentially low rates. The low interest rate on CommonBond’s APR ranges may be lower than other refinancing companies’ rates, which could help the most creditworthy applicants save as much money as possible when refinancing.
Hybrid-rate offer. It’s not uncommon for student loan refinancing companies to offer fixed-rate and variable-rate loans. However, CommonBond also has a 10-year hybrid-rate loan. With this loan, you’ll receive a fixed-interest rate for the first five years, and then a variable-rate for the remaining five years. A hybrid-rate loan could offer a lower interest rate than a 10-year fixed rate loan, and it may be a good option if you plan on paying off your loan early but don’t want to get locked into a five-year term.
Five loan terms. If you choose to take out a fixed-rate or variable-rate loan, you can choose from five different repayment terms that range from five to 20 years. The longer your term, the lower your monthly payment will be and the more you’ll pay in interest over the lifetime of your loan.
Deferment and forbearance options. If you’re having trouble making your loan payments, you may be able to temporarily stop making payments by putting them into deferment or forbearance. With either option, the missed payments won’t hurt your credit. However, interest still accrues during deferment and forbearance, and it may be capitalized (added to your loan’s principal) once you start making payments.
CommonBond matches your grace period with up to six months of deferment if you just graduated. You may also be able to defer payments for up to 32 months over the lifetime of the loan if you decide to return to school.
If you’re having trouble making payments due to financial hardship, perhaps because you lost your job, you can apply for forbearance. CommonBond lets you apply for forbearance in three-month increments, and you may be eligible for up to 12 consecutive months of forbearance. In total, your loan can be in forbearance for 24 months.
A social promise. CommonBond promises to give back to others in need, which may appeal to some borrowers. For every loan CommonBond funds, it also works with Pencils of Promise to fund the education of a child in need.
Community events. CommonBond borrowers can attend sponsored events, such as dinners and discussions with entrepreneurs.
An option to release your co-signer. Having a co-signer can help lower your interest rate when you refinance, and may even be a requirement for getting approved depending on your creditworthiness. Once you make 36 consecutive full interest and principal payments, you can apply to release your co-signer. If you pass a credit check, you may take on full responsibility for the debt and continue paying the loan with the same terms. Some other student loan refinancing companies don’t let you apply with a co-signer, or if they do, don’t offer any option to release the co-signer from his or her obligation.
Drawbacks of refinancing with CommonBond
Limited availability. Some student loan refinancing companies are able to offer refinancing in every state. However, CommonBond isn’t available to residents of six states: Idaho, Lousiana, Mississippi, Nevada, South Dakota and Vermont
Must earn at least a bachelor’s degree. You must graduate from an eligible school with at least a bachelor’s degree to qualify for refinancing with CommonBond. Other companies may let you refinance if you earn an associate’s degree or if you leave school before you complete your degree.
Only one interest rate discount opportunity. Student loan refinancing companies may offer up to a 0.50% interest rate reduction if you refinance while you or your co-signer have an eligible account with the lender, or if you make automatic payments from an account with the lender. CommonBond offers a 0.25% interest rate reduction if you sign up for autopay, but doesn’t offer any additional discounts.
No death or permanent disability discharge for co-signers. If you refinance your loans with a co-signer, and the primary borrower dies or becomes permanently disabled, the co-signer will still be responsible for the debt. By contrast, some other student loan refinance companies forgive the debt if the primary borrower dies or becomes permanently disabled. If you don’t have a co-signer, the debt will be forgiven rather than pass on to your estate.
What it takes to qualify:
|
|
|
|
Credit Score |
660+ |
|
Income/Employment |
No minimum income requirement. However, you will need proof of employment or a letter of acceptance from a future employer. |
|
Loan types |
|
|
Education requirements |
A bachelor’s degree or higher from an eligible school or program. |
|
State availability |
Not available to residents of ID, LA, MS, NV, SD or VT |
Who is CommonBond best for?
Because you can apply for pre-approval with a soft credit check, which doesn’t hurt your credit, there’s no harm in checking your rate with CommonBond if you’re considering refinancing your student loans. However, CommonBond’s offering could be best suited for several types of borrowers.
If you have an excellent credit score and low debt-to-income ratio, or are reasonably creditworthy and have an especially creditworthy co-signer, you may be able to get a lower interest rate with CommonBond than a competing lender.
CommonBond’s hybrid-rate option could also be a good choice if you think you could afford to pay off your loan in five years but aren’t completely certain. While you take on a little more risk than you would with a 10-year fixed-rate loan, your interest rate and required monthly payments will be lower than a 10-year fixed-rate loan from CommonBond.
Taking a closer look at the online platform
CommonBond is an online-only lender, and its website is fairly easy to navigate and understand. At the top, you can find links to the CommonBond refinancing and loan offers, as well as a link to the FAQ page. The frequently-asked questions section is where you can find a lot of information about refinancing with CommonBond, including some potentially fine-print items like how much you can refinance, some of the potential fees, eligibility requirements and descriptions of loan terms.
There’s also a search bar at the top of the FAQ section. However, be aware that when you use the search bar, the results could appear from any of the loan products (refinance student loans, refinance Parent PLUS loans, MBA student loans or undergraduate and graduate student loans). If you’re looking for information specifically about refinancing, you may want to scroll down to the appropriate section and look for the answer yourself.
The online application is also straightforward and easy to complete. You’re unlikely to feel overwhelmed as each section only asks you for a few pieces of information, much of which you may know off the top of your head (such as your address or job). There are also clear indications of when the information you submit won’t have an effect on your credit, and when it could hurt your credit.
The fine print
As with many financial contracts, you may want to read the fine print before agreeing to take out a loan. Some of the potential fine-print terms can be found in the FAQ pages. But you may have to look through other parts of the site or review your loan documents to find a few potentially important details.
For example, the late charge and returned check charges are nominal, but we didn’t see them before reviewing the loan disclosure form during the application process.
Potentially much more important details about the loan’s deferment and forbearance options are most clearly spelled out in a blog post from July 2016. This left us questioning whether the information is still accurate (an official representative said it is). The representative also confirmed that your co-signer will still need to repay the loan if you die or become permanently disabled — we couldn’t find that anywhere on the website, but it may appear in the final loan document you’d need to sign.
If you’re having trouble finding the answers to questions, you can reach out to the New York-based Care Team (i.e., customer service) by email or phone. We called a few times and were quickly connected to someone who could answer our questions.
What to expect during the application process
To better understand the process, SimpleTuition created an account and started a student loan refinancing application. The registration asks for your legal name, email address, a password and to agree to a privacy policy. You’ll then need to submit additional information, read over disclosures and agree to a soft credit check before you can see your estimated loan terms.
Submit additional personal information
Once you begin the application, you’ll be asked to share your:
- Phone number
- Date of birth
- Current U.S. address
- Citizenship status
The second step asks about your education:
- The highest degree you received
- Your major, if applicable
- The school’s name
- The month and year when you graduated
- The estimated amount you want to refinance
The third steps involves details about where you live:
- When you moved to your current home
- Whether you own the home, rent or live with your parents.
- Your monthly mortgage or rental payments if applicable.
The fourth step is about your employment:
- You’ll indicate your employment status: employed, retired, self-employed or unemployed/student/stay-at-home parent.
- If you’re employed, you’ll be asked about the industry you work in, your job title, the employer, when you started working there and you’re estimated pre-tax income.
- If you’re retired, you’ll be asked about what industry you worked in and your estimated pre-tax income.
- If you’re self-employed, you’ll be asked about what industry you work in and your estimated pretax income.
- If you’re unemployed/student/stay-at-home parent, there won’t be any additional questions.
Agree to the federal disclosure and a soft credit inquiry
The next page is a federal disclosure that you should read over and understand if you have federal student loans. You can proceed after agreeing that you read, understood and accepted the conditions in the disclosure.
Then you’ll have to give CommonBond the last four digits of your Social Security number and permission to pull your TransUnion credit report to review your credit and give you estimated loan rates. Since this is a soft inquiry, it won’t hurt your credit score.
If you don’t qualify for refinancing on your own, you’ll be prompted to add a co-signer at this point.
Choose a loan
If you’re preapproved for a loan, you can now select the term you’d like to receive. You can sort the options by the length of the term, estimated APR or estimated monthly payments. You may also be able to change your loan option later.
Agree to a hard credit inquiry
Once you click next, you’ll be asked for your complete Social Security number and to agree to a hard credit pull.
We stopped our application at this point, as a hard inquiry could hurt your credit score. However, if you’re shopping for student loans, you can apply with multiple lenders within a 14-day period, and all the hard inquiries may count as one for scoring purposes. Additionally, inquiries from the previous 30 days may not affect your score.
Complete the loan application and verify your information
If you decide to continue with the loan application, you’ll receive actual loan offers (not estimated rates) after you agree to the hard credit inquiry.
To complete the loan application, you may need to upload supporting documents:
- Two recent pay stubs, two recent years’ tax returns or a letter of acceptance from a future employer.
- Recent loan statements for each loan that you’re planning to refinance.
- A recent bank statement or utility bill to verify your residence.
You can then review and e-sign the loan documents, and if approved CommonBond, will pay off your student loans by sending payments directly to your loan servicers. The entire process may take a few business days, but you should continue making student loan payments as you usually do until you can verify that CommonBond has repaid your loans. Otherwise, you may accidentally miss a payment. Your first payment to CommonBond will be due approximately 30 to 60 days after your loan is disbursed.
How to compare student loan refinancing offers
While you may want to get preapproved with CommonBond and refinance your student loans with the company, it could be a good idea to compare your options. A different lender could wind up offering you a lower interest rate, or have discounts and benefits that you won’t receive with CommonBond.
You can read about some of the best student loan refinancing companies on SimpleTuition. You may want to compare interest rate ranges, fees, eligibility requirements, discount opportunities, repayment terms and plans, forbearance and deferment options, death or disability discharge and any other loan terms or benefits that could apply to your individual situation.
Like CommonBond, some other student loan refinancing companies offer a pre-approval with a soft credit check, which can help you get an estimate for your loan terms and whether you’ll need a co-signer. However, don’t automatically rule out the companies that don’t offer a pre-approval. After comparison shopping for lenders, you can apply for refinancing with multiple companies without increasing the impact on your credit. Then, you make your final decision based on the firm offers.
Category: Refinance
Wells Fargo Student Loans Review
By: Louis DeNicola
Wells Fargo is one of the largest banks in the U.S. and a leader in the private student lending space.
As higher education costs continue to rise, student loan borrowing has become a fact of life for millions of college students.
But before we get into Wells Fargo’s private student loan offerings, here’s a quick note about borrowing private student loans: you should always max out your federal student aid first, which includes federal student loans, grants, and work-study programs, before turning to private student loans.
That’s because federal student aid may come with lower interest rates and more borrower protections than private student loans.
Read More: Top Private Student Loan Companies
An essential first step to securing federal aid is filling out and submitting a Free Application for Federal Student Aid (FAFSA), which is a requirement for federal student aid, and for some scholarships.
The same federal student loan terms are offered to every eligible student, regardless of his or her credit, income, employment or outstanding debts. By contrast, your private student rates can vary based on these factors and which lender you choose. Federal student loans may also offer repayment plans and forgiveness programs that aren’t available with private student loans.
However, if you have a gap between what your education costs and what you can afford with your savings, federal aid and income, then private student loans might help.
In this review, we’ll focus on Wells Fargo’s private student loan offerings.
Table of contents
What is Wells Fargo
Wells Fargo student loans in a nutshell
What it takes to qualify with Wells Fargo
How Wells Fargo compares to other lenders
Refinancing student loans through Wells Fargo
What borrower is Wells Fargo best for?
Taking a closer look at the online platform
The fine print
What to expect during the application process
What is Wells Fargo?
Wells Fargo is one of the largest banks in the United States. It was founded over 160 years ago, and today offers a variety of financial products, including bank accounts, mortgages and student loans.
According to Wells Fargo’s quarterly fact sheet from the second quarter of 2017, it’s the top provider of private student loans among banks, and the second largest among all its competitors. It has nearly $12.2 billion in outstanding private student loans. And it continues to offer new loans to a variety of students, and loan consolidation to graduates.
Types of student loans Wells Fargo offers
Wells Fargo has eight private student loan programs. Five of those programs aim to help students pay for educational expenses, two programs help cover post-graduation expenses for health professionals or law students and the final program allows borrowers to consolidate their student loans.
Here’s a brief overview of all eight Wells Fargo student loan programs:
- Career and community college. For students attending two-year schools, career-training programs and non-traditional schools.
- Undergraduate. For students who are pursuing an undergraduate degree.
- Parent. An option for creditworthy adults (doesn’t necessarily have to be the student’s parent) to borrow money that they can use to help pay for their student’s educational expenses.
- Graduate. For students who are seeking a graduate degree, such as a master’s, Ph.D., MBA or law degree.
- Health professions. A graduate degree loan for students who are in school to become a health professional. The loan may cover a variety of programs, including allopathic, osteopathic, physician assistant, pharmacy, veterinary medicine and more.
- Post-medical school loan. For health profession students who need help paying for living expenses, exam costs or review courses while studying for medical boards and clinical exams. The loan can also help pay for expenses related to residency or internship interviews and relocation costs.
- Bar exam. Recent law school graduates and students in their final year of a law program can borrow money to help pay for registration, review courses and living expenses while studying for the bar.
- Consolidation loan. If you’ve taken out private student loans, you may be able to refinance them with a new Wells Fargo Private ConsolidationSM loan.
Wells Fargo student loans in a nutshell
|
|
|
|
|
|
|
Career and community college |
Undergraduate |
Parent |
Graduate |
|
|
Fixed APR Range* |
7.46 to 12.65% |
5.94 to 11.26% |
6.49 to 12.99% |
6.84 to 11.67% |
|
Variable APR Range*^ |
6.35 to 12.05% |
4.57 to 10.51% |
5.74 to 12.24% |
5.64 to 11.07% |
|
Loan terms offered |
12 years |
15 years |
15 years |
15 years |
|
Fees |
No application, origination, prepayment or returned check fees. But there is a $28 late charge. |
No application, origination, prepayment or returned check fees. But there is a $28 late charge. |
No application, origination, prepayment or returned check fees. But there is a $28 late charge. |
No application, origination, prepayment or returned check fees. But there is a $28 late charge. |
|
Loan amount |
$1,000 to $20,000 |
$1,000 to $120,000 |
$1,000 to $25,000 per school year, and $100,000 overall |
$1,000 to $180,000 for law and business school loans, up to $120,000 for other fields of study |
|
Repayment plans |
Full deferment |
Full deferment |
Immediate repayment, or make interest-only payments for up to 48 months |
Full deferment |
|
Deferment period |
Full deferment while in school and for six months after graduation or leaving school |
Full deferment while in school and for six months after graduation or leaving school |
No full deferment option |
Full deferment while in school and for six months after graduation or leaving school |
|
Co-signer option/release |
Can apply with co-signer, and request to release a co-signer after 24 to 48 consecutive, full payments |
Can apply with co-signer, and request to release a co-signer after 24 to 48 consecutive, full payments |
Can apply with co-signer, and request to release a co-signer after 24 to 48 consecutive, full payment |
Can apply with co-signer, and request to release a co-signer after 24 to 48 consecutive, full payments |
|
Savings opportunities |
0.25% autopay discount
0.25% interest rate reduction for prior Wells Fargo student loan customers and Wells Fargo checking account holders; or, 0.50% discount for Portfolio by Wells Fargo customers |
0.25% autopay discount
0.25% interest rate reduction for prior Wells Fargo student loan customers and Wells Fargo checking account holders; or, 0.50% discount for Portfolio by Wells Fargo customers |
0.25% autopay discount
0.25% interest rate reduction for prior Wells Fargo student loan customers and Wells Fargo checking account holders; or, 0.50% discount for Portfolio by Wells Fargo customers |
0.25% autopay discount
0.25% interest rate reduction for prior Wells Fargo student loan customers and Wells Fargo checking account holders; or, 0.50% discount for Portfolio by Wells Fargo customers |
|
|
|
|
|
|
MedCAP® Alternative Loan |
MedCAP-XTRA® Loan |
Bar Exam Loan
|
|
|
Fixed APR Range* |
6.66 to 10.18% |
9.53 to 9.76% |
10.66 to 10.89% |
|
Variable APR Range*^ |
5.06 to 9.54% |
9.07 to 9.30% |
10.44 to 10.66% |
|
Loan terms offered |
15 to 20 years |
Seven year |
Seven years |
|
Fees |
No application, origination, prepayment or returned check fees. But there is a $28 late charge. |
No application, origination, prepayment or returned check fees. But there is a $28 late charge. |
No application, origination, prepayment or returned check fees. But there is a $28 late charge. |
|
Loan amount |
$1,000 to $120,000, $180,000 or $250,000 depending on your discipline |
$1,000 to $5,000, $12,500 or $15,000 depending on your program.
Aggregate limit up to $180,000 or $250,000 depending on your discipline |
$1,000 to $12,000 |
|
Repayment plans |
Full deferment |
Full deferment |
Full deferment |
|
Deferment period |
Full deferment while in school and for six months after graduation or leaving school, or 36 months for allopathic and osteopathic medical students |
Full deferment while in school and for six months after graduation or leaving school, or 36 months for allopathic and osteopathic medical students |
Full deferment while in school and for six months after graduation or leaving school |
|
Co-signer option/release |
Can apply with co-signer, and request to release a co-signer after 24 to 48 consecutive, full payments |
Not offered |
Not offered |
|
Savings opportunities |
0.25% autopay discount
0.25% interest rate reduction for prior Wells Fargo student loan customers and Wells Fargo checking account holders; or, 0.50% discount for Portfolio by Wells Fargo customers |
0.25% autopay discount
0.25% interest rate reduction for prior Wells Fargo student loan customers and Wells Fargo checking account holders; or, 0.50% discount for Portfolio by Wells Fargo customers |
0.25% autopay discount
0.25% interest rate reduction for prior Wells Fargo student loan customers and Wells Fargo checking account holders; or, 0.50% discount for Portfolio by Wells Fargo customers |
*Rates as of 7/2/2018. The low rate includes APR discounts, the high rate does not
^Variable-rate loans are capped at 18% APR.
What it takes to qualify with Wells Fargo:
|
|
|
|
|
|
|
|
|
|
Career and community college |
Undergraduate |
Parent |
Graduate |
MedCAP® Alternative Loan |
MedCAP-XTRA® Loan |
Bar Exam Loan |
|
|
Credit score |
No minimum credit score requirement |
No minimum credit score requirement |
No minimum credit score requirement |
No minimum credit score requirement |
No minimum credit score requirement |
No minimum credit score requirement |
No minimum credit score requirement |
|
Age requirement |
The borrower must be the age of majority (often 18) or older at the time of the application, or have an eligible co-signer. |
The borrower must be the age of majority (often 18) or older at the time of the application, or have an eligible co-signer. |
The borrower must be the age of majority (often 18) or older at the time of the application, or have an eligible co-signer. |
The borrower must be the age of majority (often 18) or older at the time of the application, or have an eligible co-signer. |
The borrower must be the age of majority (often 18) or older at the time of the application, or have an eligible co-signer. |
The borrower must be the age of majority (often 18) or older at the time of the application. |
The borrower must be the age of majority (often 18) or older at the time of the application. |
|
School/state eligibility |
Available in every state.
Check school eligibility by starting an application and searching for the school’s name. |
Available in every state.
Check school eligibility by starting an application and searching for the school’s name. |
Available in every state.
Check school eligibility by starting an application and searching for the school’s name. |
Available in every state.
Check school eligibility by starting an application and searching for the school’s name. |
Available in every state.
Check school eligibility by starting an application and searching for the school’s name. |
Available in every state.
Check school eligibility by starting an application and searching for the school’s name. |
Available in every state.
Check school eligibility by starting an application and searching for the school’s name. |
How Wells Fargo compares to other lenders
It’s always a good idea to compare lenders before taking out a loan, as each lender or loan option may have its pros and cons. Wells Fargo stands apart from some of the competition with its variety of loans for students pursuing different types of degrees.
The career and community college loan, in particular, stands out, as other lenders may offer the same loan to undergraduates pursuing an Associate’s or Bachelor’s degree, or may only offer loans to students who are in a Bachelor’s degree program.
Unfortunately, Wells Fargo doesn’t offer a lot of options with loan terms or repayment plans within each loan type. Even so, it’s worth considering Wells Fargo. Just keeps these advantages and drawbacks in mind as you proceed.
Advantages of Wells Fargo Student Loans
Two potential discounts. As with its private student loans, Wells Fargo offers borrowers two potential interest rate discounts. You can get a 0.25% interest rate discount for signing up for autopay.
If you or your co-signer are an existing Wells Fargo student loan or consumer checking customer before submitting an application, you can get a 0.25% interest rate reduction on your consolidation loan. If you or a co-signer have a Portfolio by Wells Fargo account, you can alternatively get a 0.50% interest rate reduction.
Co-signer release. If you apply for refinancing with a co-signer, you can apply to release the co-signer after making 24 consecutive full payments (after 48 payments if you missed the first payment on your consolidation loan).
Deferment and forbearance options. Wells Fargo offers a variety of loan deferment, forbearance and hardship options that can help keep you from defaulting on your loans. For example, you may be able to postpone payments for up to three years if you volunteer with a public service organization. Your loan payments could also be deferred following a natural disaster, and you can apply for temporary repayment relief if you lose your job or have to deal with unexpected medical bills.
Death and disability discharge. If the primary borrower dies or becomes permanently and totally disabled, Wells Fargo will forgive the remaining loan balance. This can help a co-signer, who would otherwise have to repay the debt, and the borrower’s beneficiaries.
A dedicated representative. Wells Fargo assigns a student loan specialist to borrowers, meaning you can call or email the same person if you have questions or problems in the future.
Drawbacks of Wells Fargo Student Loans
Few loan term options. Aside from the consolidation loan and MedCAP Alternative Loan, each of Wells Fargo’s student loans only offers one loan term option, ranging from 12 to 20 years. Borrowers can benefit from having choices. A shorter term could save you money, while a longer term could lower your monthly payments.
No soft credit check pre-approval. Some lenders let you see approximate loan terms with a soft credit check, which doesn’t hurt your credit score. Wells Fargo uses some basic information to let you know if you’ll qualify for a student loan, but doesn’t show you loan offers until after a hard credit check.
A checkered past. Wells Fargo has dealt with several scandals recently, and its student loan division isn’t above the fray. In 2016, the Consumer Financial Protection Bureau (CFPB) forced Wells Fargo to pay over $4 million in fines and student aid relief. The CFPB allegations include claims that Wells Fargo failed to provide important payment information to borrowers, charged borrowers illegal fees and didn’t correct mistakes in borrowers’ credit reports.
Refinancing student loans through Wells Fargo
Wells Fargo offers student loan refinancing in addition to its student loans. When you refinance student loans, you take out a new student loan and use the money to pay off your existing loans. Wells Fargo manages the consolidation process and will make the payments to your current lenders.
Your new loan’s interest rate can depend on the lender, your credit and your current income and debts. As a result, refinancing your loans could result in you getting a lower interest rate on your student loans, and save you money. Consolidating loans can also make it easier to manage the repayment process, as you won’t have to keep track of as many loans.
Wells Fargo Consolidation Loan in a nutshell
|
|
|
|
|
|
|
|
|
Fixed APR Range** |
Variable APR Range**^ |
Loan terms offered |
Loan amount |
Co-signer option/release |
Savings opportunities |
|
|
Consolidation Loan |
5.24 to 9.49% |
4.49 to 9.24%* |
15 or 20 years |
$5,000 to $250,000 |
Can apply with co-signer, and request to release a co-signer after 24 to 48 consecutive, full payments |
0.25% autopay discount
0.25% interest rate reduction for prior Wells Fargo student loan customers and Wells Fargo checking account holders; or, 0.50% discount for Portfolio by Wells Fargo customers |
Advantages
The primary advantages of a Wells Fargo consolidation loan are the same positive features that it offers on its other student loans: two potential discounts, a co-signer release option and death or disability discharge.
As with the other student loans, there also aren’t any application, origination or prepayment fees.
Disadvantages
Can’t refinance federal student loans. Some student loan refinancing companies let you refinance federal and student loans together. Refinancing federal student loans isn’t always a good idea, but it can be beneficial for some borrowers. Unfortunately, Wells Fargo doesn’t give you this option and you can’t include federal loans in a Wells Fargo Consolidation Loan.
Only two loan terms. Wells Fargo offers variable- and fixed-rate consolidation loans, but you can only choose between 15- and 20-year terms. Other lenders offer shorter-terms, which may raise your interest rate but can also help you get a lower interest rate.
How to qualify
To qualify to consolidate your student loans with Wells Fargo, you:
- Must be a U.S. citizen, U.S. national or permanent resident.
- Be the age of majority or older at the time of application.
- Can’t include federal student loans.
- Have at least $5,000 in student loans, and each loan must have a balance of at least $1,000.
- You can’t have more than $250,000 in education-related debt, or request to consolidate more than $120,000.
- Must meet Wells Fargo’s credit, employment and debt-to-income requirements.
- When added, co-signers must also meet the credit and citizenship requirements.
What Borrower is Wells Fargo best for?
A Wells Fargo student loan could be a good fit for someone who’s already looking for a loan with a term that matches its offering and can’t find a lower rate elsewhere. If you’re also likely going to need, or want, a co-signer, Wells Fargo co-signer release opportunity also makes it an appealing lender, although other lenders offer a similar service.
The career and community college loan could also be appealing to students who are pursuing an associate’s degree, technical certification or returning to school for a career-training program. However, as with all types of student loans, look for and compare offers from other lenders.
Taking a closer look at the online platform
You can apply for a Wells Fargo student loan over the phone, online or via a mobile device. If you apply online, you can upload the required documentation and complete the process without having to go into a branch.
In general, each loan’s webpage is easy to browse and offers most of the information borrowers need to know to make an informed decision. The application process is also straightforward, with helpful instructions and clarification points.
One aspect that was a little disconcerting is that you need to share your Social Security number when you start the application. Wells Fargo says it needs the number to verify your identity and run your credit.
We proceeded, because we knew that Wells Fargo needs permission to run a credit check with a hard inquiry (which could hurt your credit score), and we hadn’t yet given our permission. However, it could be unclear to other applicants if Wells Fargo will do a hard inquiry check now, or later in the application process.
The fine print
Digging into a bit of the fine print, there are a few details you may want to keep in mind if you’re considering a Wells Fargo student loan.
Co-signer release requirements. You can apply to release a co-signer after making 24 consecutive scheduled full monthly payments if you made your first payment on time. But if your first payment is late, you’ll have to make 48 consecutive scheduled full monthly payments before applying.
In addition, the primary borrower has to be eligible to take on the loan based on his or her citizenship status, credit, employment and income.
Maximum loan amounts. Aside from the consolidation loan, Wells Fargo’s student loans have a minimum loan amount of $1,000. Your maximum loan amount may be your cost of attendance (including tuition, fees, rent, books and other necessary supplies) minus other financial aid. However, Wells Fargo also has aggregate loan limits for borrowers’ total education-related debt. Meaning, your loan limit could be lower if you already have federal or private student loans.
What to expect during the application process
The details in the steps below are for an undergraduate student loan application being filled out by the student, not a co-signer. But other loan types follow a similar process. In fact, the starting page is the same for every loan.
The loan process is broken into four parts: completing your application, submitting supporting documentation, signing the loan documents and receiving the funds.
However, before you get to the actual application, you’ll have to fill out some basic information to see if you’ll qualify for a student loan from Wells Fargo based on your school, grade level, field of study and citizenship status.
Before Starting Your Application
Select your loan type. Choose whether you need a loan for technical/trade/continuing, undergraduate, graduate or consolidation purposes.
School and student information. Select <student>, and find the school based on its state and name. If the school’s name doesn’t appear in the list when you start typing, Wells Fargo may not offer student loans for that school.
Now choose the grade level that the loan will help cover, your field of study and your citizenship status.
Your Student Loan
The next page will tell you if you qualify for that loan type at that school. If you don’t qualify, you may see a message suggesting a different loan type (such as a Wells Fargo Student Loan for Career and Community Colleges) with information about that other loan. Or, you may find that you don’t qualify for any Wells Fargo student loans and should contact your school’s financial aid office to discuss other options.
If you do qualify so far, you’ll find an overview of the loan type you’re applying for with information about the repayment process fees, interest rate ranges and loan limits. If you wish to continue, scroll to the bottom and click <Get Started>.
1. Getting Started
The first page shows the steps in the student loan process, lists information you’ll need to complete the application and asks for some basic personal information: your state of residency, name, Social Security number and date of birth. You’ll also have to agree to let Wells Fargo contact you by phone or email to continue the application process.
If you already have a Wells Fargo online account, you can log in and your information will automatically get added to the application.
2. The Student Loan Application
On the second page, you’ll cover the following:
Contact information. Including your phone number, email address, permanent home address and how long you’ve lived at that address.
Employment information. If you want to include verifiable income with your application, you’ll select yes and then choose an employment status.
Whether you’re employed or self-employed, you’ll be asked to share the company’s name, city, state, phone number and how long you worked there.
Retirees and unemployed individuals with other sources of income can choose an income type (or select other and indicate the income’s tax status).
You’ll also have to list your gross income, it’s frequency (monthly or annually), your residence status (rent, own, dorm, live with parents or other) and your monthly mortgage or rental payment amount.
Loan information. Fill out your anticipated graduation date, the academic period you need the loan to help cover and your degree. Also, estimate the total cost of attendance and financial aid for that term. You can then request a loan amount, as long as it meets the minimum loan amount requirement.
Additional individuals. If you want to add a co-signer, you list his or her name and email address. You can either fill out the application with the co-signer, or email instructions to him or her, or to yourself, for how the co-signer can complete the application later.
Confirm documents are readable. You’ll be asked to open a PDF and transcribe the number you see in it, to verify that you’re able to review documents from Wells Fargo.
Disclosures. The final step is to review the loan disclosure form. The PDF will list your APR ranges, fees, the interest rate cap on variable-rate loans and give examples of how your repayment plan could impact your overall cost of borrowing.
At this point, you’ll also have to give Wells Fargo permission to verify your information and pull your credit, which could hurt your credit score.
3. Review your loan, verify documents and sign the promissory note
Not wanting to proceed with the loan application process and potentially hurt our credit, we stopped our application at the previous step.
However, Wells Fargo does share what’s involved with the next steps. The entire process can take two to three weeks, and you can manage and track it with the yourLoanTracker app.
Once you submit your application and are approved, you may need to provide verification documents for the information you submitted earlier. These could include things like a pay stub or tax return as proof of income.
After Wells Fargo receives all the required verification, it will request several additional documents.
You, and a co-signer, must sign a consumer credit agreement. You must also sign a self-certification form, where you indicate your cost of attendance, estimated financial aid and the difference between the two. Wells Fargo could also contact your school to verify the financial information and to confirm that you’re enrolled.
Wells Fargo will then send you the official loan offer and Final Loan disclosure. Your offer is locked in for 30 days, giving you time to shop around for other student loan offers. If you accept the loan, Wells Fargo will send the money directly to your school.
Category: Refinance
LendKey Student Loan Refinancing Review
LendKey student loan refi in a nutshell
How LendKey compares to other lenders
What to expect during the application process
How to compare student loan refi offers
Many private lenders, including large traditional and small community banks, credit unions and alternative online lenders, offer student loan refinancing. When you refinance your loans, the lender pays off your current balances and issues you a new loan — ideally, you wind up with a lower rate or better terms than you had.
Refinancing can be a helpful, money-saving choice. In addition, if you’re consolidating multiple federal student loans into one, that strategy can make managing monthly payments easier.
However, if you refinance federal student loans with a private lender, you may lose out on certain federal benefits, so consider the pros and cons carefully. You’ll also want to shop for lenders, as your new loan’s terms, interest rate and other features will vary based on your creditworthiness and your choice of lender.
Gearing up to offer student loan refinancing can be difficult for small community banks and credit unions, while, from your perspective, finding and comparing offerings from regional financial institutions can take a lot of time. LendKey, founded in 2009 after the arrival of the Great Recession, aims to solve both of these problems.
What is LendKey?
LendKey isn’t a lender. Rather, it’s a cloud-based platform that community banks and credit unions can use to quickly and easily offer student loans and student loan refinancing. You can apply for student loan refinancing through LendKey and compare offers from community banks and credit unions.
The money you borrow comes from the bank or credit union, and each lender may have its own criteria for applicants. However, LendKey services the loans and manages much of the loan application process, ensuring that you only see offers from lenders that operate in your area.
As of Sept. 7 of this year, LendKey had more than 275 financial institution clients. Although they may not all offer student loan refinancing or be available in your area, being able to quickly find and compare offers from a variety of small lenders can be advantageous to borrowers.
LendKey student loan refi in a nutshell
| Fixed APR range* | Starting at 5.10% with autopay. |
| Variable APR range* | Starting at 2.68% with autopay. The variable-rate cap depends on the lender and will be listed in the loan disclosure form. |
| Loan terms offered | Five, seven, 10, 15 or 20 years |
| Fees | No origination fees, but you may need to pay a small fee to become a member of a credit union before refinancing your loans with it.
There may be late-payment fees, such as 5% percent of the unpaid amount, and returned check charges, such as $10-$25 per returned check. |
| Loan amount | The limits vary depending on the lender. |
| Repayment plans | Interest-only for the first 48 months if you choose a 15- or 20-year repayment term. Or, you can start full interest and principal payments at the outset with any of the repayment terms. |
| Co-signer release | Most lenders let you release a co-signer after making a series, such as 12, 24 or 60, of on-time full principal and interest payments. You also must pass a credit check and meet the lender’s income requirements. |
| Savings opportunities | You can get a 0.25% interest rate discount if you set up automatic debit payments. |
| Additional features | Most of the lenders let you put your loans into forbearance for up to six months at a time, for a total of 18 months over the loan’s lifetime, if you lose your job. |
*As of February 6, 2019
What it takes to qualify:
| Credit score and income | The minimum credit score varies by lender, but is often in the mid-600s, according to a LendKey representative. You must also make at least $24,000 per year. |
| Loan types | Private and federal student loans for associates, undergraduate and graduate degrees.
Parent loans, LSAT, MCAT, GRE and other exam-preparation loans are not eligible. |
| School and state eligibility | You must graduate with an associates, undergraduate, graduate or doctorate degree. The eligible-schools list varies by lender.
Refinancing is not available to residents of Maine, Nevada, North Dakota, Rhode Island or West Virginia. |
How LendKey compares with other lenders
The lenders in LendKey’s network may offer lower interest rates than other student loan refinancing companies. But even though there are many lenders in its network, it’s still important to compare offers from multiple places. Generally, as with so many types of loans, you’ll need higher credit scores to get the premium rates with any student refi lender.
A LendKey representative told us that borrowers with credit scores in the mid-600s should be able to qualify for most refi offers from its network of lenders. You’ll also need a minimum annual income of $24,000, which is in line with other lenders, including Citizens Bank, iHelp Student Loans and EdvestinU.
There are a few features that every LendKey lender offers, such as a 0.25 percent interest rate discount when you use autopay, and no origination fees. Both of these are fairly standard with student loan refinancing, but are still worth noting, especially if you’re comparing offers from other lenders that may not offer a discount or charge an origination fee.
With LendKey, you can also choose from five different loan terms: five, seven, 10, 15 or 20 years, and between a fixed- or variable-rate loan. That’s not an unusual range, but some other lenders may offer fewer loan term options, such as only 10, 15 or 20 years. Some lenders also only offer one interest rate type, although many offer both fixed- and variable-rate loans.
You can’t refinance your student loans through LendKey if you didn’t earn a degree, a requirement that some lenders don’t impose. For example, you can refinance at Citizens Bank without a degree if you make 12 full on-time payments on the loans you wish to refinance and meet its other eligibility criteria, including no longer being enrolled in school.
A few of the features that really stand out are available from most, but not all, lenders in the LendKey network. These include a graduated repayment option, which lets you make interest-only payments for the first four years if you choose a 15- or 20-year repayment term.
While making interest-only payments can lead to higher monthly payments later, it may be a good option if you want to lock-in a low interest rate now (because you think interest rates may rise) but can’t afford a high monthly payment at the moment. You can still make larger payments and pay down the principal during these four years if you want. Student loans don’t have prepayment penalties.
Lengthy loan forbearance. You may be able to delay payments for up to 18 months, in six-month increments, if you lose your job. Other lenders offer similar forbearance options, but generally not for as long. Since your loan will still accrue interest when it’s in forbearance, this could increase your overall cost of borrowing. But it’s still a better option than missing payments, which could hurt your credit and result in you defaulting on the loan.
Advantages of refinancing with LendKey
Easily compare prescreened offers. LendKey lets you check and compare loan offers with a soft credit inquiry, which doesn’t hurt your credit score. You’ll only see offers from eligible lenders based on your address, degree type, loan amount and loan types. The offers may depend on these factors, as well as your income and credit, and they’re contingent on a hard-inquiry credit check and verification of your information.
You can easily sort your loan offers by annual percentage rate (APR), monthly payment or number of payments (the term), and filter the offers by APR, monthly payment, terms and interest rate type.
Most LendKey lenders offer a co-signer release option. If you’re applying for refinancing with a co-signer, you may be able to release the co-signer and take complete responsibility for the debt after as few as 12 consecutive full payments.
Repayment plan options. Some lenders let you choose a four-year interest-only repayment plan if you take out a 15- or 20-year loan.
Lengthy loan forbearance. You may be able to delay payments for up to 18 months, in six-month increments, if you lose your job.
No origination or application fees. It doesn’t cost anything to refinance your loans through LendKey. However, you may need to pay a small fee to become a member of a credit union before refinancing your loans with it. There also may be late-payment fees, such as 5% percent of the unpaid amount, and returned check charges, such as $10-$25 per returned check.
Combined federal and private loans. Some of LendKey’s lenders let you refinance federal and private students loan into a single new loan. While you’ll lose some federal benefits when you do, if you’ve decided the refinancing is right for you, then such consolidation can be helpful.
Disadvantages of refinancing with LendKey
Rates may vary depending on where you live. While LendKey has some of the lowest advertised interest rates, even if you have excellent credit and little debt you might not be able to get the low rate. The advertised rate on LendKey is the lowest possible rate among all of its lenders, and some lenders are only available to residents of specific areas.
Lack of filters when comparing offers. While it’s easy to compare offers during the prescreening, you can only filter the loans based on annual percentage rate, monthly payment, term and type of rate.
Other features may be important to you, such as a graduated repayment plan, 12-month co-signer release, forbearance options or a high loan limit. To compare these, you’ll need to select a loan offer to view the lender and either contact the lender directly or review the loan disclosure form (available on the following “submit your application” page).
Only available in select states. You won’t be eligible for refinancing through LendKey if you’re a resident of Maine, Nevada, North Dakota, Rhode Island or West Virginia.
You can’t refinance parent loans or test-prep loans. Some lenders, such as SoFi, let you combine loans that your parents took out to pay for your education with your student loans. LendKey’s lenders may let you combine your federal and private student loans, but you can’t include parent loans. You also can’t include loans you took out to prepare for a test, such as the LSAT or MCAT.
You must earn your degree to qualify. If you took out a student loan and attended school, but left before earning a degree, you won’t be able to refinance through LendKey.
What customers is LendKey best for?
Comparing offers from a variety of lenders is a good way to ensure that you get the best rate and terms possible. LendKey lets you quickly see offers from community banks and credit unions that you might not otherwise know about or think to check.
Since LendKey’s prescreening process is quick and easy and doesn’t hurt your credit, anyone who’s meets the minimum credit, loan type, degree and residency requirements should at least take it for a spin.
Taking a closer look at the online platform
It’s easy to find and apply for refinancing on the LendKey website. The student loan refinancing home page lists interest rate ranges, has a video and snippets explaining the potential benefits of refinancing with LendKey, and offers informational articles about refinancing student loans.
However, it can be difficult to find specific information about LendKey’s loan terms and eligibility requirements. SimpleTuition had to reach out to a press representative to clarify potentially important information, including where LendKey offers student loan refinancing and whether benefits like a co-signer release are available from all lenders.
Some of these points may not be important to you. LendKey screens out ineligible lenders and if your loan amount is too low or high, or you don’t meet other loan requirements for lenders in your area, you’ll get a screen that says no offers are available.
Still, it would be helpful to have a page that clearly lists general qualification requirements, benefits and other terms.
Those quibbles aside, the online platform is easy to navigate and very responsive. After filling out a simple questionnaire, you typically be able to compare and filter loan offers based on several criteria, including the loan terms and APR. You could apply for refinancing in a few minutes, although it’s best to take your time, compare lenders and read the fine print first.
About that fine print …
Reviewing fine print before signing a contract is always important, but it may be especially important when you’re refinancing a student loan with LendKey. While the basic features, such as the interest-rate type, APR and term are easy to see, other features and benefits depend on the lender.
You have to start the lending process through the prescreen, but that doesn’t commit you to refinancing with LendKey. You may want to submit the application information, narrow down your options to the few loan offers that have the lowest APRs (and fit your term and interest rate type preferences) and then review the fine print for those lenders.
An option to filter loan offers based on features, such as the number of consecutive payments you need to make to release a co-signer, would be helpful. Instead, you need to choose a loan offer before you can see which lenders offer these terms, then research the fine print for that lender on your own.
You can find some information, such as the loan’s fees, interest rate cap for variable-rate loans and interest rate reduction terms, near the top of the loan disclosure form, which is available near the bottom of the application submission page.
However, the loan disclosure may not show when and how you can release a co-signer or if a particular lender offers interest-only repayments. You could call the lender or LendKey to find out the specifics.
Alternatively, if you search the lender’s name, “refinancing” and “partner.lendkey.com,” you should find the website for refinancing student loans through the bank or credit union. The page will have the lender’s interest rate ranges, loan features and eligibility requirements.
What to expect during the application process
The loan application process begins when you click the “check your rate” button, which prompts you to choose whether you’re applying for a new loan or want to refinance. (If you’re on the student loan refinancing page, you might not see this popup.)
Fill out the application
To proceed with the application, you’ll have to share:
- Your name, address, email address and phone number
- Your citizenship status
- Your total annual income
- The school you graduated from and the type of degree you earned.
- The estimated total loan amount you want to refinance and the loan type or types
If you don’t think you’ll qualify for refinancing due to your credit, or you want to add a co-signer to see if you’ll get better terms, you’ll also need to include a co-signer’s information.
You don’t need to put in your Social Security number, although you do need to be a U.S. citizen or permanent resident. At this point, your credit will only be checked with a soft credit pull, which doesn’t hurt your score.
Compare loan offers
After submitting your application, you’ll generally see the results within 30 seconds. The number of results you’ll get depends on the information in your application, including where you live and what types of loans you have.
You can narrow down the results by filtering for an APR range, monthly payment range, loan terms or interest rate type, and sort the results by APR, monthly payment or number of payments.
Choose a lender
Once you’ve determined which loan offer is best for you, clicking on “select and continue” will show you which banks or credit unions could refinance your loans with these terms. You can switch between lenders that offer the same loan terms. Or, you can go back to the list of all the offers by clicking “reselect offer.”
Click “confirm” once you’ve decided on the terms and chosen your preferred lender.
Submit an application
The next step is to submit your application and authorize the lender to do a hard credit inquiry, which could ding your credit. You’ll need to enter your Social Security number and date of birth. You’ll also have to create an account, which allows you to log in and submit required documents or check your loan status later.
Review the loan disclosure form before submitting your application. If you might want to release a co-signer, use a graduated repayment plan or put your loans on hold after losing a job, you may want to contact the specific lender to check if it offers these benefits.
Review the conditional loan offer
Once you submit your application, LendKey will review your credit and conditionally approve you for a loan. The terms may be different than the original offer you saw, so be sure to review them before proceeding.
Verify your information
If you want to move forward with the loan offer, you’ll need to verify your information. For example, you could upload copies or pictures of pay stubs to verify your income, a picture of your diploma to show you earned a degree and a picture of a government-issued ID to prove your citizenship status.
Final approval and loan disbursement
LendKey will forward your information to the lender, who will then send back the official loan document for you to sign. Once you do, the lender will pay off the student loans that you’re refinancing and you’ll begin making payments toward the new loan.
These finals steps may take a few weeks. Make sure you continue paying your student loans until the process is complete.
How to compare student loan refi offers
While LendKey makes it easy to compare loan offers from community banks and credit unions, you may also want to consider refinancing with a traditional bank, alternative lender or a community bank or credit union that’s in your area but isn’t part of the LendKey network.
Other lenders may offer you a lower interest rate, more-fitting terms or additional features that you think will be beneficial. For example, SoFi lets you refinance your student loans with a parent’s educational loans. Also, while SoFi has shorter three-month (12-month maximum) unemployment forbearance options than some LendKey lenders, if you lose your job, you’ll get free access to a career counselor who can help you find work.
You may also need to use a different lender to refinance your loans if you don’t qualify because you didn’t earn a degree or don’t live in an eligible state. You could use SimpleTuition to compare student loan refinancing lenders and terms. As with LendKey, some of these lenders will show you refinancing offers based on a soft credit check.