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13 Best Student Loan Refinance Companies in 2021

Accumulating student debt could affect your eligibility for other loans, including a mortgage. In this case, you need to employ strategy and tools to stay safe. However, refinancing student loans will help you manage your payments and save money. Therefore, in this article, we will show you the 13 Best student loan refinance companies in 2021.

This post contains an in-depth explanation of the differences between Loan consolidation and loan refinancing, the advantages, disadvantages, differences, and similarities of each. Also, a clear insight into which options are best for different situations.

Table of Contents Hide
  1. What is Student Loan Refinancing?
  2. How Does Student Loan Consolidation and Refinancing Work?
  3. Federal Student Loan Consolidation
  4. Private Student Loan Refinancing
  5. What are the Similarities and Differences between Consolidation and Refinancing?
    1. Student loan consolidation
    2. Student loan refinancing
  6. How to Refinance private student loans
  7. How Can I Qualify for Student Loan Refinancing?
  8. What Are the Advantages of Student Loan Refinancing?
    1. Federal Student Loan Consolidation Benefits
    2. Private Student Loan Refinancing Benefits
  9. Disadvantages of Student Loan Refinancing
    1. The downside of Federal Consolidation
    2. The Downside of Private Student Loan Refinancing
  10. List of Top 13 Student Loan Refinance Companies
    1. Earnest Student Loan Refinance
    2. Wells Fargo Student Loan Refinance
    3. SoFi Student Loan Refinance
    4. PenFed Student Loan Refinance
    5. Laurel Road Student Loan Refinance
    6. Education Loan Refinance
    7. CommonBond Student Loan Refinance
    8. Prodigy Student Loan Refinance
  11. Citizens Bank
    1. LendKey
    2. Splash Financial
    3.  Earnest
  12. MEFA
  13. Conclusions
  14. Reference
  15. We also recommend the following:
  16. Frequently Asked Questions
    1. How can I get rid of student loans legally?
    2. Can student loans check your bank account?
    3. Can you switch your student loan servicer?
    4. Can a bank take over my student loans?
    5. Can I refinance my Federal loan?
    6. Do student loans go away after 7 years?
    7. What credit score do I need to refinance student loans?
    8. How can I refinance my student loans?
    9. How can I lower my student loan interest rate?
    10. What are the risks of student loan refinancing?
    11. Is variable or fixed rate better?

What is Student Loan Refinancing?

Student loan refinancing allows you to adjust the interest rate and repayment terms on your private and federal student loans. Basically, it permits you to combine multiple loans into a brand new loan that pays off some or all of your existing education debt.

However, this is done to consolidate your loans into a one-time monthly payment and to lower your interest rate. refinancing can help you save thousands and finish paying off your loans earlier If you qualify for a good offer.

The interesting part is the opportunity to save money. student loan refinancing helps you to replace all of your existing student loans with a new loan with new terms.

Also, you may have to release cosigners on your existing loans eliminating them from any liability for your loans.

In addition, If you qualify for a lower interest rate or reducing the payback period of the new loan, you could save thousands in interest over the life of the loan. As a borrower, you can refinance your loans through a number of private lenders.

How Does Student Loan Consolidation and Refinancing Work?

Student loans can come from the federal government through the U.S. Department of Education or a private agency, such as a bank, credit union, and the educational Body.

Basically, when you consolidate or refinance your student loans, you have combined multiple loans into one.

However, a lender will pay off your current loans before issuing you a new loan for the total amount you owe.

Your consolidation and refinancing option may vary depending on whether you have federal student loans, private student loans or a combination of the two.

Federal Student Loan Consolidation

The Direct Loan Consolidation program is a free option offered for federal student loans.

Federal student loan consolidation is a combination of multiple federal loans into a single federal loan through the Department of Education.

This type of consolidation won’t save you money on interest and will not lower your interest rate but it can make it easier to manage your loans with a single payment each month.

If you extend your loan terms, you will have a lower monthly payment. Federal loan consolidation doesn’t involve a credit check.

In addition, you may lower your monthly payment and there could be other benefits, such as being eligible for more repayment plans or forgiveness programs.

Private Student Loan Refinancing

A private student loan refinancing allows you to repay your student loans, which may include private and federal loans. The lender will issue a new loan based on your creditworthiness.

Apparently, you may be able to save money and lower your monthly payment by refinancing your student loans with an interest rate reduction.

However, federal loans will become private loans when you refinance and will no longer be available for federal programs, including income repayment plans and forgiveness programs.

In addition, income, debts, and employment are the refinancing terms for your new private student loan.

Finally, you can consolidate your federal student loans and refinance your private loans, or consolidate some of your federal loans and refinance others.

What are the Similarities and Differences between Consolidation and Refinancing?

The student loan consolidation is divided into federal and private. Private consolidation is often termed refinancing. These processes are can be very confusing, however, the similarities and differences are stated below.

Student loan consolidation

  • Combines multiple federal loans into one federal loan.
  • Cannot save money because consolidation may lower payments by extending the loan term, but your interest amount will increase.
  • Can access federal loan protections, repayment options, and forgiveness programs
  • Cannot lower rates
  • pay just one monthly bill

Student loan refinancing

  • Combines private and/or federal loans into one private loan.
  • Lowers rates.
  • Private and/or federal loans.
  • Saves money.
  • Only pays one bill monthly.

How to Refinance private student loans

Before you apply for student loan refinancing, you should consider eligibility and whether federal or private student loan consolidation is the right choice for your situation.

  • Go to StudentLoans.gov to start the consolidation process
  • Fill in your personal information
  • Choose your student loan servicer
  • Pick the loans you want to consolidate
  • Choose your repayment plan
  • Submit the application
  • Continue making payments

How Can I Qualify for Student Loan Refinancing?

There are quite a number of eligibility factors to qualify you for loan refinancing. Refinance companies use certain criteria to evaluate your qualifications. Avoid to pursue refinancing if it will end up increasing the length of time it will take to pay off your loans.

If you want to refinance your federal loans, there are downsides such as loss of repayment options, like income-driven repayment, opportunities for loan forgiveness and subsidized interest benefits. The following are the eligibility criteria to qualify for student loan refinancing.

  • Minimum of $5,000 for bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans.
  • you need good credit in the high 600s or above.
  • If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
  • A stable income.

What Are the Advantages of Student Loan Refinancing?

Student loan consolidation, both federal and private, has many potential benefits.

Federal Student Loan Consolidation Benefits

  • Potentially lower monthly payments.
  • Income-driven repayment and forgiveness. 
  • Renewed hardship options. 
  • Loan forgiveness programs. 
  • Interest rate lock. 
  • Get out of default.

Private Student Loan Refinancing Benefits

  • Private and federal refinancing
  • Save money with a lower interest rate or longer term. .
  • Choose a fixed- or variable-rate loan. 
  • Release a co-signer.
  • Move debt obligation

Disadvantages of Student Loan Refinancing

Student loan refinancing has a lot of benefits, but it is important to also take note of the drawbacks.

Kantrowitz pointed out that “Federal loan consolidation prevents you from targeting the highest-rate loan for quicker repayment”.

However, If you have private student loans, you will be unable to refinance them into a Direct Consolidation Loan. The major disadvantages of federal loan consolidation are listed below respectively.

The downside of Federal Consolidation

  • Private student loans aren’t eligible
  • Could pay more in interest
  • Loss of subsidized interest benefits
  • Can’t strategize which loans to pay off first
  • Federal loan forgiveness progress could be reset
  • Could lose forgiveness options
  • Fewer options if you default

The Downside of Private Student Loan Refinancing

Refinancing private student loans can be rigorous compared with federal loan consolidation.

However, If you have bad credit and a high debt-to-income(DTI) ratio, you may not be eligible for refinancing without a co-signer to legally take responsibility for the loan if you’re unable to meet up or repay.

In addition, you can only be eligible for a lower interest rate if you qualify. Below is the list of the major drawbacks of the private load refinancing.

  • Eligibility requirements
  • Degree requirements
  • Loss of federal loan benefits
  • Fewer options if you have trouble making payments
  • Loss of discounts or rebates
  • Potentially shorter repayment periods
  • Faster default
  • Potentially higher payments

List of Top 13 Student Loan Refinance Companies

To choose your refinancing companies, you will need to consider the fixed-rate ranges, variable-rate ranges, rate check option, minimum credit score, refinancing terms, repayment option, hardship options, and the fees.

Earnest Student Loan Refinance

Earnest was founded in 2013 and has funded more than $4.5 billion in student loan refinancing to about 50,000 borrowers. You may be approved for a loan with a debt-to-income ratio of up to 65%.

Top For Fixed APR Variable APR Min. Credit Score
Overall + MBA student loan refinancing 3.45-6.99% 2.05-6.49% 650

Wells Fargo Student Loan Refinance

Top For Fixed APR Variable APR Min. Credit Score
Overall + Student loan refinancing with no degree + Student loan refinancing with a bank 5.24-9.74% 5.24-9.74%
Does not disclose

SoFi Student Loan Refinance

SoFi has offered student loans since 2011 and has served more than 250,000 borrowers with more than $18 billion in student loan refinancing. Borrowers with a credit score as low as 650 may be qualify. You can apply for student loan refinancing online with SoFi and get an instant decision.

Top For Fixed APR Variable APR Min. Credit Score
Overall + Fast payoff + Medical school loan refinancing + Law school loan refinancing 3.46-7.94% 2.14-7.94%
650

PenFed Student Loan Refinance

The lender offers Lower your monthly payment or pay off your student loan. Also, offers fixed Rates as low as 3.48% APR and Variable Rates as low as 2.42% APR.

Top For Fixed APR Variable APR Min. Credit Score
Fast payoff + Parent loan refinancing + Customer service + Student loan refinancing with a credit union 3.48-6.03%
2.42-7.16% 670

Laurel Road Student Loan Refinance

A division of KeyBank, online lender Laurel Road has offered student loans and refinancing since 2013. Borrowers with a minimum credit score of 660 can apply.

Top For Fixed APR Variable APR Min. Credit Score
Dental school loan refinancing 3.50-7.02% 2.43-6.65%
660

Education Loan Refinance

Education Loan has offered student loan refinancing since 2015. A division of SouthEast Bank, the management team has more than 30 years of experience in student loans. The lender offers loan terms from five to 20 years.

Top For Fixed APR Variable APR Min. Credit Score
Veterinary school loan refinancing + Customer service 3.14-6.69% 2.39-6.01%
680

CommonBond Student Loan Refinance

CommonBond is one of the first student loan refinancing companies. The lender offers a unique unemployment protection program where loan payments are paused.

Also, the lender helps eligible graduates find new jobs and even hires them for short-term consulting projects. In addition, commomBond offers a minimum of 660 credit scores to borrowers.

Best For Fixed APR Variable APR Min. Credit Score
Customer service 3.21-7.24% 2.14-7.21%
660

Prodigy Student Loan Refinance

Prodigy offers a one-month grace period between graduation and your first payment to ease the pressure that comes with transitioning to work.

The lender offers variable interest rates, which start at 4% and 7 to 20 years to pay off your loan, depending on your terms.  

Best For Fixed APR Variable APR Min. Credit Score
International student loan refinancing N/A 6.56-8.65%
N/A

Citizens Bank

Citizens Bank offers a lot of great loan options, backed by the stability of a bank. The lender offers a minimum credit score of 680 to borrowers.

Best For Fixed APR Variable APR Min. Credit Score
refinancing a large loan balance 3.45%+ 2.15%+
680

LendKey

LendKey is a student loan refinancing lender that pools money from community banks and credit unions to offer well-priced student loans to borrowers.

The lender offers loans between $5,000 and $300,000, depending on the degree earned by the loan holder.

LendKey bases its rates upon your credit and discounts are given for auto-pay. They also have no origination or prepayment fees. 

Note that the lender does not allow refinancing for borrowers who didn’t graduate. However, LendKey offers $300 bonus for refinancing loans under $150,000, and a $750 bonus if you refinance loans over $150,000!

Best For Fixed APR Variable APR Min. Credit Score
Students who want to choose from multiple lenders with one application and Students who want up to 20 years for refinancing 5.36% 4.05%
680

Splash Financial

Splash Financial offers student loans with no original fees and unique repayment plans. For example, they are one of the few lenders that allow spouses to refinance together.

They offer loans between $5,000 and no maximum. They also have some of the lowest rates for qualified borrowers. 

The great thing about Splash Financial is that they offer one of the best bonuses currently available and is currently offering College Investor readers a $500 bonus if you refinance at least $50,000

Best For Fixed APR Variable APR Min. Credit Score
Physicians who need flexible refinancing terms while completing their training 3.48% – 7.02% 2.25% – 7.41%

670

 Earnest

Earnest is one of the most flexible student loan refinancing companies. Basically they offer the ability to pick any monthly payment and term between 5 to 20 years saving you more than standard rates and terms.

The lender also gives you the opportunity to change your loan and you can refinance your loan for free, change payment dates, even skip a payment once a year and make it up later.

Earnest has no set income requirements for borrowers. They also offer unemployment protection to pause your monthly payments if you lose your job.

Best For Fixed APR Variable APR Min. Credit Score
 borrowers looking to refinance their student loans without a co-signer 3.45% to 6.99% 5.99% to 17.88
650

MEFA

The Massachusetts Educational Financing Authority, known as MEFA, offers student loan refinancing and private student loans for undergrads and graduate students across all 50 U.S. states.

The lender offers loans to borrowers without a co-signer and also offers a minimum of 670 credit score.

Best For Fixed APR Variable APR Min. Credit Score
Loans without Co-signer 3.45% – 6.99% 3.33% – 5.38%
670

Conclusions

Student loan refinancing can be a safe and effective way to pay money less over the life of your loan although it’s not the best option for everyone.

However, if you can afford your loans standard repayment a10-year plan and don’t take advantage of any loan forgiveness program then you should strongly consider student loan refinancing. 

In addition, these top student loan refinancing companies especially the ones enlisted above offer great benefit. you can always visit our site from comparing your options amongst these lenders.

Reference

We also recommend the following:

Frequently Asked Questions

How can I get rid of student loans legally?

To get rid of students loan you must:

> Enroll in income-driven repayment.
> Pursue a career in public service.
> Apply for disability discharge.
> Investigate loan repayment assistance programs (LRAPs).
> Ask your employer.
> File for bankruptcy.

Can student loans check your bank account?

Federal student loans, unpaid income taxes, and wages without a court order are the only loans that can be checked out of your existing accounts.

Can you switch your student loan servicer?

You can switch student loan servicers if you consolidate. There’s no reason to make a change if you’re fine with your current servicer

Can a bank take over my student loans?

Yes, lenders can garnish a student bank account to recover a loan debt, and they can do it in different ways depending on whether your student loans are federal or private.

Can I refinance my Federal loan?

Refinancing will help reduce the interest rate on a federal student loan.
The cost savings can be worth it for certain borrowers, but for the majority of federal student loan borrowers, it may not be a good idea.

Do student loans go away after 7 years?

A defaulted federal or private student loan, older than 7 years may not appear on a credit report.

What credit score do I need to refinance student loans?

The credit score varies with different refinance companies. However, you need a good credit score to qualify for a student loan. Lenders offer minimum credit score requirements ranging from 650 to 680.

How can I refinance my student loans?

You can refinance your loans by applying and being approved at a student loan refinancing company. You typically have to have a good credit score, good debt to income ratio, and have graduated college. Most lenders will require a co-signer.

How can I lower my student loan interest rate?

You can lower your interest rate if you qualify by refinancing your student loan. The lowest interest rates are typically on variable rate loans, with shorter durations.

What are the risks of student loan refinancing?

The biggest risk of refinancing and consolidating is that you lose access to any programs which include income-driven repayment plans, deferment, and hardship options that you may have been eligible for on your original loans.

Is variable or fixed rate better?

A fixed rate is the best option for most borrowers, but a variable rate saves money if the timing is right. 

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