8 Best Banks to Refinance Your Student Loans

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Student loans in America account for more than $1 trillion of personal debt. They’re issued with little regard when a student applies because students don’t have work histories and credit histories; the idea is that the lender is betting that you’ll be able to pay when you graduate and get a great job. The trouble is that this is a risky strategy – many students don’t get great jobs when they leave college. This in turn means that lenders tend to charge higher interest rates on loans to cover these risks.

If you’re out in the world of work and you do have a good job – it might be time to think to refinance student loans. Now that you’ve established a credit history and work history; you may well find that you can get a much lower rate of interest on your refinanced loan. That’s because you are now considered to be much less of a risk of going into default.

You have plenty of options for refinancing personal loans through banks but we’ve rounded up 8 of the best based on the interest rates they charge and their reputation in the market.

SoFi – Social Finance

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SoFi was one of the first lenders to begin helping students refinance their loans. When they started, they focused their refinancing packages on elite universities and their graduates but today nearly anyone can refinance with SoFi.

To get a loan from SoFi you will need: to have graduated, to be in a good job and demonstrate a reasonable income. The good news is that SoFi take their responsibilities to their loan holders seriously for example; they help their customers who lose their jobs find new positions. They are also a great place for student loans holders to apply for a mortgage. One of the nice perks of a SoFi loan is invitations to parties for their customers which are held regularly nationwide.

Rates: Variable Rates starting at 2.2% and Fixed Rates starting at 3.5%

CommonBond

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CommonBond’s entry into student loans refinancing had them concentrating their efforts on doctors and only those with more than $100,000 in debt. Today, they offer refinancing on a much broader basis and their rates are highly competitive. If you’re a graduate or even an undergraduate of most universities you’ll qualify for a CommonBond loan. A nice touch of the CommonBond program is that for every loan they make; they fund the education of somebody in a developing nation.

Rates: Variable Rates starting at 2.14% and Fixed Rates starting at 3.5%

LendKey

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LendKey isn’t quite a bank. It works by partnering with local community banks and credit unions across the U.S. So if you’re accepted for one of their refinancing deals; your loan will be held with a community banking project. They didn’t use to have the best rates but now they’re very competitive.

Rates: Variable Rates starting at 2.14% and Fixed Rates starting at 3.25%

First Republic Eagle Gold

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The rates offered by First Republic Eagle Gold are nearly unbeatable but sadly, there’s a catch – you can only access a refinancing loan from them if you appear at a branch in person. They’ve got branches in San Francisco, Los Angeles, Palm Beach (Florida), Boston, Greenwich, New York City, and a few other locations. If you want a loan be aware that you must borrow a minimum of $60,000 and can only borrow a maximum of $300,000 and you’ll need a credit score in excess of 750 and at least 2 years work experience in your current industry.

Rates: Variable Rates starting at 1.87% and Fixed Rates starting at 1.95%

Earnest

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Earnest allows a bit more flexibility when it comes to managing your loans; you can switch between their fixed and variable rate packages whenever you like during the period the loan (though only one time in every 6 months). That’s pretty handy because it means you can take advantage of periods, like now, when interest rates are really low and then lock in a rate when you think that interest rates are about to climb. They also provide a choose your own repayment service where you establish exactly what amount (to the penny) that you are prepared to pay each month. Finally, there’s also the facility to skip a month’s payment without damaging your relationship with Earnest if you’re having a bad month.

Rates: Variable Rates starting at 2.2% and Fixed Rates starting at 3.5%

CollegeAve Student Loans

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A little more expensive than our other options CollegeAve are a well-respected refinancing company and they can make a decision in 3 minutes if you apply online. They allow you to take a 2-year interest only payment option as well as being willing to finance relatively small amounts (as low as $5,000) that other lenders might not be willing to take on.

Rates: Variable Rates starting at 2.5% and Fixed Rates starting at 4.74%

Purefy (CordiaGrad)

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CordiaGrad is now Purefy and is a specialist bank which offers refinancing for both undergraduate and graduate loans. Their rates aren’t as competitive as some of the banks on this list but they are a small bank which delivers personal service. It’s worth noting that they will refinance Parent PLUS loans which most banks won’t.

Rates: Variable Rates starting at 3% and Fixed Rates starting at 3.95%

Citizens Bank

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Citizens Bank offers refinancing loans but their best deals are for those with Bachelor’s degrees or higher. They take a careful look at your current loan and you will need to have made at least the last 3 repayments on time (12 if you’re not a graduate). There’s a minimum salary qualification too of $24,000. You can apply online in 15 minutes and get a decision for any loan value over $10,000.

Rates: Variable Rates starting at 2.19% and Fixed Rates starting at 4.74%

Last Thoughts on Refinancing Loans

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Refinancing is not always the best option for someone with student loans debt; while it can help you reduce the monthly payments – it may also exclude you from federal programs that are designed to help those in the direst of need.

You should also consider the following:

  • What’s the up-front origination fee? If you intend to clear your debt early – this fee can be a problem in the long run.
  • Variable rates represent a significant risk. For those intending to clear their debts early they can be really good value but over 20-25 years the interest rates might go up substantially.
  • Federal student loans should be refinanced very carefully; if you convert one into a private loan you give up the strong protections on these loans such as income-based repayment (IBR) programs.

This is a guest post from the editors at Refinance Student Loans