American education comes at a high cost, and the student loan debt in the US is a testament to that. As of the second quarter of 2023, the country’s student debt reached a staggering $1.7 trillion, surpassing even auto loan debt. With high interest rates from private lenders and even federal loan rates going above 8%, many former students struggle to make a dent in their debt.
But there is hope. Student loan refinancing offers an opportunity to consolidate multiple loans into one monthly payment, potentially at a lower interest rate or with a lower monthly payment (though this may result in more interest paid over time). With dozens of options available, let’s take a look at how some popular student loan refinancing companies stack up.
Compare Student Loan Refinancing Companies
Here are some of the top contenders in the student loan refinancing market:
- Brazos Student Loan Refinance: Available only to Texas residents, Brazos offers fixed interest rates starting as low as 4.90%. However, they have stricter credit score requirements, with a minimum of 720 for the borrower or their cosigner.
- Citizens Bank Student Loans Refinance: Citizens Bank allows borrowers to refinance up to $300,000 for undergraduate debt and up to $750,000 for professional degrees. They offer flexible repayment terms ranging from five to 20 years.
- College Avenue Student Loan Refi: College Ave offers a wide range of loan amounts, from $5,000 to $150,000 ($300,000 for certain degrees). They have flexible repayment terms and competitive interest rates.
- Discover Student Loan Refi: Discover specializes in consolidating multiple loans and offers various deferment and repayment assistance options. Their loan amounts range from $5,000 to $150,000.
- Earnest Student Loans Refi: Earnest stands out with its highly customizable repayment period, allowing borrowers to choose any term between five and 20 years. They also offer loans up to $500,000 for those with higher amounts of debt.
- Laurel Road Student Loan Refi: Laurel Road offers refinancing options for associate degree holders, with loan amounts up to $50,000. They also provide refinancing for higher degree levels without a specified maximum, making them a great option for those with higher balances.
- LendKey Student Loan Refi: LendKey not only offers student loan refinancing but also connects borrowers with banks and credit unions for lower-cost loans. They have loan amounts ranging from $5,000 to $125,000.
- PenFed Student Loan Refi: PenFed allows borrowers to enlist the help of a cosigner, which can help secure a more favorable interest rate. They also offer refinancing options for parents. However, their maximum loan amount is not publicly available.
- RISLA Student Loan Refi: RISLA offers deferred refinancing for actively enrolled college students, allowing them to get ahead of their loans before graduation. They also offer traditional refinancing options for graduates, with a minimum credit score requirement of 680 and a $40,000 minimum income requirement.
- SoFi Student Loan Refi: SoFi has made a name for itself in the lending industry, offering not only student loan refinancing but also other types of loans. Their refinancing loans range from $5,000 to $100,000.
- Splash Financial Student Loan Refinance: Splash Financial stands out with its low starting interest rates, starting at just 5.19%. However, rates for less qualified borrowers can go into the double digits.
Our Recommendations
Here are our top picks for specific situations:
- Best for Texans: Brazos: If you’re a Texas resident, Brazos offers low fixed interest rates starting at 4.90%. However, they have stricter credit score requirements.
- Best for larger loan balances: Citizens Bank: Citizens Bank allows borrowers to refinance up to $300,000 for undergraduate debt and offers flexible repayment terms.
- Best for low credit score: College Ave: College Ave offers refinancing options for borrowers with lower credit scores, with loan amounts up to $300,000.
- Best for consolidating multiple loans: Discover: Discover specializes in consolidating multiple loans and offers various deferment and repayment assistance options.
- Best for flexible repayment period: Earnest: Earnest allows borrowers to choose a repayment period between five and 20 years, offering great flexibility.
- Best for associate degree refinancing: Laurel Road: Laurel Road offers refinancing options specifically for those with associate degrees, with loan amounts up to $50,000.
- Best for multiple loan types: LendKey: LendKey offers not only student loan refinancing but also other types of loans, providing a one-stop-shop for borrowers.
- Best for parents and cosigners: PenFed: PenFed allows borrowers to refinance with a cosigner, which can help secure a better interest rate.
- Best for deferred repayment options: RISLA: RISLA offers deferred refinancing options for actively enrolled college students, allowing them to get ahead of their loans.
- Best for smaller loan balances: SoFi: SoFi offers easy application processes and flexible repayment options for borrowers with smaller loan balances.
- Best for low starting interest rates: Splash Financial: Splash Financial offers low starting interest rates, providing potential savings for qualified borrowers.
Methodology
To determine the best student loan refinance companies, we reviewed eligibility criteria, rates, terms, loan amounts, deferment and assistance options, and customer service reputation. Based on these factors, we selected the companies that best cater to different customer needs, such as repayment flexibility, larger debt balance allowances, and more.
Please note that interest rates are subject to change, and not all borrowers may qualify for the lowest rates listed. It is important to compare rates and terms from multiple lenders to find the best option for you.
Frequently Asked Questions (FAQs)
Q: What are the repayment terms and options provided by the best student loan refinancing companies?
Each student loan refinancing company offers its own range of repayment terms and options. Most lenders provide predetermined loan repayment terms, such as five, seven, 10, 12, 15, or 20 years. Some lenders may also offer customizable repayment terms. It’s crucial to verify whether your lender allows penalty-free early repayment.
Q: Can I refinance both federal and private student loans?
Yes, you can refinance both federal and private student loans with private lenders. However, it only works in one direction. Federal student loans cannot be refinanced with the government. If you refinance federal loans with a private lender, you may lose access to income-driven repayment plans, forbearance, deferral options, and other forms of debt forgiveness.
Q: Can I apply for student loan refinancing with a cosigner?
Yes, many student loan refinancing companies offer the option to refinance with a cosigner. However, cosigners are legally responsible for the loan repayment, similar to the original borrower. It’s essential to ensure that your cosigner understands their responsibilities and to make timely payments.
Refinancing your student loans can offer a way to save money on interest, lower monthly payments, or gain greater control over your loans. Remember to carefully consider your financial situation and needs when choosing the best student loan refinancing company for you.