Tag: Refinance

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College Students and Recent Grads, Pay Down My Debt

19 Options to Refinance Student Loans in 2017 – Get Your Lowest Rate

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

19 Options to Refinance Student Loans - Get Your Lowest Rate

Updated: August 16, 2017

Are you tired of paying a high interest rate on your student loan debt? You may be looking for ways to refinance your student loans at a lower interest rate, but don’t know where to turn. We have created the most complete list of lenders currently willing to refinance student loan debt.

You should always shop around for the best rate. Don’t worry about the impact on your credit score of applying to multiple lenders: so long as you complete all of your applications within 14 days, it will only count as one inquiry on your credit score. You can see the full list of lenders below, but we recommend you start here, and check rates from the top 4 national lenders offering the lowest interest rates. These 4 lenders also allow you to check your rate without impacting your score (using a soft credit pull), and offer the best rates of 2017:

LenderTransparency ScoreMax TermFixed APRVariable APRMax Loan Amount 



3.375% - 7.125%

Fixed Rate*

2.815% - 6.740%

Variable Rate*

No Max

Max Loan



3.35% - 6.49%

Fixed Rate

2.81% - 6.46%

Variable Rate

No Max

Max Loan



3.35% - 6.74%

Fixed Rate

2.80% - 6.73%

Variable Rate

No Max

Max Loan



3.25% - 7.26%

Fixed Rate

2.67% - 6.06%

Variable Rate

$125k / $175k

Max Loan

We have also created:

But before you refinance, read on to see if you are ready to refinance your student loans.

Can I Get Approved?

Loan approval rules vary by lender. However, all of the lenders will want:

  • Proof that you can afford your payments. That means you have a job with income that is sufficient to cover your student loans and all of your other expenses.
  • Proof that you are a responsible borrower, with a demonstrated record of on-time payments. For some lenders, that means that they use the traditional FICO, requiring a good score. For other lenders, they may just have some basic rules, like no missed payments, or a certain number of on-time payments required to prove that you are responsible.

If you are in financial difficulty and can’t afford your monthly payments, a refinance is not the solution. Instead, you should look at options to avoid a default on student loan debt.

This is particularly important if you have Federal loans.

Don’t refinance Federal loans unless you are very comfortable with your ability to repay. Think hard about the chances you won’t be able to make payments for a few months. Once you refinance, you may lose flexible Federal payment options that can help you if you genuinely can’t afford the payments you have today. Check the Federal loan repayment estimator to make sure you see all the Federal options you have right now.

If you can afford your monthly payment, but you have been a sloppy payer, then you will likely need to demonstrate responsibility before applying for a refinance.

But, if you can afford your current monthly payment and have been responsible with those payments, then a refinance could be possible and help you pay the debt off sooner.

Is it worth it?

Like any form of debt, your goal with a student loan should be to pay as low an interest rate as possible. Other than a mortgage, you will likely never have a debt as large as your student loan.

If you are able to reduce the interest rate by re-financing, then you should consider the transaction. However, make sure you include the following in any decision:

Is there an origination fee?

Many lenders have no fee, which is great news. If there is an origination fee, you need to make sure that it is worth paying. If you plan on paying off your loan very quickly, then you may not want to pay a fee. But, if you are going to be paying your loan for a long time, a fee may be worth paying.

Is the interest rate fixed or variable?

Variable interest rates will almost always be lower than fixed interest rates. But there is a reason: you end up taking all of the interest rate risk. We are currently at all-time low interest rates. So, we know that interest rates will go up, we just don’t know when.

This is a judgment call. Just remember, when rates go up, so do your payments. And, in a higher rate environment, you will not be able to refinance to a better option (because all rates will be going up).

We typically recommend fixing the rate as much as possible, unless you know that you can pay off your debt during a short time period. If you think it will take you 20 years to pay off your loan, you don’t want to bet on the next 20 years of interest rates. But, if you think you will pay it off in five years, you may want to take the bet. Some providers with variable rates will cap them, which can help temper some of the risk.

Places to Consider a Refinance

If you go to other sites they may claim to compare several student loan offers in one step. Just beware that they might only show you deals that pay them a referral fee, so you could miss out on lenders ready to give you better terms. Below is what we believe is the most comprehensive list of current student loan refinancing lenders.

You should take the time to shop around. FICO says there is little to no impact on your credit score for rate shopping as many providers as you’d like in a single shopping period (which can be between 14-30 days, depending upon the version of FICO). So set aside a day and apply to as many as you feel comfortable with to get a sense of who is ready to give you the best terms.

Here are more details on the 5 lenders offering the lowest interest rates:

1. SoFi: Variable Rates from 2.815% and Fixed Rates from 3.375% (with AutoPay)*


SoFi (read our full SoFi review) was one of the first lenders to start offering student loan refinancing products. More MagnifyMoney readers have chosen SoFi than any other lender. Although SoFi initially targeted a very select group of universities (it started with Stanford), now almost anyone can apply, including if you graduated from a trade school. The only requirement is that you graduated from a Title IV school. You need to have a degree, a good job and good income in order to qualify. SoFi wants to be more than just a lender. If you lose your job, SoFi will help you find a new one. If you need a mortgage for a first home, they are there to help. And, surprisingly, they also want to get you a date. SoFi is famous for hosting parties for customers across the country, and creating a dating app to match borrowers with each other.

GO TO SITE Secured

on SoFi’s secure website

2. Earnest: Variable Rates from 2.81% and Fixed Rates from 3.35% (with AutoPay)


Earnest (read our full Earnest review) offers fixed interest rates starting at 3.35% and variable rates starting at 2.81%. Unlike any of the other lenders, you can switch between fixed and variable rates throughout the life of your loan. You can do that one time every six months until the loan is paid off. That means you can take advantage of the low variable interest rates now, and then lock in a higher fixed rate later. You can choose your own monthly payment, based upon what you can afford (to the penny). Earnest also offers bi-weekly payments and “skip a payment” if you run into difficulty.

3. CommonBond: Variable Rates from 2.80% and Fixed Rates from 3.35% (with AutoPay)


CommonBond (read our full CommonBond review) started out lending exclusively to graduate students. They initially targeted doctors with more than $100,000 of debt. Over time, CommonBond has expanded and now offers student loan refinancing options to graduates of almost any university (graduate and undergraduate). In addition (and we think this is pretty cool), CommonBond will fund the education of someone in need in an emerging market for every loan that closes. So not only will you save money, but someone in need will get access to an education.

4. LendKey: Variable Rates from 2.67% and Fixed Rates from 3.25% (with AutoPay)


LendKey (read our full LendKey review) works with community banks and credit unions across the country. Although you apply with LendKey, your loan will be with a community bank. If you like the idea of working with a credit union or community bank, LendKey could be a great option. Over the past year, LendKey has become increasingly competitive on pricing, and frequently has a better rate than some of the more famous marketplace lenders.

In addition to the Top 4 (ranked by interest rate), there are many more lenders offering to refinance student loans. Below is a listing of all providers we have found so far. This list includes credit unions that may have limited membership. We will continue to update this list as we find more lenders. This list is ordered alphabetically:

  • Alliant Credit Union: Anyone can join this credit union. Interest rates start as low as 4.25% APR. You can borrow up to $100,000 for up to 25 years.
  • Citizens Bank: Variable interest rates range from 2.77% APR – 8.62% APR and fixed rates range from 4.74% – 8.24%. You can borrow for up to 20 years. Citizens also offers discounts up to 0.50% (0.25% if you have another account and 0.25% if you have automated monthly payments).
  • College Avenue: If you have a medical degree, you can borrow up to $250,000. Otherwise, you can borrow up to $150,000. Fixed rates range from 4.65% – 7.50% APR. Variable rates range from 4.01% – 7.01% APR.
  • Credit Union Student Choice: If you like credit unions and community banks, we recommend that you start with LendKey. However, if you can’t find a good loan from a LendKey partner, this tool could be helpful. Just check to see if you or an immediate family member belong to one of their featured credit union and you can apply to refinance your loan.
  • Laurel Road (formerly known as DRB) Student Loan: Laurel Road offers variable rates ranging from 2.99% – 6.42% APR and fixed rates from 3.95% – 6.99% APR. Rates vary by term, and you can borrow up to 20 years.
  • Eastman Credit Union: Credit union membership is restricted (see eligibility here). Fixed rates start at 6.50% and go up to 8% APR.
  • Education Success Loans: This company has a unique pricing structure: your interest rate is fixed and then becomes variable thereafter. You can fix the rate at 4.99% APR for the first year, and it is then becomes variable. The longest you can fix the rate is 10 years at 7.99%, and it is then variable thereafter. Given this pricing, you would probably get a better deal elsewhere.
  • EdVest: This company is the non-profit student loan program of the state of New Hampshire which has become available more broadly. Rates are very competitive, ranging from 3.94% – 7.54% (fixed) and 3.16% – 6.76% APR (variable).
  • First Republic Eagle Gold. The interest rates are great, but this option is not for everyone. Fixed rates range from 2.35% – 3.95% APR. You need to visit a branch and open a checking account (which has a $3,500 minimum balance to avoid fees). Branches are located in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich or New York City. Loans must be $60,000 – $300,000. First Republic wants to recruit their future high net worth clients with this product.
  • IHelp: This service will find a community bank. Unfortunately, these community banks don’t have the best interest rates. Fixed rates range from 4.65% to 8.84% APR (for loans up to 15 years). If you want to get a loan from a community bank or credit union, we recommend trying LendKey instead.
  • Navy Federal Credit Union: This credit union offers limited membership. For men and women who serve (or have served), the credit union can offer excellent rates and specialized underwriting. Variable interest rates start at 3.42% and fixed rates start at 4.00%.
  • Purefy: Only fixed interest rates are available, with rates ranging from 3.95% – 6.75% APR. You can borrow up to $150,000 for up to 15 years. Just answer a few questions on their site, and you can get an indication of the rate.
  • RISLA: Just like New Hampshire, the state of Rhode Island wants to help you save. You can get fixed rates starting as low as 3.49%. And you do not need to have lived or studied in Rhode Island to benefit.
  • UW Credit Union: This credit union has limited membership (you can find out who can join here, but you had better be in Wisconsin). You can borrow from $5,000 to $60,000 and rates start as low as 2.76% (variable) and 4.04% APR (fixed).
  • Wells Fargo: As a traditional lender, Wells Fargo will look at credit score and debt burden. They offer both fixed and variable loans, with variable rates starting at 4.49% and fixed rates starting at 6.24%. You would likely get much lower interest rates from some of the new Silicon Valley lenders or the credit unions.

You can also compare all of these loan options in one chart with our comparison tool. It lists the rates, loan amounts, and kinds of loans each lender is willing to refinance. You can also email us with any questions at info@magnifymoney.com.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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College Students and Recent Grads, Pay Down My Debt, Reviews

CommonBond Student Loan Refinance Loan Review

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

CommonBond Grad Student Loan Refinance Loan Review

Updated August 2, 2017

CommonBond was founded by three Wharton MBAs who felt the sting of student loans after they graduated. The founders decided to provide a better solution for graduates, as they thought the student loan system was broken and in need of reform. As a result, they strive to make the refinance (and borrowing) process as simple and straightforward for graduates as possible.

CommonBond* began by servicing students from just one school, and has rapidly expanded. Today, CommonBond loans are available to graduates of over 2,000 schools nationwide. Although the company traditionally offered loan refinancing to undergraduate and graduate students, CommonBond recently started offering loans for current students as well (both undergraduates and graduates).

CommonBond is one of the top four lenders identified by MagnifyMoney to refinance student loans.

As you might be able to tell by the name, CommonBond thinks of its community as family. There is a network of alumni and professionals within the community that want to help borrowers. This alone sets it apart from other lenders, as members often meet for events.

While these are all great things, we know you’re more interested in how CommonBond might be able to help you make your student loans more affordable. Let’s take a look at what terms and rates they offer, eligibility requirements, and how they compare against other lenders.

Refinance Terms Offered

CommonBond offers low variable and fixed rate loans. Variable rates range from 2.80% – 6.73% APR, and fixed rates range from 3.35% – 6.74% APR.

Note that these rates take a 0.25% auto pay discount into consideration.

There is no maximum loan amount. CommonBond will lend what you can afford to repay. CommonBond offers fixed and variable rates with terms of 5, 7, 10, 15, and 20 years.

The hybrid loan is only offered on a 10 year term – the first 5 years will have a fixed rate, and the 5 years after that will have a variable rate.

CommonBond has a great chart listing repayment examples based off of borrowing $10,000, which can be found on its rates and terms page.

To pull an example from that, if you borrow $10,000 at a fixed 4.74% APR on a 10 year term, your monthly payment will be $104.80. The total amount you will pay over the 10 year period will be $12,575.90.

The Pros and Cons

CommonBond is available to graduates of 2,000 universities. While that is a very long list, not all colleges and universities are included.

One pro to consider is the hybrid loan option available. It might seem a little confusing at first – why would someone want a variable rate down the road?

If you’re confident you’ll be able to make extra payments on your loan and pay it off before the 5 years are up, you might be better off going with the hybrid option (if you can get a better interest rate on it).

This is because you’ll end up paying less over the life of the loan with a lower interest rate. If you were offered a 10 year loan with a fixed rate of 6.49% APR, and a hybrid loan with a beginning rate of 5.64%, the hybrid option would be the better deal if you’re intent on paying it off quickly.

What You Need to Qualify

CommonBond doesn’t list many eligibility requirements on its website, aside from the following:

  • You must be a U.S. citizen or permanent resident
  • You must have graduated

CommonBond doesn’t specify a minimum credit score needed, but based on the requirements of other lenders, we recommend having a score of 660+, though you should be aiming for 700+. The good news is CommonBond lets you apply with a cosigner in case your credit isn’t good enough.

Documents and Information Needed to Apply

CommonBond’s application process is very simple – it says it takes as little as 2 minutes to complete. Initially, you’ll be asked for basic information such as your name, address, and school.

Once you complete this part, CommonBond will perform a soft credit pull to estimate your rates and terms.

If you want to move forward with the rates and terms offered, you’ll be required to submit documentation and a hard credit inquiry will be conducted. CommonBond lists the following as required:

  • Pay stubs or tax returns (proof of employment)
  • Diploma or transcript (proof of graduation)
  • Student loan bank statement
  • ID, utility bills, lease agreement (proof of residency)

CommonBond also notes it can take up to 5 business days to verify documents submitted, so the loan doesn’t happen instantaneously.

Once your documents are approved, you electronically sign for the loan, and CommonBond will begin the process of paying off your previous lenders. It notes this can take up to two weeks from the time the loan is accepted.

Who Benefits the Most from Refinancing Student Loans with CommonBond?

Borrowers who are looking to refinance a large amount of student loan debt will benefit the most from refinancing with them.

Keeping an Eye on the Fine Print

CommonBond does not have a prepayment penalty, and there are no origination fees nor application fees associated with refinancing.

As with other lenders, there is a late payment fee. This is 5% of the unpaid amount of the payment due, or $10, whichever is less.

If a payment fails to go through, you’ll be charged a $15 fee.

It’s also noted that failure to make payments may result in the loss of the 0.25% interest rate deduction from auto pay.

Transparency Score

Getting in touch with a representative is simple and there is a chat and call option right on the homepage. Some lenders have this hidden at the bottom, or they don’t offer a chat option at all.

CommonBond also lets borrowers know they can shop around within a 30 day period to lessen the impact on their credit.

It does not list its late fees on its website, unlike other lenders. However, after making a chat inquiry, the question was answered promptly.

CommonBond does offer a cosigner release and is ranked with a A+ transparency score.

Alternative Student Loan Refinancing Lenders

The student loan refinancing market continues to get more competitive, and it makes sense to shop around for the best deal.

One of the market leaders is SoFi. It’s always worth taking a look to see if SoFi* offers a better interest rate.

The two lenders are very similar – CommonBond offers “CommonBridge,” a service that helps you find a new job in the event you lose yours. SoFi offers a similar service called Unemployment Protection.

SoFi’s variable rates are currently 2.815% – 6.740% APR with autopay, and its fixed rates are currently 3.375% – 7.125% APR, which is in line with what CommonBond is offering.

SoFi also doesn’t have a limit on how much you can refinance with them.



on SoFi’s secure website

Another lender to consider is Earnest. There is no maximum loan amount, and Earnest has a very slick application process. Interest rates start as low as 2.81% (variable) and 3.35% (fixed).

Lastly, you could check out LendKey. It offers student loan refinancing through credit unions and community banks, but only offers variable rates in most states and fixed rates in a select few. The maximum amount to refinance with an undergraduate degree is $125,000, and the maximum amount to refinance with a graduate degree is $175,000.

All three of these options provide forbearance in case of economic hardship and offer similar loan options (5, 10, 15 year terms).

Don’t Forget to Shop Around

As CommonBond initially conducts a soft pull on your credit, you’re free to continue to shop around for the best rates if you’re not happy with the rates it can provide. As the lender states on its website, if you apply for loans within a 30 day period, your credit won’t be affected as much.

Since CommonBond does have strict underwriting criteria, you should continue to shop around and don’t be discouraged if you are not approved. The market continues to get more competitive, and a number of good options are out there.

Customize Your Student Loan Offers with MagnifyMoney Comparison Tool

*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Student Loan ReFi

Why I Refinanced My Student Loans — Twice

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


Refinancing your student loans can be a great way to accelerate debt repayment or free up some of your monthly budget. I recently refinanced my student loans for a second time, which was a strategic move to improve my overall financial health.

Here’s why I think this can be a smart idea, if you do it at the right time in the right way.

What Is Student Loan Refinancing?

If you’re new here and wondering what refinancing even is, allow me to explain. When you refinance your student loans, you essentially apply for a new loan so that a new lender will buy out your current student loans and give you a new loan with better terms.

“Better” terms depends on what your goal is. For many people, getting a better loan means getting a lower interest rate. If you want to save hundreds of thousands of dollars of interest over the life of your loan, refinancing is a great way to do that. You can structure your loan to pay it off faster at a lower interest rate. This might mean higher monthly payments than you’re used to but a much lower cost of your loan overall.

If you’re having trouble paying your student loans and your monthly payment is too high right now, you can also refinance your student loans to lower your monthly payment. So if you’re on a 10-year plan now, you could refinance to a 15- or 20-year plan to spread out your payments until you get on better financial footing.

Why I Refinanced Twice

About a year ago, I refinanced my federal student loans with SoFi because I wanted to get a better interest rate and pay off my loans faster. My student loans totaled $33,000 with an interest rate of 6.8% with 15 years left on the loan. My monthly payment was around $295 a month. I dropped over a half a percentage point in the interest rate to 6.25% and chose to pay off my loans in 7 years, which increased my monthly payment to about $485. Had I stayed with this loan, I would have saved almost $12,000 in interest fees over time.

I paid my monthly payments dutifully every month, but when my husband and I recently sat down to plan an aggressive debt payoff using the snowball method, we realized that I had been a bit too aggressive with my initial refinance.

Essentially, we wanted to throw as much money as possible at our high-interest debt. Our student loans were at manageable interest rates compared to our credit cards, and we wanted to restructure things a bit to free up more cash.

After receiving a refinance advertisement from College Ave in the mail, I decided to see if I could refinance my student loans and my husband’s graduate school loans with them. It had been only a year or so since my first refinance, but I was still interested. For the record, I tried twice previously to refinance my husband’s loans with SoFi, but they didn’t like his current salary as a medical resident, and they said I was not a qualified co-signer.

Well, luckily College Ave thought I was, so I was able to refinance both my student loans and my husband’s graduate school loans with College Ave. Our interest rates remained the same but I was able to customize a payoff plan that works well with our current debt snowball.

Basically, I chose a plan that allowed us to make graduated payments, so my payments for the next two years are significantly lower than they used to be. That gives me two years to knock out some of our credit card debt without worrying about having large student loan payments.

The Benefits of Student Loan Refinancing

In addition to getting longer or shorter payoff periods and better interest rates, there are other reasons why you might choose to refinance your student loans. For example, if you co-signed your student loans with your parents, sometimes student loan refinance companies will let you get a new loan entirely in your name, getting your parents off the hook.

Many people also refinance their student loans to be more organized. If you have several different student loans and bills with a mixture of interest rates, consolidating your student loans allows you to finally have one monthly bill with one interest rate in one place. This helps reduce the possibility of being late on your payments.

Things to Watch Out for Before You Refinance

While I’m obviously an advocate of refinancing, it’s important to know the downsides as well. The main downside is that if you refinance to a private company from having federal student loans, you lose a lot of the flexibility and perks of the federal student loan system.

Not all private lenders have as many repayment options as federal loans have, and most of them do not offer the perks that come with income-based repayment. For example, my husband’s medical school loans are under the income-based repayment plan called REPAYE, where the government is subsidizing his interest payments (several hundred dollars a month). This is not a perk I was willing to give up, but I was happy to refinance his private graduate school student loans to another private lender with better terms.

It’s Easier Than You Think

I know that switching student loan providers might sound like a complicated process, but with all the online financing companies available now, it’s easier than ever. The process to apply to refinance my student loans took less than 20 minutes both times.

Just make sure to have some identification documents on hand, like your driver’s license and Social Security card, to keep the process running smoothly. After my application was approved, it took about two weeks for my student loans to be completely moved over. Plus, since my new servicer paid off my own loans, that counted as a “payment,” which freed up even more cash this month.

Ultimately, student loan refinancing can be a strategic tool you can use when it comes to bettering your finances and getting out of debt faster. As long as you understand the process, ask to make sure you’re aware of any possible fees, and double-check that the process runs smoothly, you could be well on your way to financial freedom just by adjusting your interest rates and your payments on your student loans.

Cat Alford
Cat Alford |

Cat Alford is a writer at MagnifyMoney. You can email Catherine at cat@magnifymoney.com

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College Students and Recent Grads, Featured

(RISLA) Rhode Island Student Loan Authority Refinance Explained

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

(RISLA) Rhode Island Student Loan Authority Refinance Explained

Rhode Island is one of several states that has launched a student loan refinance program over the last few years. Refinancing your student loans is essentially paying off your current loans (federal or private) with another loan that has a better interest rate. A refinance can save you a bundle on interest. In some cases, it may even lower your monthly loan payment.

What sets the Rhode Island Student Loan Authority (RISLA) refinance program apart from some of the other state-run initiatives is that it’s open to anyone. You can qualify even if you live in a different state.

In this post we’ll cover:

  • The RISLA refinance loan terms and eligibility criteria
  • The type of student loans you can refinance
  • The implications of refinancing federal loans
  • Pros and cons

RISLA loan terms and eligibility requirements

RISLA offers loan terms of 5, 10, and 15 years. You can refinance $7,500 to $150,000. This refinance has no origination or prepayment penalty fees.

You need to apply with a co-signer to qualify for the lowest rates this program has to offer.

With a co-signer, fixed-interest rates range from 4.49% to 5.99% APR. Without a co-signer, fixed-interest rates range from 5.74% to 7.24% APR. If you sign up for direct deposit to make your monthly loan payment, RISLA offers an additional 0.25% interest rate reduction.

As for the RISLA eligibility requirements, you must:

  • Be refinancing loans that were used for education
  • Be refinancing loans that are in payment status
  • Have a credit score of 680 or above
  • Earn at least $40,000 per year
    • If you live with your co-signer, you can collectively earn $40,000 per year
    • If you live separately from your co-signer, you each need to make $40,000 per year

Student loans you can refinance with RISLA

You can refinance private student loans and federal student loans through RISLA.

Federal student loans you can refinance include parent PLUS loans, Stafford Loans, and both unsubsidized and subsidized Direct Loans.

Refinancing private student loans

Private student loans can be good candidates for refinancing because rates and loan terms offered by private lenders can vary widely. Some private student loans even have variable interest rates.

Keeping a variable interest loan for a long time can be risky. Variable interest rates can start off very low. The trade-off is variable rates can also increase in the future and impact your monthly payment.

Refinancing a private student loan that has high or variable interest with RISLA can stabilize your payments and save you money.

Refinancing federal student loans

Unlike private student loans, interest rates for federal student loans are set by the government.

For example, the interest rate on undergraduate subsidized and unsubsidized Direct Loans for 2016-2017 is fixed at 3.76%, which is a decent rate. If you took out undergraduate federal loans within the last few years, you may find your interest rate is already close to (or lower than) what RISLA is offering for a refinance.

Federal student loan borrowers who may benefit the most from the RISLA refinance are those with lingering undergrad loans from the early 2000s, and those with graduate or parent PLUS loans. These federal loans can carry an interest rate in the 6% to 8% range. In this case, a refinance with RISLA may be able to get you a lower interest rate.

RISLA has a calculator on its website you can use to check how much a loan refinance can save you. You can access that calculator here.

We also have a student loan refinance calculator at MagnifyMoney you can use to compare costs here.

Should you refinance federal student loans?

Savings is important, but it’s not the only factor to think about when deciding whether refinancing your federal student loans is the right move.

Refinancing your federal student loans can cause you to forfeit student loan borrower benefits like forbearance, deferment, income-based payment, and loan forgiveness.

Here’s a quick summary of these benefits and how they can help you:

  • Forbearance and deferment – Forbearance and deferment can postpone your student loan payments for a short period of time while you get back on your feet if you fall on hard times or experience an illness.
  • Income-based repayment plans – Income-based payment plans cap your monthly payment based on your income and family size. After 20 to 25 years of making payments within an income-based program, the balance of your loans can be forgiven.
  • Public Service Loan Forgiveness – The Public Service Loan Forgiveness Program is an initiative that anyone who plans to pursue a career in public service should consider. If you get an approved public service position and make 120 consecutive loan payments while serving (about 10 years), the remaining balance of your Direct Loans can be forgiven.

One thing to note is RISLA does offer some borrower benefits, including 12 months of forbearance and a payment plan program in certain circumstances. However, the extent of the borrower benefits that you get with federal student loans goes beyond what RISLA provides.

Pros and cons

Pro: The competitive interest rates. If you apply with a co-signer, the RISLA refinance offers low and fixed interest rates.

Con: The lowest rates require a co-signer. You can’t qualify for the best interest rates this program has to offer without a co-signer. We’ll discuss a few lenders below that may offer you a low rate without a co-signer.

Pro: Anyone is welcome to apply. Being a resident of Rhode Island is not required.

Con: Refinancing forfeits student loan borrower benefits. This con is irrelevant if you’re planning to refinance private student loans since they typically offer limited borrower protections anyway. But refinancing federal student loans will cause you to miss out on the protections covered above. Make sure you’re comfortable with the implications of no longer having these perks before moving forward.

Pro: No fees. The RISLA refinance has no origination fee or prepayment penalties.

Should you consider the RISLA refinance?

The RISLA refinance is open to borrowers outside of Rhode Island, so it’s yet another refinance option that students and parents across the country can consider. But it’s also important to shop around before making a decision.

The downside of the RISLA refinance is that the most competitive rates require a co-signer. If you don’t have a co-signer, here are a few other lenders you can turn to that offer low rates:

  • CommonBond – Fixed rates starting at 3.50% APR
  • Earnest – Fixed rates starting at 3.50% APR
  • LendKey – Fixed rates starting at 3.25% APR
  • SoFi – Fixed rates starting at 3.375% APR

Keep in mind, the very best rates are given to those with strong credit scores. You may need to work on strengthening your credit history first before getting approved for a low rate on your own with CommonBond, Earnest, LendKey, or SoFI.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at taylor@magnifymoney.com

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What To Do if a Student Loan Refinancer Rejects You

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What To Do if a Student Loan Refinancer Rejects You

After researching the pros and cons of refinancing student loans, you might be excited to go through with the process. Perhaps you’re looking to lower your interest rate, or you want to release a co-signer from a student loan.

While you may be set on refinancing your student loans, submitting an application isn’t a guarantee of approval. When you apply, the lender will likely take your credit, income, other debts, employment status, and possibly other factors into account.

But a denial on your first application doesn’t mean you’re locked out from ever refinancing. Instead, take the time to understand what influenced the decision and determine your best next step. 

Find Out Why Your Application Was Denied

Student loan refinancers look at many aspects of an applicant’s personal and financial life when deciding whether or not to approve a loan. The process sometimes starts with prequalification, when you share information about yourself and the company performs a soft inquiry on your credit. A soft inquiry lets the company examine your credit reports, but doesn’t affect your credit score.

You could find out you won’t qualify for refinancing during the prequalification phase. For example, based on your income and debt obligations, you could be turned down because you don’t have enough free cash flow — your monthly income minus monthly debts. Usually, lenders like to see your debt-to-income ratio under 40%.

Phil DeGisi, chief marketing officer at student loan refinancer CommonBond, says the company will tell you why you were denied if you don’t meet the company’s criteria. “If the person has questions or doesn’t understand what that means, they can call customer service and we’ll answer any questions they have about their application,” DeGisi said. Taking time to figure out why your application was turned down can help guide your path toward approval in the future.

You could prequalify for refinancing but wind up getting declined during the underwriting process. It’s at this point that the lender is likely to do a hard pull on your credit, which could affect your credit score. (Check with the lender before submitting for prequalification to see if it performs a hard or soft inquiry.) Amanda Wood, director of business and product development at online lender SoFi, says that could happen if “something you shared with us initially doesn’t match up after you’ve submitted more information, like pay stubs and identity verification.” Common examples include a recent bankruptcy or insufficient free cash flow. 

Try Again with Another Lender

You could still be approved from a different lender, even if you were handed a rejection already. “Everyone looks at different factors, and we all make different judgments on eligibility,” DeGisi said. However, there are some basic rubrics, and “the type of person that’s generally going to be most successful is someone who can afford their monthly payments.”

If you have terrible credit and poor cash flow, the chances of getting approved are quite small with any lender. You could get denied even if you have a stellar credit score because of poor cash flow, or if you have great cash flow but a poor credit history. Approval isn’t everything either; in some cases you might get approved, but the interest rate is so high it doesn’t make sense to go through with the refinancing.

Wood points out that regardless of whether or not you’re approved, “it’s a good idea to check out all your options and see not only who will approve your loan, but what companies offer the best rates and terms, and have low or no fees.” You may be able to determine a company’s fees by reading the fine print before submitting an application or going through prequalification.

Be cautious when applying for refinancing with multiple companies as the resulting hard inquiries could impact your credit score. However, it makes sense to go ahead and shop around within a certain time frame. Depending on the credit-scoring system, multiple hard inquiries for student loans made within 14 to 45 days are weighted as a single inquiry for credit-scoring purposes. That means the damage to your credit score will be kept at a minimum.

Increase Your Eligibility and Try Again Later

Take steps to improve your chance of being accepted later by working on the factors that you believe, or the company told you, impacted the denial decision.

Employment is often a requirement to qualify for refinancing, and if you don’t have a job, that’s where you’ll likely want to start. In the meantime, consider alternative federal student loan repayment plans mentioned below.

If you have a job but not enough free cash flow, you’ll need to focus on decreasing your monthly payments, increasing your income, or both. Perhaps you could negotiate a raise or take on an additional part-time job. The extra income will help one side of the equation, and you could increase your cash flow even more by putting the money toward debt payments.

Picking up a contractor side gig, such as driving for a ride-sharing company, might not factor into your income unless you’ve had the job for at least two years because the lender wants to see two years’ worth of tax returns. However, paying down debt with the extra money will still help your cash flow.

Your credit history and score are often important factors as well. Learning how your actions affect your credit, and what will help your credit going forward, are valuable lessons that can help you now and in the future.

Building a strong credit history filled with on-time payments can take a long time, but a few actions can have a more immediate effect. Start by reviewing your credit reports — you can get a free copy from each bureau at AnnualCreditReport.com — and disputing errors that could be hurting your credit. If you often have a high balance on your credit cards, keeping the balance below 20% to 30% of the available credit might help your score.

Look into Alternative Federal Repayment Plans

If you’re having trouble making student loan payments, refinancing might not be your only option. Both Wood and DeGisi recommend looking into the different federal repayment plans available to borrowers with federal student loan.

There are several income-driven plans that base borrowers’ monthly payments on their income. You may also be able to put your federal loans into deferment or forbearance, which lets you temporarily halt payments — although interest may still accrue. 

The Bottom Line

Refinancing student loans can help you save money on interest, lower your monthly payments, and allow you to release a co-signer from your loan. Receiving a denial letter is disappointing, but it doesn’t mean you’re boxed out for life. Try again later after improving your financial profile. In the meantime, if you’re having trouble making federal student loan payments, consider switching to a different payment plan.

Louis DeNicola
Louis DeNicola |

Louis DeNicola is a writer at MagnifyMoney. You can email Louis at louis@magnifymoney.com


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“How I Saved Almost $18,000 in Student Loans by Refinancing”

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Student Loans by Refinancing

When Aaron LaRue, the founder of MortgageMonks.com, graduated from the University of California, Santa Barbara in 2011, he owed more than $50,000 in student loan debt. “I didn’t qualify for any financial aid or federally subsidized loans, and I took whatever private loan I could get because I just wanted to go to school,” he said.

By the time LaRue was done financing his schooling, he had ended up with three student loans, one for each year he was in school (he even graduated in three years on purpose in the hopes of cutting down on tuition costs). “Everything got lumped together when I consolidated the first time, but the loans were about $23,000 for the first year about then $13,500 for both my second and third years,” said LaRue. “So almost $50,000 on the nose.”

Since the variable interest rates on his loans were incredibly high, LaRue knew that he’d have to work throughout college in the hopes to pay down some of that debt he owed. “I worked as a teacher’s assistant for two different classes,” he said. “I was the photo editor of our daily school newspaper, and I worked in a computer lab on campus teaching video editing. At one point I had all three jobs at the same time, and that was on top of my crazy class schedule. On top of my consistent jobs, I also always had one-off side gigs going. I shot photos for magazines, photographed a wedding and would pick up freelance video editing jobs on the side.”

Needless to say, LaRue stayed busy — but the bills kept piling up.

Finally, after a few years of checkered payment history and a brief period of deferment, he decided to refinance. “Refinancing was really difficult for me,” LaRue admits. “I graduated high school in 2008, right when the economy was in free fall. By the time I graduated [college] in 2011, I was competing in a job market against people with tons of experience who had recently been laid off. It was difficult for me to get a good paying job, so I decided to go out on my own as a consultant and try to take on multiple clients. I’ve been doing that ever since.”

While LaRue found some success in his career after graduating, he admits that what many people often don’t understand is that when you’re self-employed, it’s very difficult to qualify for loans unless you have two years of tax returns as a self-employed person. “So the first time I tried to refinance my loan, I was denied,” he said. “I started doing more research and I came across a company — Earnest — that used a merit-based qualification system. They checked my earnings and my credit score, but they also dug through my bank accounts to see if I was managing my money properly. They could tell I was responsible, and I was able to qualify. This was huge for me, because it got me into a fixed interest rate loan, and my rate was 2% lower than what I was paying at the time.”

At the time of refinancing, LaRue had about $54,775 in debt, and he’s managed to save $17,990 over the life of the loan, which works out to over $1,200 per year during the repaying period. “I’m still making payments, but I’ve cut about four years off my repayment time and I’m saving money every month,” said LaRue.

At the end of the day, LaRue has some advice for students struggling under the same weight of crushing student loan debt. “Don’t let the debt get you down,” he says. “If you understand how debt works and you can manage it, it’s really not that bad. Debt has allowed me to go to school and it’s helped me start my own business, and in both cases I’ve come out ahead. Having a monthly payment sucks, but I have definitely gotten a return on my investment.”

If you’re ready to consider saving money by refinancing your own student loans, check out this piece for 19 options to refinance and get your lowest rate.

Cheryl Lock
Cheryl Lock |

Cheryl Lock is a writer at MagnifyMoney. You can email Cheryl at cheryl@magnifymoney.com

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Options to Get Out of Your Timeshare

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Options to Get Out of Your Timeshare

You’ve finally escaped the stress of your commute, stacks of unfinished paperwork, and the never-ending demands of the office. You’re staying someplace warm, enjoying pina coladas on the beach or working on your tan by the pool.

The resort’s sales manager has casually mentioned an affordable way to return to this same place every year. And in your relaxed state of bliss, you start daydreaming about future vacations. You imagine making the resort an annual family destination or the spot to celebrate your wedding anniversary.

Let’s face it — buying a timeshare is often an impulsive decision. And one you may regret after the drinks have worn off, your vacation is over, and reality sets in. Because chances are, your timeshare is not the amazing deal the resort’s sales manager sold you on. If you’re stuck with buyer’s remorse or simply can’t afford your timeshare, here is how to minimize the damage to your wallet and credit score.

What is a Timeshare?

So what is a timeshare exactly? A timeshare allows you to buy the right to use a property every year for a certain period of time. And the property is usually part of a resort. A deeded timeshare means you’re purchasing a portion of the property. And a non-deeded timeshare mean you’re leasing the right to use the property for an agreed upon number of years (usually 10-50).

How Much a Timeshare Actually Costs

The cost of a timeshare varies based on the size of the unit, the resort’s location, the time of year, amenities, and more. But the National Timeshare Owners Association (NTOA) says the average timeshare sales price is $20,020.

What does typical report-based financing looks like?

  • Loan Amount – $20,000
  • Term of Loan – 6 years (72 months)
  • Interest Rate Charged – 15.9%
  • Monthly Payment – $432.74
  • Actual Cost – $31,157.28

Many resorts also offer a 1-year loan with a 0% interest rate if you’re willing to put 50% down within 30 days of purchasing the timeshare.

In addition to the cost of the timeshare itself, you’re also responsible for an annual maintenance fee. The National Timeshare Owners Association (NTOA) says the average maintenance fee for 2015 is a whopping $880. This annual maintenance fee can increase over time. And you’re responsible for paying this fee every year regardless of whether or not you visit.

Selling a Timeshare

Are you thinking about trying to sell your timeshare? Although the National Timeshare Owners Association (NTOA) lists three preferred resellers on their website, it’s not always that simple.

Resale websites operate as a subscription service. And their fees range from $14.99 to $125 per year. Plus, resellers may take a portion of the sale.

Remember, timeshares are not real estate investments. And the secondary market is oversaturated with buyers. Want to see further evidence? A quick search on eBay revealed dozens of timeshares practically being given away for $1.

Try Refinancing Your Loan

Between the high interest rates of resort-based financing and the annual maintenance fee, what was sold as an affordable vacation becomes expensive very quickly. If you’re struggling to afford monthly loan payments, you may want to try refinancing to secure a single-digit interest rate.

LightStream, a division of SunTrust bank, offers timeshare-refinancing options if you’re a U.S. citizen with good credit. They don’t charge fees to refinance. And their interest rates are fixed.

Here’s an example of what the numbers may look like for refinanced timeshare loan:

  • Loan Amount – $20,000
  • Term of Loan – 6 years (72 months)
  • Interest Rate Charged – 7.84% – 9.84% APR with Autopay
  • Monthly Payment – $349.10 – $368.91
  • Actual Cost – $25,135.20 – $26,561.52
  • Money Saved – $4,595.76 – $6,022.08

Your timeshare might be such a financial drain that you decide to sell (or give it away) and then refinance the remaining debt to pay it off quickly and with a lower interest rate.

Consider Timeshare Exchanges

Did your resort’s sales manager mention the option of timeshare exchanges? It’s a major selling point for many buyers. And who wouldn’t like the option of trading timeshares with owners in other locations? But does it make sense for you? It depends.

If you’ve paid off your debt, it may be worth the additional fees to list your timeshare on an exchange. The National Timeshare Owners Association (NTOA) lists preferred exchange companies on their website. But you need to read the fine print. Less popular destinations and off-peak season timeshares tend to be more difficult to exchange. And there may be other restrictions that weren’t mentioned at the closing table.

Try To Negotiate With Original Owner

Have you paid off your debt but you’re sick of coughing up annual maintenance fees? It’s worth reaching out to the original owner to see if they’re willing to negotiate. They may agree to let you out of your original deal if you agree to cover a few years of maintenance fees. And they’ll have the option of reselling the timeshare to another buyer. It doesn’t hurt to ask!

Can’t negotiate with the original owner? Try getting a team of experts to help you legally get out of the contract with the Time Share Exit Team.

The Truth About Timeshares

It’s cheaper than ever to find affordable places to stay on vacation. Websites like Airbnb, VRBO, and HomeAway make it easy to find affordable listings all over the world. A timeshare at a luxury resort may seem attractive today, but what happens when your tastes and lifestyle change? The truth is, timeshares don’t always get used as often as buyers originally planned.

If you have to finance a timeshare, it’s probably not worth buying. Why? Resort-based financing can incur interest rates of 15-16%. And even once you’ve paid off the loan, you’re still stuck with expensive annual maintenance fees averaging $880 or more! Plus, attempting to resell can be a nightmare. It can get costly and there’s just not a strong secondary market. And all this doesn’t even include the cost of travel to get to your timeshare in the first place.

Despite all these drawbacks, almost 400,000 timeshares were sold in 2015. And it’s easy to see how buyers get roped in. It’s not easy to make a clear-headed decisions on a white sand beach after a couple of margaritas.

If you’re regretting your choice to buy or can’t afford your timeshare, you can minimize the damage to your wallet and credit by refinancing, exchanging, or negotiating with the original owner.

Kate Dore
Kate Dore |

Kate Dore is a writer at MagnifyMoney. You can email Kate at kate@magnifymoney.com


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Minnesota SELF Refinance: Student Loan Relief for Minnesota Residents

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Student Loan Relief for Minnesota Residents

Paying high interest rates on your student loans? If you’re a resident of Minnesota, we have good news for you. Administered by the Minnesota Office of Higher Education, Minnesota SELF Refi loans are available to Minnesota residents with more than $10,000 in qualified student loan debt. With credit scores affecting qualification but not interest rates, qualifying borrowers are, in many situations, able to obtain rates lower than federal student loans, potentially saving them money, and reducing the amount of time they are enslaved to their student loan debt.


Minnesota SELF Refi charges no application or origination fees. Late fees are up to $25 if your payment is not made within 15 days of the due date, and returned payment charges cap at $15. Qualified borrowers can opt for either a fixed interest rate, or a variable interest rate.

Fixed Interest Rate Loans

If you qualify for a Minnesota SELF Refi loan, your interest rate is determined by the length of your loan rather than your credit score. Those who opt for fixed interest will have the same interest rate for the entire term of the loan.

Screen Shot 2016-02-12 at 2.38.27 PM

Variable Interest Rate Loans

The variable option often score you a lower interest rate, with the understanding that it is subject to change over time. That means your rate could go either up or down every quarter on January 1st, April 1st, July 1st, and October 1st. Minnesota SELF Refi uses the LIBOR index to calculate quarterly rates. The LIBOR index is the average of interest rates from sixteen of the world’s largest banks.

The Minnesota Office of Higher Education pulls the rate from the past month of the LIBOR index, and then adds in a margin to cover its operating costs. Both numbers are reassessed every quarter, and their sum will be your interest rate for the next three months.

Current rates on variable interest rate loans are as follows:

Screen Shot 2016-02-12 at 2.38.31 PM

Rates on variable interest loans max out at 18%.

Pros and Cons of Refinancing with Minnesota SELF Refi


  • Variable interest rates are lower than current rates on federal student loans for 5- and 10-year terms, though they are subject to change.
  • If you initially financed federal student loans between 2006 and 2009, rates on Minnesota SELF Refi fixed rate loans are substantially lower for 5- and 10-year terms. Five-year terms on graduate loans are lower than the current Federal rate.
  • No application fees or origination fees.
  • Offers refinancing options for those with diplomas, certificates, and associate’s degrees.
  • Your credit score does not dictate your rate. If you qualify, you qualify for the uniform rates.
  • Cosigner release is available.


  • If you are refinancing a federal student loan, you will lose all benefits of any federal programs you are enrolled in.
  • No deferment options available.
  • Debt-to-income ratio may limit you from getting the more attractive rates that accompany shorter loan terms.
  • Maximum APR on variable rate loans is on the higher end at 18%.
  • Maximum loan amounts are small when compared to other refinance options in the private market.

[Learn more about refinancing here]

Who Qualifies

Current Minnesota residents with a credit score of 720+ with no delinquencies on their credit report, and no charge offs, liens, or judgements of $300+ meet the credit requirements for this refinance option. Additionally, your debt-to-income ratio must be at or below 45%. You must have earned a certificate, diploma, associate’s degree, bachelor’s degree, or graduate degree, though max loan amounts differ depending on your degree.

  • If you have a certificate, diploma, or associate’s degree, you can refinance loans in the amount of $10,000-$25,000.
  • If you have a bachelor’s or graduate degree, you can refinance loans in the amount of $10,000-$70,000.

The loan you are refinancing must be a qualified student loan, meaning that it was used exclusively for tuition and fees, room and board, books, supplies, equipment, or other necessary expenses, like transportation, for your education at an eligible institution.

There are three situations where you must get a cosigner in order to qualify for refinancing with Minnesota SELF Refi. If you are not a US citizen or permanent resident, you must have a cosigner. If you are a citizen or permanent resident with a credit score between 650-720, you can also qualify if someone cosigns with you.

Cosigners must meet the following requirements:

  • Must be a US citizen or permanent resident
  • Must have a credit score of 720+
  • Must have a debt-to-income ratio at or below 40%
  • Must have no delinquencies on their credit report
  • Must have no charge offs, judgements, or liens amounting to $300+

If you up your credit game, your cosigner can be let off the hook after 48 months of on-time payments as long as you meet the borrower requirements outlined above.

Application Process and Documents Needed

You can apply online through FirstMark Services, the loan servicer for SELF Refi loans. In order to fill out the application, you will need the following information:

  • Your driver’s license number and date of issue
  • Name, address, and phone number of a personal reference (cannot be your cosigner)
  • Current annual income
  • Current employer name and phone number, along with how long you have been there in terms of years and months
  • Type of student loan you are refinancing
  • Lender and servicer name
  • Current interest rate you are paying

You’ll also need a printer and a scanner, as you’ll need to print, sign and upload the credit agreement. You will also need to scan and upload the following documents:

  • Copy of your photo ID, and the photo ID of your cosigner if you have a cosigner
  • Copy of your diploma, certificate, or degree including the date of graduation
  • Current statement of the loan you are refinancing that shows your name, the lender’s or servicer’s name and address, your account number, your current balance, and your interest rate
  • Your two most recent paystubs. They must show your name, your employer’s name, pay period, and pay date.
  • Federal tax return including all attached schedules if you are self-employed

After you have submitted your application, Firstmark will review it within 1-2 days. If you are pre-approved, you will receive an Approval Disclosure laying out all the terms and rates which you must sign and return. Once this document is returned, it takes about 10 business days for the disbursement to make it to your current lender.

How it Stacks Up

Minnesota SELF Refi is a great option if you are a Minnesota resident, especially if you have a diploma from an education that didn’t necessarily result in a four-year degree, or if you have a lower credit score, but still want to refinance with a cosigner.

There are other options out there, and some of them come with more competitive rates. What’s best for you will depend entirely on the dynamics of your own, unique situation.

SoFi’s student loan refinancing is one of the best on the market. Like Minnesota SELF Refi, it has no origination fee, but unlike most other loan refinancing products on the market, it does give you up to three months of essential deference should you ever lose your job, as long as you weren’t at fault. It also has a program for would-be entrepreneurs that defers payments for six months while SoFihelps you get on your feet through access to networking events, mentors, and investors. In addition, it offers an option to refinance over a 20-year period, and you can refinance as little as $5,000.

SoFi is very selective in who it will approve, though. It does not typically accept anyone with a credit score under 700, and cosigners are not always an approved option. It also does not offer refinancing for anyone with less than a four-year degree.

Another option that offers refinancing on a minimum of $5,000 with the 20-year term option is Earnest. Like SoFi, it does have a deference option if you enter financial hardship. Its deference period is one month out of every year, as long as you have consistently been making on-time payments for six consecutive months.

Earnest, instead of discriminating on your credit history, wants to see that you will have the ability to pay off your loan in the future. This predictive formula is unique, and can present an advantage to those with less than desirable credit scores.

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Brynne Conroy
Brynne Conroy |

Brynne Conroy is a writer at MagnifyMoney. You can email Brynne at brynne@magnifymoney.com


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Why I Won’t Refinance My $123,000 in Student Loans

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

college-grad (1)

There’s so much talk right now about refinancing student loans – especially among those with massive debt (like me). Yet, I have decided not to refinance my loans. I don’t think the lower interest rate is worth the additional risk that comes with refinancing, especially when dealing with a debt as large as mine.

My Massive Student Loan Debt

I graduated law school in 2011 with $206k in student loan debt. This is an enormous amount of debt that made me feel overwhelmed, trapped, and miserable.

About $60,000 was from undergrad at Wittenberg University in Springfield, Ohio, and the rest was from law school, at The Ohio State University Moritz College of law. I had a combination of federal and private loans for undergrad, but my law school loans are all federal.

I’ve paid off all of my undergrad debt (woohoo), but my law school debt stands at $123,000 as of September 2015.

The interest rates on my undergrad debt ranged from 3%-6%, but the interest rate on my law school debt averages out to be 7.9% (with ranges including 6.5%-8.5%). With this high of an interest rate, I looked into refinancing my student loans.

What Happens When You Refinance Your Student Loans

Unlike when you consolidate or switch to a different repayment plan, when you refinance your student loans, you sell your loans to a new lender who repays your federal loans and gives you a new private loan. When you consolidate or when you switch repayment plans, like IBR or PAYE, you change the terms of your current loan but the loans still stay federal. This is not the case with refinancing because the only entities that currently offer refinancing are private companies. When a private company buys your loan, pays it off, and offers you a new loan with new terms, your loan becomes a private student loan. This could change in the future. The federal government could add a program that allows you to refinance your student loans (I would definitely do this). For now, this is not available.

By selling your Federal loans to a private lender, the private lender offers you a new loan, with new terms. These terms could be more favorable to you – or they could not. It completely depends on the loan. One thing is for sure, though: you are not afforded the same protections with private loans as you are with Federal loans. You will not automatically have access to income repayment plans or forgiveness options. Forbearance and deferment are not certain. Your lender could have clauses addressing these situations in your loan terms, or it could not. When you refinance your student loans, the terms will change to reflect those determined by the lender (not the Federal government).

Why I’m Not Refinancing My Student Loans

After a lot of research and consideration, I decided not to refinance my student loans. The main reason that I am not refinancing my student loans is because I don’t think benefit of a lower interest rate outweighs the additional risk I would take on if I refinanced.

Ironically, I am not on an income repayment plan, and I am not on track for student loan forgiveness. So, as of today, I am not actually taking advantage of any of the benefits that makes federal loans better than refinanced student loans. But, you know what? I could if I wanted to. And to me, that is worth paying the extra interest.

For example, a few months ago, I quit my six figure job to be happy, changing careers completely – I quite being a lawyer and transitioned into a career in financial planning. I’m much happier. While I am managing to pay my bills without switching repayment plans, that may not always be the case. I’m only a few months in. I’m hoping to stay on the same plan, but if I can’t, then I have the option of going on an income plan. If I refinance my loans, I won’t have the income repayment options currently available. Quite frankly, had a refinanced my loans prior to switching careers, I’m not sure I would have switched because I wouldn’t be sure I could afford the payments. With federal loans, I have more options and that’s worth paying more in interest.

Some student loan refinancing companies offer to “help” you if you lose a job, but to me that’s not enough. Lose your job also means get laid off and not quit to transition careers to a lower-paying position. My federal loans can go into deferment, forbearance, and I know the exact income plans that are available to me (there are several). I’m not planning on using any of these options if I can help it – I’m committed to being debt free as soon as possible. But given the amount of my student loan debt (given how massive it is) it could take years to repay. And over years, things can change. I don’t feel comfortable taking on the extra risk of a private loan for a lower interest rate.

For me, the flexibility and availability of protections that come with federal student loans make it worth it to pay more in interest. I feel more secure with federal student loans than private student loans. I know if times get tough, I can have options.

Natalie Bacon
Natalie Bacon |

Natalie Bacon is a writer at MagnifyMoney. You can email Natalie at natalie@magnifymoney.com


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Reviews, Student Loan ReFi

Mainstreet Credit Union Student Loan Refinance Review

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Updated January 5, 2015

Student loan refinancing is something every student loan borrower should consider and at the very least do the math to see if it can save you money. Mainstreet Credit Union of Olathe, Kansas offers competitive rates, but this option is only available to a small population.

You must become a member of Mainstreet Credit Union before being approved. Membership is available to those who work or live in the greater Kansas City area (Kansas counties: Leavenworth, Wyandotte, Johnson, Douglas, Miami, Franklin and Linn; and the following counties in Missouri: Platte, Clinton, Caldwell, Clay, Ray, Jackson, Lafayette, Cass and Bates). Membership is also open to organizations or businesses located within said counties. Once you’re a member, you’re always a member – regardless of where you live or work. Also note you must go into a credit union to apply for membership. Online applications are not available.

Besides the geographic consideration, it’s also important to note that Mainstreet’s refinancing program operates through LendKey. LendKey offers access to refinance options from 300+ community banks and credit unions. The partnership works because LendKey offers technology and support while institutions like Mainstreet Credit Union can offer low rates.

The Offer

Mainstreet Credit Union offers a variable rate of 6.00% to 12.25% on a maximum of $120,000 for undergraduate degrees and $160,000 for graduate loans.


  • The Minimum Loan Amount – You can borrow as little as $7,500. This is normal for the industry but it’s worth noting. Other institutions only open loans sized at $10,000+.
  • Ability to Prepay in Full – A borrower may prepay the loan partially or in full anytime with no fees or penalties.
  • Small Payments While in School – Private loans don’t offer the grace periods that Federal loans do. This means you typically need to start paying a private consolidated loan right away. However, Mainstreet lets you choose between making interest-only payments or a $25 monthly proactive payment while in school. Most college students can swing $25/month.
  • Cosigner Release Available – After 24 months of full, on-time payments, the cosigner may be released. What happens is LendKey will reassess your credit worthiness. They will check your credit score and employment history and determine if you can move forward on your own. Your cosigner may especially enjoy this part since they may only need to be on the loan for two years, even if you have a 20-year loan.
  • No Loan Origination Fee – Yes, you can see a loan offer without paying a dime.


  • Fixed Interest Rates Are Not Available – To be fair, only a handful of institutions that use LendKey offer fixed interest rates on student loan refinancing. All of those states are in New England.
  • A Cosigner Is Encouraged – In order to get a higher interest rate, Mainstreet encourages borrowers to use a cosigner. If you can’t, or don’t want to get a cosigner, SoFi may be a better option. SoFi doesn’t encourage cosigners. In fact they only ‘occasionally accept’ cosigners. Read the comparison of Mainstreet vs. SoFi at the end of this article.
  • Not Every School Is Accepted – Most institutions are accepted so don’t worry about this too much. Luckily, you can check quite early in the application as to whether or not your school will work with this new loan.
  • High Interest Rates – Yes, ‘high’ is a relative term, but the floor rate is 6%. LendKey works with other institutions that offer as lower rates.
  • Geography – You must live or work in Kansas City upon applying for the loan.
  • Income Requirements – Mainstreet’s income requirements are low. But if you plan on taking a year off after school, Mainstreet may not accept you. Without a cosigner, you must prove $2,000 per month of ‘reliable’ income. With a cosigner, you must still prove a reliable income (no dollar amount outlined) and your cosigner must earn at least $2,000 worth of reliable income.

The Fine Print

There’s an ‘Upfront Fee’

This fee is charged at the time of loan disbursement. It gets added into your monthly payment. There’s still no origination fee.

The lowest interest rate is only available if you…

It takes more than an excellent credit score to get the lowest interest rate. You can only get the lowest interest rate if you have an excellent credit score and enroll in automatic payments. If you ever opt out of automatic payments, the rate reduction will discontinue. The rate reduction may also be suspended during forbearance or deferment.

3 Days to Cancel

A borrower only has 3 days to cancel a loan. Some institutions offer 30 days.

Stacking Up Against the Competition


Social Finance, Inc. (known as SoFi) will likely be able to score you an interest rate below 6%. Interest rates start as low as 2.815% variable and 3.375% fixed. The minimum amount you can borrow is $5,000.

As mentioned earlier, SoFi doesn’t default to offering a cosigner. It only ‘occasionally accept’ cosigners.SoFi is definitely worth considering at 2.815% APR.

SoFi has a unique approach to underwriting new loans. They take a more holistic approach than you’ll find with Mainstreet Credit Union. SoFi takes into account professional accomplishments, income, credit score, and employment history. Its goal is to keep default rates extremely low.



on SoFi’s secure website


CommonBond grabs your attention by touting variable interest rates as low as 2.80% APR. A CommonBond application only takes 7 minutes and has no origination fee. CommonBond offers big loans, with no maximum loan amount. Mainstreet maxes out at $120,000 for an undergraduate loan and $160,000 to finance a graduate education.

While a cosigner is not necessary, your interest rate can be entirely based upon a cosigner’s credit score. What CommonBond does is take the better credit score of the two people and uses that for assigning an interest rate. This could work well if you’re a student with a low credit score and have a parent with an attractive credit score.

Don’t Forget to Do Your Research

The Mainstreet Credit Union student loan refinance program is fair. There are no scary surprises or ‘gotchas’. However, SoFi and CommonBond should be considered as well – especially if your main goal is to secure a low interest rate. You might also want to visit our review of the best places to refinance your student loans here. You should always shop around for the lowest rates before you sign on the dotted line.

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Will Lipovsky
Will Lipovsky |

Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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