Tag: Student Loan Refinance

Advertiser Disclosure

Reviews, Student Loan ReFi

Laurel Road (formerly DRB) 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.

Students throwing graduation hats

Updated August 14, 2017

Laurel Road (formerly know as DRB – rebranded on June 15) is a division of Darien Rowayton Bank that offers a highly competitive student loan refinance product. In addition to a competitive interest rate, Laurel Road offers some decent loan perks that sets it apart from others.

According to Laurel Road, someone who refinances $100,000 has the potential to save up to $15,000 over the life of a 10 year loan. And in special circumstances like disability or financial hardship, the bank might completely forgive loans or allow for partial payments. Read on for the ins and outs of a Laurel Road loan to see if it’s the right refinance for you.

Loan Details

Laurel Road will refinance up to 100% of Federal, private and Parent PLUS loans. The minimum amount you can refinance is $5,000 and loan terms are available for 5, 7, 10, 15 and 20 years.

Fixed interest rates are available from 3.95% to 6.99% APR. Starting variable interest rates are available from 2.99% to 6.42% APR. If you choose a variable interest loan, the rate will fluctuate throughout the loan term depending on market conditions. Only consider variable interest if you can pay off your student loan refinance quickly. Otherwise, you might be taking too much interest rate risk since your interest has the potential to increase over time.

The interest rates above include a 0.25% discount for using auto-pay. You just need to set up automatic payment from any checking account in order to get the auto-pay discount.

[Look into refinance options on our table here.]

Loan Qualifications

You must be a working U.S citizen or permanent resident with a degree from an accredited U.S. school program to be eligible. In terms of creditworthiness, Laurel Road does not disclose its underwriting requirements. The requirements can change over time. However, Laurel Road is targeting people with good credit.

To have the best chance of approval, your existing student loans should be in good standing. You should be able to demonstrate affordability and have limited negative marks on your credit report.

A cosigner is not required to be eligible for refinancing although you’ll probably need one if you only meet the minimum credit score or income requirements above. Laurel Road does not have an official co-signer release program. However, a representative of Laurel Road confirmed to MagnifyMoney that Laurel Road will consider a co-signer release upon request of the borrower on a case by case basis.

Laurel Road will ask for documents to backup the details of your application like photo ID, pay stubs, proof of graduation and student loan pay off statements.

Fees & Gotchas

Laurel Road is very transparent with fees. There are no fees for origination or loan prepayment. There’s a late fee of 5% or $28 (whichever one is less) for payments that are over 15 days late. Laurel Road also charges $20 for returned checks or electronic payments whether it’s due to insufficient funds or a closed account.

Pros and Cons

Low interest is the major pro of refinancing with Laurel Road. Loan benefits like forbearance, deferment and loan forgiveness are other advantages. Laurel Road may forgive loans if you die or if you can prove a significant reduction in income due to disability. Hopefully these situations don’t occur, but it’s good to know you and your family is covered if it does.

On a less morbid note, Laurel Road offers full or partial forbearance of payments if you can prove that you’re going through financial hardship. You may also qualify to pay just $100 per month while you complete a full-time post-graduate training program like an internship, fellowship or residency. If you graduate less than 6 months before refinancing, Laurel Road may allow you to defer payments for up to 6 months.

There aren’t many disadvantages of going with Laurel Road other than it not having an official co-signer release program with explicit qualification terms. This may be a turnoff for cosigners since your loan will likely appear on his or her credit report until it’s repaid.

Student Loan Refinance Alternatives

How does Laurel Road stack up to other available student loan refinances?

SoFi has a higher rate cap for fixed interest and a higher starting rate cap for variable interest than Laurel Road. SoFi currently offers variable rates from 2.815% APR and fixed rates from 3.35% APR(if you sign up for autopay). However, the SoFi refinance does come with a benefit comparable to Laurel Road called unemployment insurance. If you’re laid off, SoFi will pause your payments and help you find a new job.

SoFi

APPLY NOW Secured

on SoFi’s secure website

CommonBond has similar rates to Laurel Road. Fixed interest rates are available from 3.35% APR and variable interest rates are available starting at 2.81% APR (if you use autopay). Although to qualify for the CommonBond refinance you must have obtained a degree from one of the graduate programs on its eligibility list. On the other hand, Laurel Road will refinance any loan (graduate or undergraduate) from an accredited program in the U.S.

Who Will Benefit Most From This Refinance?

The Laurel Road refinance may work out really well for people who need to complete a post-graduate training program before finding a job in their profession. Since Laurel Road allows for reduced payments in this circumstance, you’re given some leeway until you can earn your full professional salary. Still, you should compare the benefits of any Federal loans you have to the benefits of a refinance before making a decision.

Customize Student Loan Offers with MagnifyMoney tool

*We 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.

Taylor Gordon
Taylor Gordon |

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

TAGS: ,

Advertiser Disclosure

College Students and Recent Grads, Reviews, Student Loan ReFi

LendKey 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.

LendKey Student Loan Refinance Review

Updated August 8, 2017

Could you imagine trying to find the best student loan refinancing rate from community banks and credit unions on your own? How would you do it? Would you call every bank and credit union and ask for help? What a nightmare.

LendKey has relationships with 300+ community banks and credit unions all over the United States. LendKey* can issue loans to residents in any of the 50 states. This keeps you from having to pound the pavement by your lonesome. LendKey’s website will show you the best rate for refinancing your student loans.

Since 2007, LendKey has been a one stop shop for student loan refinancing. It also offers other types of loans. But for the sake of this review we’ll be focusing on how LendKey takes care of graduates looking to improve their debt situation. Fixed APRs range from 3.15% – 7.26%. Variable rates start as low as 2.58%. (All of these rates include the auto-pay discount). LendKey is one of the top four lenders in MagnifyMoney’s survey of where to refinance your student loan.

Who can benefit from using LendKey? Anyone hoping to refinance their student loans should consider LendKey. It is easy to apply:

If you’re on the fence about refinancing, here are some of the benefits to be gained:

Lower Payments

Refinance your way to a more manageable monthly payment.

Lower Rates

Spend less on interest by getting a lower rate than the aggregate of all individual student loans.

Simplified Finances

Making payments on multiple loans to multiple institutions at different times of the month can be quite the hassle. It’s much easier to remember just one payment. Many lenders even let you consolidate both private and federal loans.

Different Repayment Options

Different lenders offer different repayment options. It’s wise to explore all the options to determine what makes the most sense for your particular situation.

Pros of Using LendKey

A Unified Application Process

This is hugely important. With LendKey, you’re not shuffled through tons of screens on different domains – all using different logons and different (confusing!) user interfaces. Within 5 minutes, a person can navigate through LendKey’s application process. This means after 5 minutes, you can see how much you can save by refinancing. You can even choose what loan you want.

Cosigner Release Available

Yes, you can secure a low interest rate and then cut loose your cosigner. Once you prove you are responsible – LendKey no longer needs a cosigner tied to your account. This may help convince a cosigner to work with you initially. They won’t need to be on the hook for long. Once you’ve made 12 full and consecutive on-time payments, your cosigner may be released. LendKey does a credit check and examines your income to see if you are free to go it alone.

No Origination Fee

This is helpful since it means you are free to shop around without feeling committed.

Further Interest Rate Reduction

1% interest rate reduction once 10% of the loan principal is repaid during the full repayment period. This is subject to the floor rate.

0.25% ACH Interest Rate Reduction

Many lenders reduce interest rates by a quarter percent for borrowers who agree to automatic payments.

Federal and Private Loans Can Be Consolidated Together

However, you lose some federal benefits in doing so. Things like free insurance (provided with federal loans if you are killed or severely disabled), public service forgiveness and military service forgiveness as well as income-based repayment plans. Grace periods will likely be omitted when writing the new consolidated loan.

Over 40,000 Borrowers Serviced

As of January 2016, 40,000 people have used LendKey’s services.

Excellent Customer Support

According to cuStudentLoans (which LendKey owns so take this with a grain of salt), 97% of customers are satisfied. Customer support comes out of New York and Ohio. Phone support is available each day from 9AM to 8PM EST.

For what it’s worth, I called into support 5 times at random. The support I received from the sales team was really great. Even the gentleman with only 6 months of experience was quite knowledgeable.

Eligible Schools

This list of eligible schools is 2,200 and growing. Chances are your school is on the list. However, LendKey doesn’t encourage students to submit eligibility requests as other student loan refinancers do.

Return Policy

Yes, you can ‘return’ your loan. LendKey offers a 30 day no-fee return policy to allow you to cancel the loan within 30 days of disbursement without fees or interest. That’s pretty incredible.

Cons

LendKey Doesn’t Give You the Complete Picture

LendKey doesn’t help a lot with stacking institutions against each other. I suppose this is meant to not to play favorites. However, it would be nice to be able to read about each institution within the LendKey interface. I’d still advise opening up another tab to research the banks you are considering.

The Fine Print You May Miss

Since LendKey is a loan matchmaker, there isn’t a lot of fine print on the site. This means a person still needs to review the fine print of each institution before finalizing his or her loan as mentioned before. LendKey does a fantastic job of getting you 90% of the way. But that last 10% of fine print is between you and your lending institution. Read through everything before signing up for a new loan.

I read the Better Business Bureau complaint log for LendKey. There are only 11 complaints in the past 3 years. SoFi (a competitor) has 18 and another competitor, Earnest, has no complaints. These complaints were mostly small misunderstandings between the LendKey support team and the borrowers.

The Application Process

There are four steps to the simple application process. Step 1 is for estimating monthly payments for a private student loan. It’s simple. You identify the amount you’d like to borrow and fill in a radio button indicating your credit is fair, good, or excellent. The last part is where you enter which state you live in. This is because many programs are state specific. Step 1 takes 1 minute.

Step 2 takes 2 minutes. This is the step where you compare the rates and offers available to you. Choose what works best for your unique situation.

Step 3 again only takes 1 minute. This is the actual application. As mentioned earlier in this article, this process is done through the LendKey interface. And don’t worry, information inputted into LendKey is safe (privacy policy).

Step 4 takes 10 minutes. This is the step where a person verifies identity, school, and income (screenshots/pictures work so there’s no hassle with scanning!). You will know if you are approved during this step.

As with any company, there are competitors. Here are two worthy rivals also worth considering:

Alternatives to LendKey

SoFi

SoFi stands out with a job placement programs, free wealth management for borrowers and even a dating app. More importantly, SoFi has low interest rates, with variable rates starting at 2.815% and fixed rates starting at 3.35%.

SoFi

APPLY NOW Secured

on SoFi’s secure website

Earnest

If you have a low credit score but have potential to earn a good income, Earnest will treat you well. Earnest looks beyond a simple credit score. The application process examines employment history, future earning potential and overall financial situation.

Earnest seems to take a very personal approach to each customer. A customer states an amount they can pay each month and Earnest will give them a loan, accordingly. Earnest also lets borrowers skip a payment each year. This could come in handy if money gets tight around the holidays. Just keep in mind, this can increase your future payments to compensate for the missed on.

Fixed interest rates start at 3.35% and variable interest rates start at 2.57%.

However, Earnest isn’t available for all US residents.

Final Thoughts

LendKey runs a fantastic student loan refinancing division. The company offers many, many customizable options with very few downsides. With no application fee, it’s worth seeing what this student loan refinancing powerhouse can do for you.

Customize Student Loan Offers with Magnify 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.

Will Lipovsky
Will Lipovsky |

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

TAGS: ,

Advertiser Disclosure

Student Loan ReFi

Should You Refinance Your Student Loans with a Credit Card?

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.

Using a balance transfer credit card can be a great way to lower the interest rates on your debt to help you save money and pay your debt off faster. Most people only think about doing a balance transfer with high-interest credit card debt, but recently I’ve been considering a 0% interest balance transfer credit card to help me pay off my student loan.

After making my final credit card payment to be credit card debt free, I started thinking about how I could use a balance transfer offer extended by my creditor to help pay off other types of debt I still have. Since the highest interest debt I have remaining is my student loan, this is what I’m considering refinancing with a 0% interest balance transfer. My student loan only has a remaining balance of about $6,000, which means I could transfer the entire balance to the credit card and pay it off before the promotional rate expires, if I pay it off aggressively.

Of course, there are lots of reasons why you could choose to refinance or consolidate your student loans. I was curious whether or not a balance transfer could be a viable option as well.

Here are some of the pros and cons you should consider before deciding to refinance your student loans with a balance transfer credit card.

Benefits of Refinancing Student Loans with a Balance Transfer Credit Card

There are several benefits you could take advantage of by refinancing your student loans with a balance transfer credit card.

A Lower Interest Rate

One of the main reasons people choose to refinance student loans is to lock in a lower interest rate. For example, my student loans are at 6.8%. If I do a balance transfer to a 0% interest credit card, I could save hundreds of dollars on interest through the end of the 0% interest rate period on the balance transfer.

But keep in mind that not all balance transfers are created equal. You might get all kinds of different balance transfer offers from companies trying to entice you to sign up for a new credit card, or even transfer a balance to a card you already have. Some of these transfer offers will be better than others. You might encounter offers that have a 1% to 3% interest rate for a certain period of time, usually 12, 18, or 24 months. But the best balance transfer offers have a 0% interest rate, obviously saving you more on interest than the others.

Pay Off Student Loans Faster

Transferring student loan debt to a credit card can save money, but only as long as you get the balance transfer paid off before the promotional interest rate expires. This time limit is a big motivation for people to pay extra on their student loans to make sure the balance transfer is paid off before it expires. If you struggle with being motivated to make extra payments, the reality that your interest rate may spike up to 15% or more after a few months may be just the motivation you need to get serious about paying off debt. It’s worked well for me in the past when I’ve transferred high-interest credit card debt to a 0% balance transfer credit card, helping me to pay off $5,284.18 much faster than I would have otherwise.

Drawbacks of Refinancing Student Loans with a Balance Transfer Credit Card

Although using a balance transfer to help pay off your student loans sounds like a great way to save money and pay your debt off faster, there are some potential downsides you should be aware of.

Balance Transfer Fees

A lower interest rate makes balance transfer credit cards an attractive option for those looking to refinance debt, but you need to consider more than just the interest rate before deciding to refinance your student loans with a balance transfer credit card. Make sure you consider the balance transfer fee that many credit cards charge. This can eat away at the amount of money you save on interest. Luckily, some credit cards do have a cap on this fee at $50 or $75, which can be helpful if you plan to transfer a large balance that would otherwise result in a fee higher than that cap. But at that point, it could be difficult to get your student loan transfer paid off before the promotional interest rate on the balance transfer expires.

There are balance transfers without fees, but your options may be limited. If you find a no-fee, 0% interest transfer option you qualify for, it’s almost a no-brainer to use it to pay off other debt.

Potential Loss of Savings on Interest

As mentioned, it’s imperative that you pay off your entire balance transfer before the promotional interest rate expires in 12, 18, or 24 months. If you don’t, the high interest rate after the transfer expires will quickly negate any interest savings you earned by doing the transfer in the first place. In fact, you may end up paying more in interest than if you’d skipped the balance transfer in the first place.

You May Not Qualify

In order to use a balance transfer credit card to refinance your student loans, you first have to qualify for one. In order to qualify for many balance transfer credit cards you must have a credit score of at least 680.

Applying Could Ding Your Credit Score

If you don’t already have a credit card with a balance transfer offer available, you may need to apply for a new card. Anytime you apply for a new line of credit, it will ding your credit score slightly. This may or may not be an important factor depending on what your score is and if you plan to apply for any other credit cards or loans in the near future.

Loss of Federal Student Borrower Protections

A final and very important consideration to think about before you decide to refinance your student loans with a balance transfer credit card is the loss of student loan protections you may have. If you are refinancing federal student loans, you will lose the protections that are offered to you as a borrower, such as:

  • Income-driven repayment plans
  • The opportunity for student loan forgiveness
  • Deferment or forbearance
  • Discharge upon permanent disability or death

Some credit card companies may be willing to work with you in an emergency situation, but chances are high that even in those situations the flexibility offered to federal student loan borrowers is far greater. In some cases, you may be better off not refinancing your student loans in order to maintain your borrower protections.

With most low or 0% interest balance transfer credit cards, you can’t miss a payment or pay late. If you do, your promotional interest rate may be void and you will be subject to the regular interest rate, which could be 15% or more depending on the card and your credit score.

Despite these drawbacks, doing a balance transfer to help pay off your student loans can be a good idea if your goal is to get out of debt quickly while saving money on interest.

Kayla Sloan
Kayla Sloan |

Kayla Sloan is a writer at MagnifyMoney. You can email Kayla at Kayla@magnifymoney.com

TAGS: , ,

Advertiser Disclosure

Reviews, Student Loan ReFi

4 Best Parent PLUS Loan Refinance Options

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.

mortar board cash

Updated August 21, 2017

Are you a parent who is still repaying student loans taken out to help your children finance their education? While rising student loan debt totals are concerning for graduates, Parent PLUS loans can be troubling for those in their 40s and 50s trying to plan for retirement.

If you’re in this situation, you should consider refinancing your PLUS loans to lower your interest rate and make the loan more affordable. Direct PLUS loans have had interest rates ranging from 6 – 8% over the last few years, and many refinance programs have rates as low as 2% – 4%. Refinancing can save you hundreds of dollars per month.

Below are the best Parent PLUS refinance programs currently available. We encourage you to check each one out to see which suit your needs the most. You should shop around with each lender with whom you think you can qualify. All credit inquiries made within a 30-day period count as one inquiry in the eyes of the credit bureaus.

A Word of Warning on Refinancing

Thankfully, most student loan refinance programs and Parent PLUS refinance programs don’t have fees associated with the loan, so you don’t need to worry about paying origination or application fees. However, you should do the math to make sure refinancing is worth the paperwork.

If you extend your repayment term, you’ll have a lower monthly payment, but you’ll pay more over the life of the loan due to the amount of interest that will accrue. Additionally, if you’re trying to retire sooner rather than later, extending your term might not be in your best interest.

Ideally, you should find a lender willing to refinance your loan on similar terms with a lower interest rate. If your current loan balance is $10,000 and you have an 8% APR with 5 years remaining, and you refinance to a 5.99% APR with 5 years, you’ll save $568.95 on interest.

Beyond interest rates, you should also be aware that refinancing your Federal Direct PLUS loan means giving up several benefits specific to Federal student loans. Private lenders don’t offer the same repayment assistance, though some lenders are more flexible than others.

For example, you’ll no longer have access to different repayment plans, such as the Graduated, Extended Repayment Plan or Income-Contingent Repayment. Your loans won’t be eligible for forgiveness under the various Federal student loan forgiveness programs. You’ll also lose out on the benefit of forbearance and deferment, which temporarily allows you to pause payments in the event you experience financial hardship.

If you haven’t been struggling with paying back your PLUS loans, then losing these benefits might not concern you, but it’s a factor you should consider. Otherwise, if you experience difficulty making payments, you should reach out to your lender to see if any other payment arrangements can be made.

SoFi Parent PLUS Refinance Program

SoFi is one of the leaders in the student loan refinance industry, and it offers refinancing specifically for Parent PLUS loans.

  • You can refinance a minimum of $5,000 up to the cost of attendance
  • Fixed APRs range from 3.35% – 6.75%
  • Variable APRs range from 2.82% – 6.49% with autopay
  • No application or origination fees, and no prepayment penalties
  • Soft credit inquiry with pre-approval; hard inquiry once you accept the loan
  • Should have good credit, but it also takes your employment and credit history into account

SoFi

Citizens Bank Refinance Program

Citizens Bank doesn’t offer a separate Parent PLUS loan refinance program like SoFi does, but you can refinance any student loan under its Education Refinance Loan.

  • There’s a minimum of $10,000 with a maximum up to $170,000 depending on the type of degree your child received
  • Fixed rates: 6.64% APR to 7.14% APR (with autopay)
  • 5, 10, 15, and 20 year terms available
  • No origination, application, or disbursement fees and no prepayment penalty
  • Hard credit inquiry
  • You need a minimum annual salary of $24,000
  • You can apply with a cosigner

Citizens Bank

Laurel Road (formerly known as DRB) Parent PLUS Refinance Program

Laurel Road also offers a Parent PLUS refinance program with low interest rates.

  • A minimum of $5,000 is required to refinance and there’s no maximum amount
  • Variable rates: 2.99% – 6.42% (with autopay)
  • Fixed rates: 3.95% – 6.99% (with autopay)
  • Terms of 5, 10, 15, and 20 years are available, though you can request a specific term under 20 years
  • Also offers a hybrid loan (mix of fixed and variable rates), but you must inquire about it
  • Child needs to have graduated college and be professionally employed
  • No origination fee or prepayment penalty
  • Available in all 50 states
  • Hard credit inquiry used

Laurel Road

CommonBond Parent PLUS Refinance Program

CommonBond is dedicated to making the refinance process as simple as possible for students, and has recently introduced a refinance program specifically for Parent PLUS loans.

  • The maximum amount you can refinance is $110,000
  • Fixed APRs range from 3.35% to 7.12%
  • Variable APRs from 2.81% to 6.74%
  • Hybrid APRs (5 years at fixed, then 5 years at variable) are offered
  • No application or origination fees, and no prepayment penalties
  • 5, 10, 15, and 20 year terms available (hybrid loans offered on a 10 year term)
  • Temporary loan forbearance is available if certain requirements are met
  • Soft credit inquiry first, then hard credit inquiry if you accept the loan

CommonBond

Keep in mind some lenders, such as SoFi, CommonBond, and DRB, offer the option to transfer your PLUS loans to your child. The Direct PLUS loan doesn’t offer this choice. It’s a great option to have if your child can handle making the payments.

There are many Parent PLUS loan refinance programs being created in wake of the success private lenders have had with refinancing regular student loans. Keep an eye out for them in case you’re not eligible for these. You can also check with your local credit union to see if they have any options available, but be sure the math works out in your favor, as some aren’t offering the best rates. Don’t forget – it’s worth shopping around for the most savings!

Erin Millard
Erin Millard |

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

TAGS: ,

Advertiser Disclosure

Reviews, Student Loan ReFi

Kentucky (KHESLC) Student Loan Refinance Review: Fixed APR as Low as 3.99%

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.

Kentucky (KHESLC) Student Loan Refinance Review

Kentucky’s student loan refinance program is operated by the Kentucky Higher Education Student Loan Corporation (KHESLC). Although the KHESLC primarily services Kentucky residents, this student loan refinance is open to residents of some other states, as well.

At present, there are over 40 million Americans repaying student loan debt. So it’s safe to say, finding the most efficient way to tackle student loan debt is at the top of many minds. Refinancing your student loans can get you a lower, fixed interest rate and consolidate multiple student loans into one easy payment.

Lenders like LendKey and SoFi have led the pack in student loan refinance products by offering some of the lowest rates around. More state-run student loan refinance programs are popping up as well to answer the call of borrowers who want to refinance their education debt for interest savings.

In this post we’ll cover:

  • The KHESLC loan terms
  • Eligibility requirements
  • Student loans you can refinance
  • Pros and cons

KHESLC loan terms

The KHESLC refinance offers fixed interest rates starting at 3.99% APR. KHESLC also offers a rate reduction of 0.50% if you make payments through auto-pay. Factoring in this discount, the lowest rate KHESLC will offer is 3.49% APR.

The loan terms are 10, 15, 20, or 25 years. The minimum amount you can refinance is $7,500.

The KHESLC refinance has no fees, including no prepayment penalty or origination fees.

Eligibility requirements

This refinance is open to residents of Alabama, Georgia, Indiana, Kentucky, Mississippi, Missouri, Ohio, Tennessee, Virginia, and West Virginia.

To qualify, you must be employed for the past 12 consecutive months, and you need a credit score above 670.

A co-signer is not required unless you can’t meet income and credit requirements. However, applying with a co-signer even if you do qualify on your own can get you a lower interest rate.

Loans that you can refinance include private student loans, graduate or parent PLUS loans, Stafford Loans, and Perkins Loans. Students can refinance their loans together with parent PLUS loans. This means parents can add their parent PLUS loans to their children’s refinance to hand over the payment responsibility.

KHESLC borrower protections and benefits

The KHESLC is a private student loan refinance. Private student loans often come with limited benefits and protections to support borrowers in times of need. However, KHESLC is noteworthy in this area. For the interest rate, you can get a 0.50% rate reduction just for using auto-pay. That’s a nice perk.

Besides a competitive interest rate, KHESLC offers:

  • Death and disability benefits
  • Forbearance
  • Graduated payment plans
  • Co-signer release

If you pass away or become permanently disabled before your loan is paid off, you and the co-signer can be released from the debt. If you’re a parent borrower and your child who benefited from the loan passes away before it’s paid off, you can also be released from the outstanding debt.

Besides the protections in tragic situations, the KHESLC refinance has a forbearance option. If you experience a period of hardship, you can request a temporary break from payments. You can get a maximum of 36 months in forbearance throughout the life of the loan term.

There’s also a graduated repayment plan that gives you a reduced payment at first and then increases the payment by 10% every two years. Before taking advantage of this perk, understand the implications of paying less up front. Paying less can lengthen your loan term and, ultimately, increase the cost of your loan.

Lastly, KHESLC allows for co-signer release. You can apply for co-signer release after you make 36 on-time, regularly scheduled payments on the loan. However, you will have to go through a credit review at the time of the release to confirm you meet eligibility criteria.

Should you refinance federal student loans?

We usually go through the typical federal student loan disclaimer when discussing refinances because understanding what you forfeit with a refinance is important.

In this case, KHESLC offers some borrower benefits and protections that can make the decision to leave your federal student loans behind less drastic.

Some major federal loan borrower benefits include forbearance, deferment, income-based payments, and loan forgiveness. Forbearance and deferment can put a pause on your student loan payments temporarily if you’re unable to pay due to economic hardship. KHESLC also offers this option.

Income-based payment plans cap your monthly payment based on your family size and income. If you’re in an entry-level job or underemployed, an income-based program can help make your monthly payments manageable.

Keep in mind, the same downside applies here as with the KHESLC graduated payment plan. Lower initial payments can stretch out your loan term. Although, for federal loan income-based plans, after making payments for 20 to 25 years any remaining student loan balance can be forgiven.

Lastly, Public Service Loan Forgiveness is a program that will forgive your federal student loans sooner than later. To qualify, you must make 120 monthly student loan payments while working in an approved public service position. It should take you around 10 years to get forgiveness. You may want to hold off on refinancing federal student loans if you’re considering public service.

You can compare what federal student loans have to offer against private student loans here.

Pros and cons

Pro: Low and fixed interest rates. The starting interest rate offered by the Kentucky refinance is as low as the student loan refinances offered by some of the most competitive lenders. We’ll talk about a few of these lenders below.

Con: Limited eligibility. This student loan refinance is only open to residents of 10 states. If you live outside of these states, unfortunately, you’re out of luck.

Pro: The borrower benefits and protections. Altogether for protections, there’s deferment, co-signer release, graduated payment, and the death and disability benefit. If you choose to refinance your federal loans with KHESLC, you can take comfort knowing there are still some backup protections in times of trouble.

Con: Forfeiting federal student loan perks. The KHESLC benefits are nice, but there are federal loan benefits like forgiveness that you would no longer have access to if you refinance.

Pro: The parent PLUS loan refinancing opportunity. Parents with parent PLUS loans can hand over the responsibility of payment to their children. Children can refinance parent PLUS loans together with their other loans using the Kentucky refinance.

Who will benefit from the KHESLC refinance?

Ultimately, borrowers who will benefit most from this refinance will be those who live in the 10 states where the refinance is offered. That’s a given. With location restrictions aside, the borrower benefits are impressive. The starting interest rate is impressive as well.

In fact, it’s right on target with other top student loan refinances available. The top 4 student loan refinances at this point are CommonBond, Earnest, LendKey, and SoFi because they offer the lowest interest rates. Starting fixed interest rates from these lenders range from 3.15% to 3.50% APR.

Of course, the lowest rates offered by all lenders are given to those who are the most creditworthy. Applying with a co-signer will give you a better chance at qualifying for a low rate with KHESLC.

You can also take the time to strengthen your credit score before applying to obtain a competitive rate with KHESLC or any other lender. Be sure to shop around with multiple lenders when looking for a refinance to get the best deal.

Taylor Gordon
Taylor Gordon |

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

TAGS: ,

Advertiser Disclosure

News, Personal Loans, Student Loan ReFi

Marketplace Lenders Continue To Attract Venture Capital, Talent and Customers

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.

MagnifyNews-02-01

This week, marketplace lenders demonstrated that they still have the ability to raise venture capital and attract high profile talent. A series of announcements made clear that competition will continue to intensify, and the risk to the traditional banking sector will only increase. Here is a roundup of the announcements making news this week.

SoFi Surpasses $4 Billion In Funded Loans And Hires Arthur Levitt

Last week, the Wall Street Journal reported that SoFi had raised $1 billion of equity capital. This week, SoFi made more news. The business announced that it has originated more than $4 billion of loans. SoFi created the student loan refinancing market and has quickly achieved market dominance. The business has recently expanded its product set to include personal loans and mortgages. SoFi has been able to grow aggressively thanks to its transparent application process, low interest rates and investment in customer service. The company is the only lender to have received an A+ Transparency Score from MagnifyMoney.

Arthur Levitt, the longest service Chairman of the SEC, will become an advisor to SoFi. Although marketplace lenders have their roots in Silicon Valley disruption, the most successful businesses have been able to attract members of the global financial elite to their advisory boards. LendingClub has had a long relationship with Lawrence Summers, the former Treasury Secretary. As marketplace lending grows, the regulatory environment will become increasingly important. Seeking the counsel and connections of former regulators and government officials will be critical to driving a successful industry.

CommonBond Raises $35 Million

CommonBond is a marketplace lender focused on bigger ticket debt associated with graduate degrees. The business targets doctors, lawyers and MBAs early in their career and with a lot of debt. The business raised $35 million in its Series B round, and plans to use the capital to expand its team to 60 employees, enhance it technology platform and acquire customers.

Orchard Raises $30 Million

Orchard Platform provides technology and resources to marketplace lenders. Given the increasing number of marketplace lenders, Orchard has seen demand for its technology and services soar. The capital will be used to expand its product set, team and marketing.

Fundbox Raises $50 Million

Fundbox is a factoring business that provides invoice cash advances to small businesses. This week it announced a $50 million Series C fundraising with participation from Amazon CEO Jeff Bezos. One of the biggest problems facing small businesses is cash flow while waiting to get paid by customers. Factoring is one of the oldest forms of lending, having originated in Babylonian times. Today, a number of Silicon Valley companies are trying to bring modern technology and analytics to the factoring model. Bezos would be particularly interested, given the number of small businesses actively selling on the Amazon platform.

Banks Under Threat, And Join The Game

Marketplace lenders are not really competing with each other. Their real target is the traditional banking sector. Personal loans are being marketed as cheaper ways to deal with credit card debt. LendingClub advertises that it enables customers to reduce the interest rate on their debt by 31%, on average. Within small business lending, companies like Funding Circle are stealing lucrative small business credit card customers by offering lower interest rates and more cash. Every high margin business of a traditional bank is under attack. Although the volume of business by marketplace lenders is small relative to traditional banks, it is growing exponentially. Over the next 24 months, big banks are going to start to feel the pressure.

And some big banks are already joining the competition. Discover has rapidly become a leading online bank and online lender. Goldman Sachs has recruited a team, and is building out its loan capabilities. And even smaller banks are starting to compete with Silicon Valley companies. Laurel Road (formerly known as DRB), a Connecticut bank, just surpassed $1 billion of student loan refinancing booked.

For consumers, the amount of choice is increasing dramatically. On paper, the four biggest banks dominate the United States market. However, the range of choices is growing dramatically to the benefit of borrowers, savers and investors everywhere. As this week has demonstrated, that competition will only increase.

Nick Clements
Nick Clements |

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

TAGS: , , , , ,

Advertiser Disclosure

Reviews, Student Loan ReFi

U-fi 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.

mortar board cash

Updated 2/24/16

Choosing to refinance your student loans is an important decision. A decision that will impact your finances for years to come, and making the wrong decision could cost you.

The Offer

U-fi Student Loans has more than three decades servicing student loans. It provides both loans to students in school as well as refinance options for graduates. There are easy applications to get you started with variable student loan refinances rates as low as 2.79%. It has no fees for origination, disbursement, or prepayment, as well as a program that gives you cash back for on time payments.

U-fi Student Incentives

U-fi offers several incentives for students and that have good grades and graduates for timely payments:

Good Grades Reward: Receive up to 1.5% cash back on each loan when you submit proof of your good grades within 180 days of the end of the academic period that you used the funds to finance. Good grades are considered a 3.0 out of a 4.0 Grade Point Average Scale (or equivalent). The good grades rewards are valid for Undergraduate, Graduate, MBA, Law, and Health Professional Loans only.

On-Time Payments Reward: When you make 12 monthly on-time payments consecutively, a cash back reward of 1.5% is earned on the current loan balance at the time you met the requirements for the reward. This reward is only available for refinanced loans.

The total limit for all cash back rewards per person is $500 per calendar year.

How To Apply

In order to apply on your own, you must:Be a US citizen or permanent resident with a Social Security number and be residing in the US

  • Be the legal age of majority. In most states this is 18, but in Alabama it is 19, and in Mississippi or Puerto Rico the age of majority is 21
  • Be attending (or have attended) at least half time at an eligible school
  • Borrow a minimum of $1,000
  • Not exceed the maximum student debt limits
  • Have an annual income of at least $12,000

If you are applying with a cosigner, then some of the restrictions are lifted and you must:

Your co-signer must:

  • Be a US Citizen or permanent resident with a valid Social Security number and be residing within the US
  • Be of the legal age of majority in their state or territory
  • Have an annual income of at least $12,000

In order to apply, you will need your name, address, phone number, email address, date of birth, Social Security number, driver’s license or government ID number, employer’s name, address and phone number (if applicable), your gross annual income, the name and address of the school you wish to attend or are currently attending, and your major.

You will also need you grade level and expected graduation date (if applying for first time student loans), the loan amount you wish to request, the school enrollment period for the loan (if applicable), and a personal reference name, address, and phone number.

The Fine Print

Borrowers applying for a loan by themselves from U-fi must have a fairly strong credit history. However, the credit restrictions are loosened when applying with a cosigner.

Interest rates vary based on creditworthiness, repayment options, repayment term, and the type of loan you are applying for:

Graduate APRs:

  • Variable interest rates range from 2.79% to 8.14%
  • Fixed interest rates range from 3.35% to 8.24%

In order to obtain financing from U-fi, you must have attended an eligible school. To find out if your school is eligible, you can search here.

If you choose to take out student loan with U-fi while in school, you have 3 options for repayment:

  • Immediate Repayment: start making principal and interest payments while in school
  • Interest-Only Repayment: Make interest payments while in school and during the first 6 months after you leave school, or when you fall below half-time enrollment
  • Deferred Repayment: Make no payments while you’re in school and during your 6 month grace period after you leave school, or when you fall below half-time enrollment

In addition to choosing your repayment options, you can choose your repayment terms, either 5 years, 10 years, or 15 years.

Even though you might be required to apply with a cosigner, you can request that the cosigner be released after the borrower makes 24 consecutive, on time payments.

The maximum loan amount that U-fi can issue depends upon the degree program you are enrolled in, as well as the total amount of debt you have. It refers to the total debt you have as the Aggregate Student Loan Limits, and your total debt, including any loan through U-fi, cannot exceed that amount. These limits are as follows, and are the same for both new loans and refinance loans:

  • $125,000 for undergraduate degrees
  • $150,000 for graduate or doctorate degrees
  • $175,000 for MBA or graduate law degree
  • $225,000 for graduate Health Professions degree

As with any student loan, U-fi students loans have pros and cons that you need to carefully consider.

Pros

  • 25% APR discount for automatic payments
  • APRs as low as 2.10%
  • Undergraduate, graduate, and refinance loans
  • Can borrow as little as $1,000, or as much as the aggregate student loan limits for your degree program
  • Cash back incentives up to $500 per calendar year
  • No origination, disbursement, or prepayment fees
  • Cosigner release after 24 consecutive on time payments
  • Flexible repayment options
  • Terms of 5, 10, or 15 years

Cons

  • Maximum undergraduate loan amount of $125,000
  • Maximum graduate loan amount of $150,000 to $225,000 (depending upon program)
  • Maximum APR of 8.24%
  • You must attend an eligible school
  • Your debt cannot exceed the aggregate student loan limits for your degree program

How It Stacks Up Against The Competition

SoFi offers terms of up to 20 years with fixed rates ranging from 3.35% to 7.125% and variable interest rates ranging from 2.815% to 6.740% with autopay. There is no maximum loan amount, and no origination fee.

SoFi

APPLY NOW Secured

on SoFi’s secure website

Earnest also offers student loan terms of up to 20 years, with fixed APRs ranging from 3.35% to 6.39%. Earnest also has no maximum student loan amount and applying only requires a soft credit pull. Variable rates range from 2.57% – 6.19%.

As the cost of college tuition rises, consider your options for student loans carefully. U-fi is an excellent option if you plan to have good grades, enroll in automatic payments, and if you or your cosigner has good credit. With its lowest interest rate for student loans refinance sitting at 3.31%, U-fi beats out almost every other student loan option. However, its highest APR is 11.75%, which is much higher than other lenders such as SoFi or Earnest.

Still, U-fi is an option worth considering for its cash back rewards, APRs, and flexibility of repayments terms and options, and refinancing your student loans to save even 1% could save you thousands of dollars in interest over the repayment period.

promo_refi_studentloans_lg (1)

Gretchen Lindow
Gretchen Lindow |

Gretchen Lindow is a writer at MagnifyMoney. You can email Gretchen at gretchen@magnifymoney.com

TAGS: ,

Advertiser Disclosure

News

SoFi Raises $1 Billion To Take On Banks

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.

MagnifyNews-02-01

Today the Wall Street Journal reported that SoFi has raised $1 billion, in a private financing round that values the company at $4 billion. The staggering equity investment round is one of the largest ever, and it makes SoFi one of the most valuable FinTech startups in the country. The money will give SoFi plenty of dry powder to continue its rapid expansion. Earlier this year, management very publicly talked about going public in 2015 or 2016. However, with the rapid decline of Lending Club’s stock price and general market turbulence, SoFi decided to take advantage of the ample capital available in the private markets.

The investment was led by SoftBank, a prolific Japanese investor that was also an early investor in Alibaba. In addition to SoftBank, Silicon Valley legend Peter Thiel has also invested in the company.

SoFi: It All Started With Student Loans

Large, traditional banks left the student loan market after the federal government stopped guaranteeing losses. However, SoFi saw an opportunity with a specific market segment and product. SoFi very intelligently made two observations:

  1. When students borrow money for college, the federal government gives one flat interest rate for everyone. Whether you are studying Computer Science at Stanford, or drama at a local community college, you get the same interest rate. And you keep that rate after you graduate. There is no reward for people with good jobs and good income.
  2. Recent graduates are treated as “thin files” by FICO (and other credit scoring models). However, a recent Stanford graduate working at Google, earning more than $100,000 a year, is probably a good credit risk regardless of their low FICO.

SoFi wanted to give the borrowers with the best credit risk profile the opportunity to refinance their student loan debt at a lower interest rate. Graduates from some of the nation’s best universities working at some of the world’s most prestigious universities were able to refinance debt that often had 6% interest rates (or higher) to 3% (or lower).

But SoFi didn’t just focus on providing a product with a better interest rate. The customer experience felt completely different from traditional banking. SoFi has focused on building a website with a beautiful, intuitive user interface. SoFi does not have branches, but it does have a team of friendly, on-shore customer service representatives based in the wine country of California. From beginning to end, the process of taking out a loan with SoFi could not feel more different from a traditional bank.

From Student Loans To Personal Loans, Mortgages And More

Some banks are very good at cross-selling to existing customers. One of the best is Wells Fargo, where SoFi CEO Michael Cagney got started. However, Wells Fargo used customer loyalty to charge a premium. Wells Fargo products do not have market-leading interest rates or rewards. SoFi is taking a different approach. The student loan refinancing has been the “hook” product. Once customers feel how different SoFi is compared to other institutions, there is a real opportunity for cross-sale.

SoFi has expanded its product line to include personal loans and mortgages. It has also expanded its risk appetite as the business grows. You no longer need to be a Stanford graduate working at Google to take advantage of SoFi’s products and services. However, SoFi still remains focused on providing the best value to customers with the best credit risk profiles.

SoFi is joining the non-bank mortgage sector, which has rapidly been gaining market share from banks. In the last quarter, non-banks, led by players like Quicken and LoanDepot, have dominated the market. SoFi’s initial mortgage product is a jumbo with a low down payment, which is perfect for millennials living in high cost urban locations.

The Best Products

MagnifyMoney updates market data daily for personal loans and student loans.SoFi is at the top of both tables, offering the lowest rates in the market and some of the best benefits. However, the success of SoFi has brought competition. Earnest has aggressively matchedSoFi on price, and has some unique product innovations. For example, an Earnest borrower can switch between fixed and variable interest rates throughout the life of the loan.

As SoFi continues to expand, consumers should expect continued benefits. Large banks will be under attack, as SoFi continues to deliver the best products with excellent service. The only thing a SoFi customer does not have is a branch. Increasingly, consumers will recognize a branch just isn’t worth the expense or, ironically, the poor customer service.

Nick Clements
Nick Clements |

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

TAGS: ,

Advertiser Disclosure

News

Clinton Unveils Ambitious $350 Billion Plan To Make College Debt-Free

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.

MagnifyNews-02-01

Earlier this week, Hillary Clinton announced a new plan to deal with the rapid growth in student loan debt. Her plan would cost taxpayers $350 billion over ten years. Clinton has focused her campaign on the topic of income inequality, and with the launch of this plan she announced that “I believe one of the single biggest ways we can raise incomes is by making college affordable and available to every American.”

In the plan, Clinton made the following commitments:

  • No student should have to borrow to pay tuition at a public college
  • States will have to spend more on public education in order to receive federal funding
  • The Federal government will increase its investment in education, targeting money on states willing to spend more
  • People with existing student loan debt will be able to refinance their debt to a lower interest rate

Student loan debt now exceeds $1.2 trillion, more than credit card debt. A number of factors have led to the increase in debt. Universities have been on a spending spree, with often dubious benefits for students. In addition to the infamous rock climbing walls that adorn most campuses, the ratio of expensive administrators has been increasing dramatically. As universities have increased tuition, states have been cutting their budget for state universities. As a result, the cost of a state education has increased by 42% between 2004 and 2014.

For-profit schools have become experts at extracting federal student loans while providing questionable educational value. The most famous is Corinthian College, which has since closed. However, there are still many for-profit colleges with single-digit graduation rates and obscene costs. These colleges disproportionately target the poor, often leaving students with debt and no increase in earnings potential.

Default rates on student loan debt continue to soar. 26% of students who graduated in 2009 have already defaulted on their debt. Analysis by the Federal Reserve shows that low income families are the most vulnerable. Families with household income below $40k had a 35% default rate, compared to 11% for families with income above $80k.

Beyond default rates, there are concerns about the impact that student loan debt has on the economic activity of graduates. Graduates with debt would be less likely to take risk, which includes purchasing automobiles or homes. The winners are universities and the federal government, which is profiting from student loan debt. The losers will be the rest of the economy and the recent graduates.

We will explain the key components of Clinton’s plan below.

You Should Not Have To Borrow To Attend A Public University

Clinton believes that students should not have to borrow if they attend an in-state public university. In order to make that a reality, the money will have to come from a few sources.

Clinton is proposing $175 billion in federal grants to help fund state universities. That funding would only be made available to states that commit to increasing funding so that students do not have to borrow to attend school. To cover the cost of living, students would be able to use Pell Grants to cover expenses.

Interest Rates Will Reduce For Everyone

Clinton wants to make it possible for people to refinance their existing student loan debt to a lower interest rate, echoing a proposal from Senator Elizabeth Warren. Ironically, support also comes from Donald Trump, who believes that it is “terrible” that the federal government makes money from student loans. In recent years, a number of private companies have started to build big businesses refinancing student loan debt (learn more here) for the most creditworthy borrowers. However, Clinton would expand the program to refinance the debt for all students.

What About Costs, Graduation Rates And For-Profit Schools?

Student loan debt is a function of the cost of education. The rate of tuition increase has reduced. However, in absolute terms, the increase over the last twenty years is difficult to justify. Universities are racing to attract students willing to pay the highest tuition. To do that, they over-spend on items that do not directly contribute to an improved education. High school students shopping for college are being bankrolled by federal student loans. Decisions, historically, have been emotional. A good college degree helps improve lifetime earning potential, so students want the best college possible, regardless of the cost.

Pouring more money, at both the federal and state level, may only encourage more spending.

The highest default rates on student loan debt remain with students who failed to graduate. As Hillary Clinton noted, over 40% of college students fail to graduate after six years. Graduation rates remain atrocious at many for-profit and public schools. For example the University of Texas at El Paso only has a 4% graduation rate (in four years).  If a student accumulates $5k of student loan debt and has no degree, he is highly likely to default.

Reducing the interest rate on debt is a great way to help people already in debt get out of debt faster. However, as NPR  revealed in their analysis, the benefits of debt refinance will go to the wealthiest borrowers. If you are making minimum wage and have $5k of debt from a college and no degree, you will not find this policy helpful. The people who will benefit most from the lower interest rate will be the people with the highest amount of debt. People with the highest debt tend to be people with graduate degrees, including doctors and lawyers. For the taxpayer, this is a problem. The default rate will not meaningfully reduce, but revenue will.

This issue is crying for bipartisan support. Rarely do you have Donald Trump and Elizabeth Warren agreeing on an issue. Hillary Clinton has been first to put a meaningful proposal on the table. We will be keeping a close eye on the debate as it evolves.

 

Nick Clements
Nick Clements |

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

TAGS: , ,

Advertiser Disclosure

Reviews, Student Loan ReFi

Navy Federal Credit Union Student Loan Consolidation 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.

personal loan_lg

Do you serve in the Armed Forces, Coast Guard, or National Guard? Are you Department of Defense personnel? If so, you’re eligible for membership with the Navy Federal Credit Union (NFCU). That also means you can apply to consolidate your student loans through its program.

If someone in your family is a NFCU member, you’re also eligible for membership. For a complete list of membership eligibility, you can refer to the sidebar on the website.

Interested in learning more? Let’s take a look at NFCU’s student loan consolidation program.

Navy Federal Credit Union Consolidation Terms

There’s one catch you need to know about before applying to consolidate your student loans with NFCU: only private loans are able to be consolidated. Federal loans aren’t eligible.

You can consolidate $7,500 – $125,000 in undergraduate student loan debt, or $7,500 – $175,000 in graduate (or combined) student loan debt.

[NavyFCUSLTerm]All loans are refinanced on a 15 year term[/NavyFCUSLTerm], and only variable interest rates are offered. APRs range from 3.76% – 10.25%, though you can get a 0.25% interest rate deduction by enrolling in automatic payments.

A payment example: if you borrow $10,000 with an APR of 4% on a 15 year loan term, your monthly payment will be $73.97.

Pros and Cons of Navy Federal Credit Union Student Loan Consolidation

Cons

The one obvious downside is that only private student loans are eligible to be consolidated with NFCU. Many graduates carry federal student loans, so double check to ensure your loans are private before applying.

Another negative is that only variable interest rates are available. That means your interest rate can go up at any time during the life of your loan. While interest rates for student loans are capped at 18% (and the chances of that cap being hit are slim), having your payment fluctuate often may make it difficult to fit your student loans into your budget. Fixed rates offer stability.

Pros

One positive is that applicants can apply with a cosigner, and cosigners can apply to be released after 12 consecutive, on-time payments are made. Some lenders don’t offer cosigner releases, or they don’t allow you to apply with a cosigner at all. Cosigners can help get you more favorable rates, especially if your credit history isn’t very established yet.

Another positive is that forbearance is available if you face a period of economic hardship. You can only request forbearance once throughout the life of your loan, and it’s available for up to 18 months. Interest continues to accrue when your loan is in forbearance, but having repayment assistance of any kind, especially with private student loans, is good to have.

Who Qualifies to Consolidate with Navy Federal Credit Union?

To apply to consolidate your student loans with NFCU, you need to be a member, a graduate of an eligible school/program, a U.S. citizen or permanent resident, and a legal adult in the state you reside in. You can check to see if your school is eligible on the first page of the application.

You also need to have a gross monthly income of $2,000, and that income should be reliable. If it’s not, or you don’t earn that much (you should at least be employed), you can apply with a cosigner. They need to be employed, earn $2,000 gross monthly income, and be U.S. citizens or permanent residents.

Application Process and Documents Needed to Consolidate

The standard documents and information are needed to apply to consolidate your student loans with NFCU:

  • Personal information (name, address, phone number)
  • Photo ID (Driver’s License, Passport)
  • Information on your existing student loans
  • Navy Federal Access Number
  • A copy of your degree, diploma, certificate, or transcript
  • Two most recent pay stubs, dated within the last 60 days
  • The previous two years’ tax returns and required schedules, if you’re self-employed
  • The previous two years’ W-2 forms and two recent pay stubs dated within the last 60 days if you’re a commission-based employee
  • A payoff letter from your lender, or a screenshot with your loan’s payoff amount within the next 30-45 days

Cosigners should be ready to provide:

  • Two most recent pay stubs
  • Most recent W-2 form or tax return
  • Pension, Social Security award letter, or 1099R if retired

By applying, your credit will undergo a hard inquiry. The same goes for your cosigner if you apply with one.

There are 6 stages to the application process – applying, reviewing, gathering, approving, signing, and disbursing. You can check to see which stage your application is in by logging into your account.

Who Benefits the Most From Consolidating With NFCU?

Those that are eligible for membership and who don’t have federal student loans (or only need to refinance private student loans) benefit the most from consolidating with NFCU.

The lowest APR (3.51%, with the .25% deduction) isn’t horrible, especially if your private loans are already on variable rates much higher than that. However, there are better options available that will also let you refinance federal student loans.

The Fine Print

[NavyFCUSLOrgFee]There’s no origination fee or prepayment penalty fee associated with the loan[/NavyFCUSLOrgFee].

Unfortunately, when we called to get clarification on late payment fees, the representative that answered the phone wasn’t able to give us an answer. Late fees are considered a different department. [NavyFCUSLLateFee]The standard late payment fee for student loans is $25[/NavyFCUSLLateFee], though.

Alternative Student Loan Consolidation Options

You should shop around. You can find the best options to refinance your student loans here.

Here are two of the best options to refinance:

SoFi has competitive fixed and variable interest rates. Fixed APRs range from 3.35% – 7.125%, and variable APRs range from 2.815% – 6.740% with autopay. You can borrow on terms up to 20 years, and there’s no cap on how much student loan debt you can refinance.

SoFi also offers forbearance in the form of an unemployment program it offers to borrowers. If you lose your job through no fault of your own, SoFi will help get you back on your feet by assisting you with your job search and interview techniques. Plus, your payments can be stopped during this time.

You can get your initial rates and terms with SoFi by applying with them – it won’t affect your credit. If you choose to select the loan you’re offered, a hard credit inquiry will then be used. You must have also graduated from an eligible school or program to refinance with SoFi.

SoFi

APPLY NOW Secured

on SoFi’s secure website

Another lender worth mentioning is Earnest. It’s a close competitor to SoFi, but with a few additional perks. There’s no limit to how much student loan debt you can refinance with Earnest, and you can borrow on terms up to 20 years. Fixed interest rates start as low as 3.20% and variable interest rates start at 2.65%.

The additional perks of Earnest are getting to skip a payment (if you need to – but impacts the interest you pay), and being able to switch between variable and fixed rates. It also lets you get a look at what rates and terms are available to you with a soft credit pull (with a hard pull later on if you want to proceed with the loan).

Earnest and SoFi don’t focus exclusively on any one factor when it comes to determining whether or not to lend to an applicant, which is great if you’re a recent graduate. Your education, employment history, salary, debt-to-income ratio, and cash flow are all taken into consideration. While having a credit score around 700 will help get you approved, it’s not the end of the world if your credit history is on the thinner side.

Shop Around

Shopping around for the best rates is always a good idea when it comes to refinancing your student loans. The purpose of refinancing is to get better terms that make your loans more affordable, and to save you money on interest.

You’re never obligated to take any offers you receive. For example, if you check your preliminary rates with SoFi or Earnest, you can walk away, no questions asked. Lenders know you have to do what’s right for you, and so do the credit bureaus. That’s why as long as you shop around within a period of 30 days, your credit score won’t take too much of a beating. Use that time to your advantage!

Customize Your Student Loan Offers

* 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

TAGS: ,