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College Students and Recent Grads

How to Consolidate Student Loans: Your Complete Guide

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Keeping track of multiple student loans from several different loan servicers gets confusing fast. Fortunately, you can simplify student loan repayment through combining multiple student loans into a single payment.

There are two ways to combine many loans into one: through federal student loan consolidation or via private student loan refinancing. Although the term “consolidation” is sometimes used to refer to both these options, consolidation and refinancing have some key differences.

For instance, federal consolidation only applies to federal student loans, and it doesn’t lower your interest rate. Refinancing, on the other hand, can combine federal and private student loans together, and it could get you a lower rate.

Both approaches have advantages and drawbacks, so it’s essential to weigh the pros and cons before making any changes to your student loans. This full guide will take a deep dive into how to consolidate student loans, as well as compare consolidation and refinancing so you can decide which strategy is right for you.

Student loan consolidation vs. refinancing: The basics

While both consolidation and refinancing can combine several student loans into a single loan, they do so in different ways. This chart shows the key differences between consolidating student loans and refinancing them.


Note that while both consolidation and refinancing can combine loans, you don’t actually have to include more than one loan. There could be benefits to consolidating or refinancing a single student loan.

For instance, a parent borrower might consolidate a parent PLUS loan to make it eligible for Income-Contingent Repayment, which cuts your monthly repayment amount. Or a student might refinance a single student loan to get a lower interest rate and save money.

Even if you have several student loans, you can also cherry-pick one or two to consolidate or refinance, depending on what would be most beneficial.

What is federal student loan consolidation?

Consolidation turns one or more of your federal loans into a new loan, possibly with a new term length. For this, you’ll need to apply for a direct consolidation loan from Federal Student Aid.

You can combine most types of federal student loans, including direct loans (also known as Stafford loans), as well as parent PLUS or grad PLUS loans, and federal family education loans (FFELs).

You’re typically eligible to consolidate school loans once you’ve graduated, withdrawn from school or dropped below half-time enrollment.

6 pros of consolidating student loans

Federal student loan consolidation comes with a variety of benefits, as well as some drawbacks. Let’s look at benefits first.

1. Simplify repayment by combining multiple loans into one

If you consolidate multiple loans, you turn them into a single loan. Instead of having multiple payments each month, you’ll just make one payment toward your new, consolidated loan. You will only have to remember a single interest rate and one loan servicer.

According to a 2017 report from Experian, the average student loan borrower has 3.7 loans. Consolidating these could simplify repayment and make it more manageable.

2. Opportunity to choose a new repayment plan and adjust your monthly payment

When consolidating student loans, you can choose a new repayment plan. You can return to the standard 10-year plan with fixed payments, or you can lower your payments via the graduated repayment plan, in which the payment amounts increase over time. Likewise, you can extend your terms and lower your monthly payment on an extended repayment plan, or choose an income-driven plan which will cap your payments based on your disposable income.

Choosing something long-term will keep you in debt for longer and means you pay more interest overall, but it also could lower your monthly payments. If you’re struggling to keep up with high bills each month, choosing a longer term could save your budget.

3. Chance to choose a new loan servicer

Along with choosing a new repayment plan, you’ll also get the chance to choose a new loan servicer. Your options for federal loan servicers are:

  • Navient
  • Nelnet
  • Great Lakes (now owned by Nelnet)
  • FedLoan Servicing (PHEAA)
  • HESC/EdFinancial
  • CornerStone
  • Granite State – GSMR
  • OSLA Servicing
  • Debt Management and Collections System

If you’ve had a good experience with your current loan servicer, you can stick with them. But if you haven’t, you’ll get the chance to switch and hopefully have better communication with the next.

4. Make parent PLUS loans eligible for Income-Contingent Repayment (ICR)

Parent PLUS loans are designed for parents who are helping pay for their child’s education. But they’re only eligible for one income-driven repayment plan — ICR — and only after the borrower has first consolidated the loan.

After turning your parent PLUS loan into a direct consolidation loan, you can select ICR as your repayment plan. ICR adjusts your payments to 20% of your discretionary income or to the amount your payment would be on a 12-year fixed plan, whichever is lower.

If you still have a balance at the end of the term on your income-driven term (25 years), it could be forgiven.

5. Rehabilitate student loans that are in default

Federal consolidation is also one way to rehabilitate student loans that are in default. If you fall behind on payments, your student loans could go into default, which could result in a host of bad consequences.

Your credit score could plummet, for instance, and the federal government could garnish your wages, tax refund or even Social Security benefits. If your loans are in default, it’s essential to pull them out and get them back in good standing.

One option for doing this is consolidating the defaulted student loans into a direct consolidation loan and placing them on an income-driven repayment plan. Your defaulted loan will be eligible after you make three consecutive, on-time payments.

Once your loan is out of default, it will once again be eligible for federal programs and protections, such as forbearance and deferment.

6. It’s free to apply, and there’s no credit check

Anyone with federal student loans can apply for a direct consolidation loan at no cost. If a company is charging you a fee, beware: You can easily complete the application on your own for free.

What’s more, you don’t need to pass a credit check or meet an income threshold to qualify. As long as you have qualifying loans, you can consolidate.

4 cons of consolidation

Along with the advantages of federal consolidation, there could be some downsides to consider. Make sure you understand the potential cons before applying for a direct consolidation loan.

1. You could get a slightly higher interest rate

Federal consolidation doesn’t get you a lower interest rate. In fact, it could actually result in a slightly higher interest rate.

When you consolidate multiple loans, Federal Student Aid determines your new rate by taking the weighted average of your interest rates. Then, it rounds up to the nearest one-eighth of 1%.

This isn’t a big increase, but be aware that consolidation won’t save you money on interest.

2. You’ll pay more overall if you choose a longer repayment term

Not only will consolidation not save you money on interest, but it could cost you more overall if you choose a longer repayment term. For instance, income-driven plans extend your terms to 20 or 25 years.

Your monthly payments will become more affordable, but you’ll also fork over a lot more in interest over the life of the loan. The only way to save on interest would be to pay off your loan ahead of schedule.

Of course, lowering your monthly payments might help your budget in the short term. But make sure you understand the long-term consequences before adding years to your debt.

3. Your previous payments won’t count toward PSLF or forgiveness from an income-driven plan

The federal government offers a few options for loan forgiveness after years of qualifying payments. The Public Service Loan Forgiveness (PSLF) program, for example, awards loan forgiveness after 10 years of working in a qualifying organization.

And income-driven plans, such as Income-Based Repayment or Pay As You Earn, end in loan forgiveness if you still have a balance after 20 or 25 years. To qualify for any of these programs, you must make a certain number of on-time, consecutive payments.

When you consolidate, though, you reset the clock on your payments. Any payments you made before you consolidated wouldn’t count toward the PSLF or income-driven plan requirements. You’d have to start over again, which could mean you won’t see forgiveness for many more years.

Note that if you’re working toward PSLF, you should put your loans on extended repayment or an income-driven plan right away. If you stay on the standard 10-year plan, you won’t have any balance left to forgive after 10 years of service.

4. Private student loans aren’t eligible

Finally, private student loans are not eligible for federal consolidation. You can only bundle federal student loans into a direct consolidation loan.

So if you borrowed from a private lender, such as Sallie Mae or LendKey, you would still have to pay these back separately with your assigned loan servicer.

How to consolidate student loans and apply for a direct consolidation loan

Source: https://studentaid.ed.gov/sa/

If you’re wondering how to consolidate student loans, rest assured the process is easy. According to Federal Student Aid, most people complete the application in less than 30 minutes.

You can apply at StudentLoans.gov with the consolidation loan application and promissory note. Before logging into your account with your FSA ID, collect the personal and financial information listed in the “What do I need?” section. For instance, you’ll need your loan documents to complete the form.

Along with providing your information, you’ll also indicate which loans you want to consolidate, and which ones you don’t (if any). You’ll also choose a repayment plan, whether it’s the standard plan, graduated repayment, extended repayment or an income-driven plan.

Make sure to read over your application before hitting submit, and speak with your loan servicer if you run into any confusion during the process.

Student loan refinancing can also combine multiple loans into one

Federal student loan consolidation isn’t the only way to replace several loans with a single student loan. You can also achieve this through student loan refinancing. While you consolidate school loans with the federal government, you would refinance with a private lender. This lender might be a bank, credit union or an online lender, such as SoFi or CommonBond.

Both federal and private student loans are eligible for refinancing, and you can refinance one loan or several together. Not only could this simplify repayment, but you might also qualify for a lower interest rate. Plus, just as with the federal student loan consolidation, you’ll get the chance to choose new repayment terms.

Refinancing can be a savvy strategy for saving money on your student loans and restructuring your debt, but first, you’ll need to qualify.

3 pros of student loan refinancing

So what are the advantages of refinancing student loans? Here are three big ones.

1. A single monthly payment is easier to track

Refinancing is similar to consolidation in that it can combine several loans together. Your refinancing provider, or the loan servicer it partners with, will be your new loan servicer.

If you refinance a Navient loan with SoFi, for instance, SoFi would be your new point of contact. And you’ll only have to keep track of one payment, instead of budgeting for multiple payments each month.

2. You could secure a lower interest rate

If you qualify for a refinancing offer, you could snag a lower interest rate on your student loans. SoFi has variable rates starting at 2.31% and fixed rates from 3.46%, for example. These are significantly lower than the 5.05% attached to direct loans or the 7.6% on PLUS loans.

Cutting your interest rate can go a long way toward saving you money on your debt. With less interest to keep up with, you might even be able to pay off your loan more quickly.

3. You’ll get to choose new repayment terms on your loan

Along with choosing a variable or fixed rate on your refinanced student loan, you can also pick new repayment terms. Most lenders offer terms from five years up to 15 or 20 years.

If you can swing higher monthly payments, you could choose a short term to get out of debt fast and save money on interest. If you need some relief, on the other hand, you could reduce your payments with a longer term but pay more interest throughout the life of the loan.

Note that you can always throw extra payments at your student loans without penalty. So even if you need to choose a longer term now, you can still prepay your loan if your income increases in the future.

3 cons of refinancing

Although saving money through refinancing might sound ideal, make sure you understand the potential disadvantages before applying.

1. You’ll lose access to federal programs and protections

Refinancing federal student loans with a private lender means you turn them into a private loan. And private loans are not eligible for federal protections or programs, such as PSLF.

If you’re relying on any federal options, it wouldn’t be a good idea to refinance. Similarly, you might not want to refinance if you’re concerned about your ability to repay the loan.

Private lenders don’t usually offer as much flexibility as the federal government does when it comes to repayment. For instance, they don’t have income-driven repayment plans, and only some lenders offer forbearance or deferment if you go back to school or run into economic hardship.

So before you refinance, find out which, if any, benefits your lender offers to borrowers. If you’re concerned, you might wait to refinance until you’re confident you have a steady income and the means to pay back your loan on time.

2. You need to pass a credit and income check to qualify

Unlike consolidation, not everyone will qualify for refinancing. Since you apply with a private lender, you’ll have to meet its underwriting requirements for credit and income. The criteria are in place to ensure you have the financial means to pay back any money you borrow.

3. You might have to apply with a cosigner

If you can’t qualify on your own or are trying to get the lowest rates possible, you could apply with a creditworthy cosigner, such as a parent. By signing onto the loan, your cosigner will share responsibility for your debt.

This might not be a problem if you and your cosigner are on the same page about sharing debt. But if you can’t pay back the loan, this agreement could ultimately do damage to your cosigner’s finances, not to mention your relationship with that person.

Before adding someone to your student loan, make sure to set clear expectations about who will pay back the loan and what will happen if you run into financial hardship. Also, find out if your lender offers cosigner release. Some will remove your cosigner from the loan after a few years of on-time repayments.

How to refinance your student loans with a private lender

Since there are lots of lenders that provide student loan refinancing, you’ll want to shop around to find one with the best offer. Along with finding the lowest interest rate, you might consider additional factors, like customer reviews or extra benefits, such as forbearance or cosigner release.

Banks, credit unions, and online lenders provide student loan refinancing. Some online lenders, such as SoFi, CommonBond and Earnest, make it easy to prequalify and check your rates from your computer or phone.

You’ll provide a few pieces of information, and these lenders will show if you prequalify. This check only takes a minute, and it won’t impact your credit score at all. Note, however, that when you choose a lender and submit a full application, you will need to consent to a “hard” credit inquiry, which can reduce your credit score slightly.

Once you’ve chosen a lender, you’ll submit basic information, such as your name, address, degree, university data, total loan debt and monthly housing payment. You’ll also provide proof of income and official statements for any private or federal student loans you wish to refinance.

As soon as you’re approved, you can choose your repayment term, as well as select a fixed or variable interest rate.

Make sure you keep paying off your old loans until you’re 100% certain your refinanced loan is up and running. You wouldn’t want to fall behind on payments before everything has been processed, so wait for your new lender to give you the green light before you forget about your old student loans.

Federal consolidation vs. refinancing: Which is the right choice for you?

Since both federal student loan consolidation and private student loan refinancing come with pros and cons, how do you decide which one is right for you? The decision comes down to your needs and goals as a borrower.

If you’re looking to simplify repayment or get out of default while at the same time retaining eligibility for federal repayment plans, consolidation would likely be the better choice. But if you’ve been paying your student loans for a few years and have a steady income, refinancing could be a wise strategy for saving money on your debt — and maybe even paying off your student loans ahead of schedule.

Take the time to understand your options so you can make the right choice with your student debt. By doing your due diligence, you’ll be able to find the strategy that best helps you manage your debt as you work toward paying it off in full.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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College Students and Recent Grads

CommonBond Student Loan Review: Pros and Cons

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

CommonBond Student Loan
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If you’re seeking a private student loan for your first or second degree, it’s hard to go wrong with CommonBond. The online lender’s interest rates, customer service and repayment flexibility beat many competitors — if you meet its sometimes restrictive eligibility criteria.

Of course, the operative question is whether CommonBond is the best provider for your loan. Let’s review the company to find out.

CommonBond student loans in a nutshell

CommonBond offers in-school financing for just about every type of borrower except for parents (although it does offer Parent PLUS refinancing if you want to lower your federal loan rates down the road).

Whether you’re an undergraduate, graduate, MBA student, dental student or medical student, you can check your potential interest rate without affecting your credit. In fact, you’ll just need to input your school name and degree type as well as your income (and your cosigner’s) and credit score before possible rates display.

Image credit: CommonBond – Individual results may vary

If you decide to proceed with a formal loan application — you can apply on any device — here’s what you can expect from CommonBond student loans:

  • No application, origination or prepayment fees (MBA, dental and medical loans carry a 2% origination fee)
  • Fixed and variable interest rates
  • Option to borrow from $2,000 to up to 100% of your school’s cost of attendance
  • Repayment terms of 5, 10 and 15 years available for undergraduates and terms of up to 20 years for dental and medical students
  • 4 in-school repayment options, including full deferment
  • 6-month grace period
  • A 0.25% discount for enrolling in autopay
  • Option to apply to pause your payments for up to 12 months of forbearance
  • Ability to release your cosigner after 2 years of timely payments

The highlights of CommonBond student loans

A competitive interest rate is a key feature when comparing lenders. CommonBond not only features relatively low fixed and variable rates, but it also provides discounted rates to borrowers who make automatic payments (0.25% reduction) and begin repayment while enrolled in school (discount varies). If you qualify for an 8.03% rate, for example, you might reduce it to 7.30%, saving you at least hundreds of dollars of interest in repayment.

Aside from attractive rates, here are other highlights of CommonBond loans:

Receive a free ‘Money Mentor’

If you and your cosigner want some assistance with the college financial aid process, you might welcome the free support provided by CommonBond. The online company pairs you with a Money Mentor — a trained college student who’s been there, done that and is ready to answer your questions over text.

“We make sure to empathize with students — going to and paying for college is a really stressful and emotional time,” Money Mentor CEO Kelly Peeler told Student Loan Hero. “Not only is it confusing figuring out how loans are, it’s also overwhelming doing that while trying to find housing, pick out classes and live with new people.”

If you have questions that are specific to CommonBond, the lender’s customer service team is also available over the phone and live chat on weekdays until 8 p.m. EST.

As for other unique perks of borrowing from CommonBond, MBA students could participate in CommonBond’s New York-based internship program and take part in the company’s summer workshop series.

Rest easy with repayment protections

Although it falls well short of federal student loan’s safeguards, CommonBond’s private loans come with a safety net. If your finances are in trouble after leaving school, you could request to postpone your monthly payments via forbearance. CommonBond awards up to 12 months of forbearance during your repayment.

In addition, dental students can defer repayment until after completing their residency, while medical students could limit their monthly payments to $100 during residency programs, including internships, fellowships and research.

Give back to other students

You might not feel great about borrowing student loans, but CommonBond delivers a silver lining. When a new customer takes out a loan, the lender funds the education of a child in a developing country, such as Ghana.

CommonBond claimed on its website to have raised over $1 million and built more than 470 schools through its work with the nonprofit Pencils of Promise.

The fine print of CommonBond student loans

CommonBond, which also refinances graduates’ student loans, is able to award decreased rates and increased perks, in part, because it’s more choosy than your average lender. It doesn’t lend to every student.

The strict eligibility criteria could leave you looking elsewhere, either because you’re ineligible or want to avoid a hassle.

Here’s what to keep in mind if you’re considering CommonBond:

A cosigner could be required

Many lenders request undergraduate student loans to bring a cosigner aboard because teens and 20-somethings usually have thin credit histories. A parent or someone else could help them qualify or receive a lower interest rate.

If you’re a creditworthy undergraduate or graduate student, however, you might bristle at the fact that CommonBond requires you to recruit a cosigner. For its part, CommonBond doesn’t require a cosigner if you’re an MBA, dental or medical school student, though.

If you don’t fall into one of these categories and want to try to qualify on your own, compare rates at lenders like Earnest that don’t require a cosigner.

There are other narrow eligibility requirements

Attaching a cosigner to your application (in the case of undergraduate and graduate students) isn’t the only hard-and-fast rule among CommonBond’s eligibility criteria.

The online-only lender cherry-picks its borrowers in other ways, too. Fortunately, if you don’t meet one or more of these criteria, you could probably find another, more accessible lender.

 CommonBond criteriaCompetitor to compare
Residency statusMust be a citizen or permanent residentProdigy Finance works with international students
Enrollment statusMust be currently enrolled at least half timeCollege Ave lends to part-time students
Credit scoreMust have a score of 660 and upCitizens Bank’s credit score requirement starts lower, at 620

Are CommonBond student loans right for you?

With competitive interest rates, responsive customer support and more repayment protections than your average private lender, CommonBond is worth considering for students of all levels. That doesn’t mean it serves all students equally.

Without cosigner requirements, MBA, dental and medical students seem to benefit most from CommonBond loans. Included are benefits like internship and career resources for MBA students and a residency deferment for dental and medical residents.

Of course, even if you have the cosigner or credit score to qualify, you might find a better student loan elsewhere. To set yourself up for a successful borrowing and repayment experience, compare CommonBond with other highly-rated private student loan companies listed on our site.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Andrew Pentis
Andrew Pentis |

Andrew Pentis is a writer at MagnifyMoney. You can email Andrew here

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College Students and Recent Grads

Top Checking Accounts for College Grads

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

For many college students, their default banking option while in school is a student checking account, which is typically free. Unfortunately, when you graduate you lose those benefits. Many student checking accounts will begin to charge you monthly maintenance fees unless you meet certain requirements.

So, where do you go from there?

Few young adults would turn to their parents for fashion or dating advice and, yet, one of the most common ways we’ve found young people choose their bank account is by going with whichever bank their parents already use. This could be a bigger faux pas than stealing your dad’s old pair of parachute pants.

The bank your parents use may carry fees or have requirements that don’t meet your lifestyle or budget, and make accounts expensive to use.

But where do you even begin to choose the right checking account?

When you’re nearing graduation, start planning your bank transition.

Many banks send a letter in the mail a few months prior to your expected graduation date informing you that your student checking account is going transition to a non-student account. If you’re not careful and you disregard the letter, you may be transitioned into an account that charges a fee if you don’t meet certain requirements.

You can always call the bank and ask to switch to a different account or you can choose a new account that offers more benefits, like interest and ATM fee refunds.

Account Name

Minimum Monthly Balance

Amount to Open

ATM Fee Refunds

APY

Simple$0$0None2.02% - 2.15% depending on balance
Aspiration Spend and Save Account$0$50Unlimited1.00% APY
Discover Bank$0$0NoneNone, but 1% cash back on up to $3,000 debit card purchases per month
Ally Bank$0$0Up to $10 per statement cycle 0.10% to 0.50% APY depending on balance
Consumers Credit Union (IL) Free Rewards Checking$0$0Unlimited ATM reimbursements5.09% on balances up to $10,000,
0.20% APY on balances between $10,000 and $25,000 and 0.10% APY on balances over $25,000
La Capitol Federal Credit Union Choice Plus Checking$0(if less than $1,000, there is a $8 fee)$50Up to $25 per month4.25% APY on balances up to $3,000 2.00% APY on balances $3,000-$10,000 and 0.10% on balances over $10,000
Boeing Employees Credit Union Member Advantage Checking$0$0Up to $6 per month4.07% APY on balances up to $500, 0.05% APY on balances over $500
TAB Bank Kasasa Cash Rewards Checking$0$0Up to $15 in ATM fees reimbursed4.00% APY (applies to balances up to $50,000)

The 5 key things you should look for in a checking account

When you’re shopping around for a new checking account, there are several things you should look for to ensure you’re getting the most value from your account:

  1. A $0 monthly fee: Sometimes banks may say they don’t charge a monthly fee but read the fine print — they may require a minimum monthly balance in order to avoid it. There are plenty of free checking accounts available for you to open, so there’s no reason to stay stuck with an account that charges a monthly fee. Take note, as some accounts may require you to meet certain criteria to maintain a free account like using a debit card, enrolling in eStatements or maintaining a minimum daily balance.
  2. No minimum daily balance: Accounts without minimum daily balances mean you can have a $0 balance at any given time. This may allow you to have a free account without meeting balance requirements — although other terms may apply to maintain a free account.
  3. Annual Percentage Yield: APY is the total amount of interest you will earn on balances in your account. Opening an account that earns you interest on your balance is an easy way to be rewarded for money that would typically sit without earning anything. You should definitely aim to earn a decent APY on your savings account.
  4. ATM fee refunds: You may not be able to access an in-network ATM at all times, so accounts providing ATM fee refunds can reimburse you for ATM fees you may incur while using out-of-network ATMs. Those $3 or $5 charges add up!
  5. No or low overdraft fees: Most banks charge you an overdraft fee of around $35 if you spend more money than you have available in your account. Therefore, it’s a good idea to choose an account that has no or low overdraft fees.

Top overall checking accounts for college grads

For the top overall checking accounts, we chose accounts that have no monthly service fees, no ATM fees, refunds for ATM fees from other banks, interest earned on your deposited balances and with strong mobile banking apps. While there is no all-inclusive account that contains every benefit, the accounts below are sure to provide value whether you want a high interest rate, unlimited ATM fee refunds or 24/7 live customer support.

1. Simple

Cash management app Simple acts as a hybrid checking and savings account with a generous APY and no fees. It features unlimited transfers between your checking account and Protected Goals account, as well as high APYs ranging from 2.02% on balances under $10,000 to a whopping 2.15% on balances over $10,000. Simple also provides fee-free access to 40,000 ATMs – although it doesn’t rebate ATM fees you might incur from machines outside its vast network. With built-in budgeting tools integrated into its app, Simple is a strong contender for the best checking account for college grads.

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on Simple’s secure website

2. Aspiration Spend and Save Account

The Aspiration Spend and Save Account offers a wide range of benefits for account holders and has few fees. The $50 amount to open is fairly low, and once you open your account there is no minimum monthly balance to maintain. Aspiration gives you up to five free ATM withdrawals per month.

As the account name suggests, there are two sides to the account: a spending sub-account and a savings sub-account. The spending side yields no interest, while the savings side earns 1.00% APY. To earn this APY, you must deposit at least $1,000 in the combined account monthly, or maintain a balance of $10,000.

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on Aspiration’s secure website

3. Discover Cashback Debit

Cracking our list for the best checking accounts for college graduates is Discover Bank, which takes a unique approach to checking account rewards. Instead of offering an APY on deposit balances, Discover opts for cash back as an incentive to get consumers to sign up for its checking product. The Discover Cashback Debit account offers up to 1% cash back on $3,000 of debit card transactions per month. That coupled with its zero fees and free access to 60,000 ATMs nationwide make it one of the best checking accounts for college graduates.

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Discover Bank's website is secure

Member FDIC

4. Ally Bank

Online bank Ally Bank offers a solid checking account with minimal fees, decent APYs and other attractive perks. Its Interest Checking account charges no monthly maintenance fees and provides free access to Allpoint ATMs nationwide, as well as a $10 reimbursement per statement cycle for any other ATMs fees incurred. Ally Bank’s APY isn’t too shabby, either: You can earn an APY of 0.50% with a $15,000 minimum balance. Other cool features include its Ally Skill for Amazon Alexa, which enables you to transfer money with just your voice.

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Member FDIC

Top high-yield checking accounts for college grads

Since most checking accounts offer little to no interest, high-yield checking accounts are a great way for you to maximize the money that typically would just sit in your account without earning interest. These accounts often offer interest rates that fluctuate depending on how much money you have in the account. However, in order to earn interest, there are some requirements that you may have to meet such as making a certain number of debit card transactions and enrolling in eStatements.

1. Consumers Credit Union (IL) Free Rewards Checking

The Consumers Credit Union (IL) Free Rewards Checking account is just that: Rewarding. It offers a tier-based APY, which includes a 5.09% APY on balances up to $10,000, 0.20% APY on balances between $10,000 and $25,000 and 0.10% APY on balances over $25,000. In order to earn the highest APY, you must complete at least 12 signature-based debit purchases, receive at least one direct deposit, ACH debit, or pay one bill through their free bill payment system, log into your online banking account and be signed up for eStatements and spend $1,000 or more with a Consumers Credit Union Visa credit card each month. This account has no fees and offers unlimited ATM reimbursements if requirements are met.

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on Consumers Credit Union (IL)’s secure website

NCUA Insured

2. La Capitol Federal Credit Union Choice Plus Checking

This checking account has a $2 monthly service fee, which can easily be waived if you enroll in eStatements.

While the terms state a minimum balance requirement of $1,000 and a low balance fee of $8, the fee can be waived if you make 15 or more posted non-ATM debit card transactions per month.

To earn the top interest rate on your checking balance, you just need to make at least 15 or more posted non-ATM debit card transactions per month. There are numerous surcharge-free La Capitol ATMs for you to use, and after signing up for eStatements you can receive up to $25 per month in ATM fee refunds when you use out-of-network ATMs.

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on La Capitol Federal Credit Union’s secure website

NCUA Insured

3. Boeing Employees Credit Union Member Advantage Checking

Contrary to its name, anyone can join the Boeing Employees Credit Union – however, to do so, you must join the Northwest Credit Union Foundation’s “Friends of the Foundation,” which has a $20 membership fee. That $20 fee could be well worth it, though, if you take advantage of the credit union’s Member Advantage Checking account. This account has a generous 4.07% APY on balances up to $500, as long as you open BECU Member Checking and Savings accounts, sign up to receive eStatements and make at least one transaction a month. There are no monthly service fees, and the Member Advantage Checking account offers $6 per month in ATM fee reimbursements.

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on BECU (Boeing Employees Credit Union)’s secure website

NCUA Insured

4. TAB Bank Kasasa Cash Rewards Checking Account

Based in Ogden, UT, TAB Bank’s Kasasa Cash Checking account is a great choice for recent graduates. You can earn a very competitive 4.00% APY by meeting a few simple requirements: Have at least one direct deposit, ACH payment, or bill pay transaction posted to the account during each billing cycle and make at least 15 debit card purchases of $5 or more. Even better, the bank will reimburse up to $15 in ATM fees per month from making withdrawals outside their ATM network.

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on TAB Bank’s secure website

Member FDIC

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James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here