Best Banks To Refinance Your Student Loans
Paying off student loans can be incredibly challenging, but luckily today recent graduates have many options when it comes to lowering interest rates and finding more agreeable terms. These days, many traditional banks offer good financing options at reasonable interest rates.
Can you refinance a student loan? In this article, we will explore some of the top banks that refinance student loans and provide some sound advice that will help you apply successfully.
Why Refinance Your Student Loans?
If you are having trouble keeping up with multiple student loans and/or your payments are just too high, consolidating several student loans into one can be very helpful in terms of streamlining your payment process and reducing your interest rates.
Even if you are currently handling your student loan obligations well, consolidation may prove to be a valuable tool for simplifying your life and getting the most value for your dollar.
What Do You Need to Apply for Student Loan Refinance?
As with any other type of loan application, there are certain documents you will need to have ready. Get your loan application package together well in advance.
Here's what you'll need:
- Proof of Income
- Proof of Employment
- Proof of Your Credit Worthiness
- Documentation of All Your Current Loans
All lenders want to know that you are gainfully employed, make enough money to be able to make your payments and can be trusted to do so. If this does not describe you, you may want to look into other options for managing your student loan debt.
If you have federal loans, you may have some more attractive and workable choices available. For example, you may be able to apply for a no-fee, Direct Consolidation Loan.
This type of loan allows you to determine payments via an Income Driven Plan. This means that the amount of your payments will be based on your available budget or your income.
When you use this option, you do not run the risk of losing the flexibility that is built-into federal loans.
How To Choose A Good Lender For Student Loan Consolidation
If you have private student loans or combination of federal and private student loans, you may do well to look for a bank to consolidate student loans and gain a lower interest rate and more workable terms.
When seeking good financing, there are a couple of questions you should ask:
1. Does the lender charge an origination fee? If you're planning on taking out a short-term loan, you won't want to pay an origination fee. With a long-term loan, a fee may be justifiable and can be spread out over the term of loan.
2. Does the consolidation loan come with a fixed or variable interest rate? If interest rates are very low now, you should strive to get a loan that has a fixed rate can lock in.
What Are The Best Banks Offering Student Loan Consolidation?
Here’s a collection of our top picks:
Earnest is unusual in that that it offers flexibility in borrowing. Variable interest rates begin at 2.61% APR, and fixed interest rates begin at 3.35% with autopay.
One perk you can enjoy with Earnest is the ability to change from a fixed to a variable interest rate during the life of your loan.
You will have the opportunity to do this twice annually until the balance of your loan has been paid off. This allows you to get the best of both worlds when interest rates change.
Requirements to be approved for this loan include gainful employment, a sensible budget, a one-month emergency fund set aside, a positive bank balance and a good payment record.
SoFi offers student loan consolidation to graduates of specific Title IV accredited universities and colleges. Variable interest rates start at 1.9%, and fixed interest rates start at 3.5%.
Applicants are required to be employed or have a firm job offer that will commence within three months of the application date.
Additionally, applicants must demonstrate a strong ability to repay.
CommonBond student loan consolidation is available for students who have graduate or undergraduate degrees.
Variable interest rates start at 1.94% and fixed interest rates start at 3.74%. Applicants must have graduated, be employed and have a reliable income and solid repayment history.
Darien Rowayton Bank (DRB)
Darien Rowayton Bank (DRB) offers student loan refinancing at 1.9% to 4.5% fixed interest or 3.5% to 6.25% variable interest.
If you enroll in automatic payments, your interest rate will drop by .25%.
Citizens One Bank
Citizens One Bank offers its best deals in student loan consolidation (fixed rates at 2.75% to 4.95%) to graduates with a minimum of a bachelor's degree.
To apply successfully, you must have a gross annual income of at least $24,000, along with good credit history. You must also have made your last three payments on your current student loan in a timely manner.
If you do not yet have your degree, you will need to have at least a years' worth of continuous timely payment history on your current loan.
Wells Fargo Bank is a traditional lender offering student consolidation loans with variable rates beginning at 3.49%. Fixed rate loans start at 6.74%.
Successful applicants have a good credit score and a reasonable debt-to-credit ratio.
LendKey offers student loan consolidation to graduates who have an income of a minimum of $2000 monthly and a good credit history.
Both variable and fixed rate loans are available with interest rates ranging from 1.9% to 6.93%.
It's important to understand that LendKey is not a bank. Instead, it is a service that will match you with an appropriate bank or credit union.
IHelp is another service that will assist you in finding a community bank to provide for your loan consolidation needs.
To qualify for their assistance, you must have a continuous two-year, good history of credit; unacceptable debt to income ratio (45% or less) and a minimum gross annual income of $24,000.
Loans are fixed rate starting at 6.22%.
The Possibilities For Successful Student Loan Consolidation Are Vast
Student loan debt has become a big problem in our society, so naturally quite a bit of business has sprung up in response. This is good for you because it gives you lots of options when shopping for the best deal.
In addition to banks, student loan refinance companies and credit unions may offer good solutions.
If your student loan debt is dragging you down, follow the advice presented here to seek out the best student loan consolidation plan for you.