Refinancing with Laurel Road
Refinancing rates from 1.89% APR. Checking your rates won’t affect your credit score.
You’re stuck with student loan debt and want to pay it off, but you’re not really sure where to start. You’ve heard of different repayment options and strategies, but they all seem overwhelming.
You’ve come to the right place. By following this guide, you can take easy, actionable steps toward launching your loan repayment and paying off your debt. Even if you don’t do everything on this list, tackling at least some of these tasks should help move the ball forward on your student debt.
Step 1: Add up your debt
Step 2: Review your interest rates
Step 3: Calculate your daily interest
Step 4: Choose a repayment method
Step 5: Sign up for autopay
Step 6: Evaluate all of your expenses
Step 7: Have a no-spending day each week
Step 8: Create a meal plan
Step 9: Sell your old stuff
Step 10: Pick up a side hustle
Step 11: Check your credit score and credit report
Step 12: Consider refinancing
Step 13: Make an extra payment
Many of us graduate without an accurate picture of how much student loan debt we actually have. Between various loans and different interest rates, the total damage may not be as clear as it should.
To conquer your student loan debt once and for all, it’s crucial to know exactly what you owe — right down to the penny.
To get started, log in to your loan servicer’s website and, one by one, add up the amounts that you owe on all of your loans in an Excel spreadsheet or on a piece of paper.
If you’re not sure who your loan servicer is or which private lender you owe money to, then check out our guide on how to track down all your student loans.
Once you know the amount your total debt and identify your loan servicer, it’s time to review your interest rates. Your interest rates could vary widely depending on the types of loan you have. Federal and private loan interest rates differ, and some might be variable-rate loans while others are fixed-rate.
Understanding your interest rates is important not only for knowing what you’re being charged for the loans, but also for devising a smart plan for repayment. You can learn what your interest rates are from the information provided by your loan servicer. As a final step, write down the interest rate for each loan next to its outstanding balance.
Once you have all of the interest rates written next to the outstanding balances on your loans, it’s time to calculate your daily interest. First, find out what the average weighted interest rate is for all your loans, using this interest calculator. Next, take the weighted rate and plug it into the following formula:
(Weighted interest rate) × (Current principal balance) ÷ (Number of days in the year) = Daily interest
For example, let’s say that you have $50,000 in debt at a 7% interest rate:
(0.07) × ($50,000) ÷ (365) = $9.58
That means that you have to pay $9.58 per day in interest. Calculating your daily interest is a painful but necessary step, for it puts into focus how much you have to pay in interest each day. That amount should help motivate you to pay off your debt.
If you’re struggling to keep up with your student loan payments, then it might be worth looking into an income-driven repayment plan (at least for your federal loans — private loans aren’t eligible for this).
But if you’re able to keep pace with repayment and want to use a little extra from your income to speed things up, then there are a couple of methods available for tackling your debt. For one, you can use the debt snowball method, which involves paying off the loan with the smallest balance first and the minimum amounts due on the rest of your loans.
Or, there’s the debt avalanche method, which involves paying off the loan with the highest interest first and the minimum amounts due on the rest.
Though the debt snowball method can be more motivating, the debt avalanche method is usually more cost-effective, since you pay off the most expensive loan first. In any case, choose the method that feels right for you.
One major drain on your mental energy as you repay your student loans is simply remembering to make the payments on each one on time. So, instead of relying on your memory or setting up calendar reminders, sign up for autopay.
As the name implies, autopay automatically withdraws payment from your checking account and typically comes with a 0.25% interest rate discount. If you’re worried about overdrafts, then make it a daily habit to check your account balances. Enrolling in autopay can make student loan repayment easier as well as save you money.
Because you want to pay off your student loans, you need to evaluate all of your expenses and identify areas where you can cut back. Start by listing all of your expenses, including rent, food, insurance, transportation and entertainment.
Look at the list for areas where you can reduce spending. For instance, if you have a gym membership that you never use, then cancel it and put that money toward your debt. If you’re paying for an unnecessary cable package or an elaborate phone plan, then call your internet and phone provider to negotiate a lower payment. Companies want to keep you as a customer, so it doesn’t hurt to ask.
Though spending money can seem like a natural, necessary part of our lives, it’s smart to occasionally have a “no-spending day” when you don’t use any money at all. Once a week, give your finances a break and keep your wallet shut. Instead, estimate what you might have spent and put that extra money toward your debt.
When you’re trying to pay off student loan debt, food expenses can really take a big bite out of your budget. It’s also easy to justify food expenses because we have to eat.
But instead of spending all of your extra money on eating out, create a meal plan. A meal plan is like a budget for food — you plan ahead what you will eat and what ingredients you will need.
Meal plans can save you money because you stick to buying what’s on the list and what’s part of your plan, instead of randomly splurging on Goldfish crackers or peanut butter cups.
If you’ve got stacks of old CDs, books and clothes that are just collecting dust, then it’s time to get rid of them and make some money. You can take your old things to local stores and resell them for cash.
For old items that these stores don’t buy, consider selling them on Craigslist, eBay or even at a garage sale. Then, put all of the money you make toward your student loan debt.
When you want to pay off student loan debt, cutting back on spending is only one part of the equation. The other part is earning more income from a job on the side, which can often be fun and give you added experience.
When you’re paying off student loans, you want to make sure that you maintain good financial health. One way to check your financial condition is to review your credit score and credit report. Your credit can determine whether you get approved for an apartment, student loan refinancing, a car loan and much more.
One excellent way to save money on paying back your loans is through student loan refinancing. Refinancing allows you to consolidate your debt into one monthly payment and possibly get approved for a better interest rate.
With student loan refinancing, you may be able to save money in interest. Check out these options for student loan refinancing and review their eligibility requirements to see if any of them are right for you. Note, however, that refinancing federal student loans has some drawbacks, so make sure to consider both the pros and cons before acting.
Though you enrolled in autopay for your minimum monthly payments, that doesn’t mean that you can’t make extra payments. With extra payments, you can cut down on your overall interest charges and start chipping away at your principal balance even faster. An extra $25 or $50 payment here and there will add up over time.
And if finding the spare funds to pay extra seems to be a heavy lift, consider using the biweekly payment method. This involves paying half your monthly student loan bill every two weeks, so that you end up each year with an extra month’s worth of payment automatically.
By using this 13-step guide, you can make clear, steady progress toward achieving your student loan debt repayment goals and conquering your student loans by taking manageable steps.
Michael Kitchen contributed to this report.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.89% – 6.66%1||Undergrad & Graduate|
|1.89% – 5.90%2||Undergrad & Graduate|
|2.25% – 6.09%3||Undergrad & Graduate|
|1.99% – 5.34%4||Undergrad & Graduate|
|1.97% – 8.54%5||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|Check out the testimonials and our in-depth reviews! |
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of October 1, 2020.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of September 9, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.49% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.34% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of October 26, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 10/26/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
5 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 11/13/2020 student loan refinancing rates range from 1.97% to 8.54% Variable APR with AutoPay and 2.95% to 8.77% Fixed APR with AutoPay.