Refinancing with Laurel Road
Refinancing rates from 1.89% APR. Checking your rates won’t affect your credit score.
New Year’s is a time to reflect on ways to make the coming year better, and if you’re like the 45 million Americans with student loans, paying off some or all of that debt is a good place to start.
Here are five student-loan-fighting tasks you can resolve to do, whether it’s New Year’s or the middle of June. Take a look to see if some of these are right for your financial New Year’s resolutions.
1. Do some math with your student loan debt
2. Understand your student loan repayment options
3. Set up automatic payments
4. Find extra money to pay off your loans
5. Consider refinancing your student loans
It’s easy to go coasting along without any thought or strategy for overcoming college or trade school debt. Paying off student loans seems easy: The bill comes and you pay it. But do you have any idea how much it’ll cost you to pay off your loans this way? The answer can sometimes be surprising.
If you’re not sure about the cost of your student debt, then now’s the time to find out. First, plug in the information into this monthly payment calculator. The result will estimate how much you’ll end up paying in interest with your current loan term (usually 10 years for federal student loans — if you don’t know your term, here’s how to find out). If you have a variety of loans, you can run the numbers for each of them.
Now try experimenting with this prepayment calculator to see how paying just a little extra each month can sometimes drastically reduce the cost of your loans over time.
It’s possible that the standard repayment plan with payments for 10 years isn’t your best option for paying off your loans. You might have better options, depending on your circumstances.
For example, if your payments are currently too high, you could take advantage of repayment plans that let you pay less each month. You can read up on income-driven plans, which cap your monthly payments at a (hopefully) affordable portion of your income.
That said, income-driven plans also run far longer than the standard 10 years, resulting in more interest (though usually, the remaining balance is forgiven after 20 to 25 years). If that’s a concern, you could consider a graduated repayment plan, which starts with small payments that ramp up over time to get you out of debt more quickly.
Note that these options are only for federal student loans. If you have private loans or if you’re interested in getting out of debt as fast as you can, you might be better off refinancing (see below).
Also, don’t forget to look into student loan forgiveness options, especially if you work in the public sector — but even if you don’t.
Automating payments can help in two ways: ensuring that your payments are on time and slightly reducing your interest rates.
With student loans, there’s no good reason to pay late or skip a payment. These options will only hurt you later, when your loans end up defaulting or in collections, meaning that you’ll pay extra in collection fees.
Automating payments also help you to avoid missing payments, which can hurt your credit score. Plus, you’ll save the time it takes to mail a check or submit an electronic payment manually each month.
In many cases, you can cut your interest rate by 0.25% simply by signing up for automatic payments — even many private student loan lenders offer some form of autopay discount. Though the reduction might not result in massive savings, it will save you some money.
Just make sure that you’re able to keep enough for your payment in your bank account so that you don’t have an overdraft. If that’s a concern, then refer to the section above on repayment options, since you might benefit from reduction in you monthly bills.
The most obvious way to find extra money you can throw at your loans is to pick up a side hustle. There are some gigs that cost nothing to start or which you can do from the comfort of your home or via your phone.
But if you’re short on free time, there are other places to look for money. One possible source of cash is your income tax refund, if you have one. Often, it’s a big chunk of change that could put a dent in your student loans.
Another option is to review any bills that you pay monthly — for example, auto insurance. The beginning of a new year is a good reminder to compare rates for this and other services. If you can shave some money from your monthly premium by switching providers, then you can put that difference toward your student loan payments.
What about subscriptions that you don’t use? Maybe you have streaming services and other entertainment, or maybe a gym membership you don’t use anymore. Drop these services and use the extra money to pay off your loans.
One final option to consider whether to refinance your student loans at a lower interest rate.
Refinancing can be especially helpful if the rates you’re paying now are high. Start by comparing your current rates with the refinance rates at some of our favorite lenders to see how much you could save, assuming you (or a cosigner) have a solid enough credit history.
There are some downsides to consider, however. If you refinance federal student loans, they become private loans, so you’ll no longer qualify for income-driven repayment, some types of loan forgiveness and other perks.
Still, you might not need any of those federal benefits — and if you have private loans already, then you’re not eligible for them anyway. If you’re not sure whether refinancing is viable for you, read our report on the pros and cons of this approach.
Jeffrey Trull contributed to this report.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.99% – 5.64%1||Undergrad & Graduate|
|1.89% – 5.90%2||Undergrad & Graduate|
|2.25% – 6.28%3||Undergrad & Graduate|
|1.89% – 6.77%4||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|1.99% – 5.41%5||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews! |
1 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 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% 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 July 31, 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 7/31/2020. 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.
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 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 September 10, 2020.
5 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.16% effective August 10, 2020.