Refinancing with Laurel Road
Refinancing rates from 1.89% APR. Checking your rates won’t affect your credit score.
For many student loan borrowers, refinancing is a strategic move for getting out of debt fast. It could lower your interest rate while simplifying your monthly payments.
But you might be wondering how to refinance student loans. What are the documents needed to refinance? And how long does the loan refinance process actually take?
Even if you’re undecided about refinancing, it’s easy to browse offers with no impact on your credit score. Here’s our step-by-step guide on how to refinance student loans.
4 steps to easily refinance student loans
If you follow these four steps, you could have a refinanced student loan in just two to three weeks.
To easily refinance student loans, you should first window-shop. You don’t have to commit to one lender or offer. In fact, you can browse multiple offers without any risk to your credit score, and you’re under no obligation to choose one unless it would benefit you.
There are a variety of banks, online lenders and credit unions that refinance student loans. And you can enter your information and check rates in just a couple of minutes. Lenders such as SoFi, CommonBond and LendKey offer competitive interest rates, transparent practices and good customer service.
Compare refinancing lenders to see which would be best for you. Then check your rate by visiting the lender’s website and entering some basic information. Most lenders ask for the following:
- Degree and university
- Total student loan debt
- Monthly housing payment
Different lenders might have slightly different requirements, but the gist will be the same. You could also be prompted to create an account so you can revisit your information later.
After entering this data, the lender will instantly run a soft credit check. Again, this check won’t impact your credit score.
If your income and credit score meets the lender’s eligibility requirements, you’ll see a range of offers. Most lenders offer loans with five-, seven-, 10-, 15- and 20-year repayment terms.
You’ll also see variable and fixed interest rates. Variable rates can fluctuate with the market, while fixed rates stay the same over the life of your loan. Variable rates tend to start lower than fixed rates, but they could increase over time.
Generally, it’s only wise to choose a variable rate if you can pay off your loan fast. If you have a longer repayment term, going with a variable rate carries more risk.
If you land some good offers, it’s time to choose a lender and a loan. Most borrowers go with the lender that offers them the lowest interest rate. Do the math with a student loan refinancing calculator to estimate how much you’ll save with a new interest rate.
You can also compare loan terms to help you choose a five-year, 10-year or longer repayment term. A longer term can help lower your monthly payments, but it could also mean more accrued interest over the life of your loan.
If you need to free up more of your monthly income, a longer term could be the way to go. But if you can manage higher payments, a shorter term will save you money on interest and help you get out of debt fast.
Besides interest rates, repayment protections might also factor into your choice. If your job is on shaky terms, for example, you might prioritize lenders with unemployment protection or economic hardship forbearance programs.
Finally, customer service could sway your decision. Online reviews offer good insight into how well a company treats its customers. If that’s an important element to you, do your homework before selecting your lender. You might start by testing its customer service’s responsiveness online over the phone, or by reading customer reviews written by other customers.
Before locking in your new interest rate, you need to submit a full application. You’ll upload documents, such as loan statements and proof of income. Plus, you’ll consent to a hard credit check at this point.
Here are the main documents and information that most lenders require:
- Proof of citizenship (Social Security number or government ID number)
- Valid ID number (driver’s license or passport)
- Proof of income (pay stubs or a job offer letter)
- Official statements for all your federal and private loans
If you’re applying with a cosigner, you’ll also provide that person’s information. You’ll upload any supporting documentation to your online account with the lender.
If anything is missing, the lender will notify you. You can also call or chat with customer service if you have any questions.
Feel free to call your current loan servicers if you’re not sure where to locate full statements. Statements need to show your original balance, date of disbursement and full history of repayment.
Even though you can browse initial offers in an instant, you may have to wait a few weeks for full approval of a refinancing application. The process usually takes two to three weeks to complete.
In the meantime, it’s very important that you don’t stop paying your current loans. Only stop paying your current servicers when you get the green light from your new lender.
Once you’re approved, set up automatic withdrawals from your bank account so you don’t miss a payment. Many lenders offer an additional 0.25% discount on your interest rate when you set up autopay. You might qualify for an additional loyalty discount if you refinance with a bank where you already have a bank account.
Even though refinancing student loans can be quite easy, 76% of Millennials have not looked into this option. Furthermore, nationally only 30% of borrowers pay off their loans in less than 10 years. While some metro areas are even worse, with only 23% finishing in in under 10 years. A Student Loan Hero study shows that as student debt lingers, other financial goals are inevitably put off or never reached. Plus, as the debt stretches longer, there is an increase in late payments and penalties, which lead to even more interest to pay. With the steps above, refinancing can help avoid these issues.
- 46% of borrowers in Provo paid off their loans in 10 years, the highest rate in the study by far.
- Chattanooga, Tenn, came in second. The data shows 38% of borrowers pay their student loans off in 10 years, roughly 8 percentage points higher than the study average.
- Allentown, Pa. took third, coming in right behind Chattanooga at 36.9%.
- Provo was not the only Utah city scoring well in this study. Salt Lake City (35.4%, 4th) and Ogden (31.2%, 27th) secured spots in the top 30 with higher than average scores. Students in Utah are probably able to pay off their student loans early in Utah thanks to low costs of living, a strong economy and affordable colleges. Utah has some of the lowest public school costs in the nation and BYU subsidizes costs for Mormons who make up the vast majority of the school’s population.
- It was not only affordable metro areas at the top though. Our data shows that people in high cost of living areas like San Francisco (34.4%, 7th) and San Jose (9th, 34.3%) were often able to pay their loans off in a reasonable time frame. Both these cities have booming economies, making tackling the high cost of living possible and state school in California are both some of the best in the nation and affordable.
- At the bottom of the rankings are a mix of southern cities (New Orleans, Palm Bay, Columbia, S.C.) and rust belt cities (Dayton, Buffalo). Overall while these cities are not the most expensive to live in, limited earning opportunities may be hurting borrowers abilities to pay off loans.
Refinancing is a strategic way to get rid of student loan debt
Now that you know you can easily refinance student loans, it will only take a few minutes to check your rates and compare lenders.
If you find a good offer, you can submit a full application. Once you’re approved, you can say goodbye to your old loan servicers.
Plus, your new interest rate could save you lots of money over the life of your loans. As long as you’ve thought through all the pros and cons of refinancing, it can be a smart way to get out of student debt faster.
Andrew Pentis 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.