LendKey Student Loans Review: Choice of Multiple Refinancing, New Loan Offers

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LendKey Student Loans Review
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Pros of LendKey student loans: Cons of LendKey student loans:
  • Competitive interest rates
  • No application, origination or prepayment fees
  • Potentially receive multiple loan offers from lesser-known lenders
  • Generous cosigner release, forbearance policies sometimes available
  • Eligibility requirements exclude many applicants
  • Parents not able to borrow or refinance
  • Exact rates, terms of loans vary by LendKey partner
  • New loans are available nationally, but refinancing not possible in Maine, Nevada, North Dakota, Rhode Island, West Virginia

Since its founding in 2009, LendKey has distinguished itself by connecting student loan borrowers with lesser-known nonprofit credit unions and banks. The digital marketplace claimed to have helped fund $3.1 billion in loans for 99,000-plus borrowers — it also services more than $2 billion worth of student loans.

Believing that its partners provide low interest rates and good customer service, LendKey is worth considering if you want to refinance student loans or borrow new loans for school. Despite it being a platform all its own, however, you’ll still want to shop around and compare terms elsewhere.

LendKey student loans refinancing review LendKey private loans review

LendKey student loan refinancing review

LendKey isn’t a one-stop shop for student loan refinancing, as it only delivers interest rate offers from its partner credit unions and banks. Still, if you’re keen to refinance, competitive rates and a seamless application process make it a good “lender” to compare against others as you shop around.

LendKey student loan refinancing is a good fit for degree-holding borrowers who prefer working with a smaller financial institution or are just canvassing for your best possible terms. It may be especially appealing to applicants seeking friendly cosigner release and forbearance policies.

What to like: What to keep in mind:

LendKey student loan refinancing review: The basics

Local financial institutions don’t have the same name recognition as big bank student loan consolidation companies, so LendKey helps you nab offers you might otherwise never learn about.

Small brick-and-mortar entities typically have geographic or other requirements, so LendKey reviews your information and only shows you offers from banks and credit unions for which you’re eligible. For instance, if you’re affiliated with the military, LendKey might show you Navy Federal Credit Union refinancing offers. If you then see an offer you like at Navy FCU, you can use the LendKey student loan refinancing platform to choose an offer and submit a full application.

LendKey’s refinancing partners offer variable APRs starting at 1.90% – 5.25% and fixed APRs from 2.95% – 7.63%. The amoun t you can refinance varies by state, and typically you can choose repayment terms of five, seven, 10, 15 and 20 years .

Note that even if you choose a longer repayment term than what you currently have on your loans, you can always pay off your student loan ahead of schedule without penalty.

Other characteristics of LendKey student loans on the refinancing side include:

  • Prequalifying without affecting your credit
  • Option to apply with a cosigner
  • 0.25 percentage-point discount on your interest rate for enrolling in autopay
  • No application or origination fees
  • Refinancing as little as $5,000* and as much as $125,000 (for undergraduates), $175,000 (graduate degree) or $300,000 (medical degrees)

*Borrowers in Arizona ($10,001), Connecticut ($15,001) and Massachusetts ($6,000) must hit different borrowing minimums.

With that said, LendKey student loan refinancing isn’t accessible for everyone. Keep these limitations in mind:

  • Associate degree or higher — and U.S. citizenship or permanent residency — is required for refinancing
  • 680 credit score, $24,000 annual income needed to apply
  • Cosigner release and forbearance policies vary by LendKey partner
  • Parent borrowers are ineligible for refinancing

What to like about LendKey student loan refinancing

The LendKey refinancing platform makes the loan-shopping process easy. Here are two features that make LendKey especially useful for student loan borrowers looking to refinance:

Review competitive interest rates without a hard credit check

LendKey promises that its community bank and credit union partners offer low interest rates, and it delivers on this promise. In fact, you may be quoted rates within as little as 10 to 15 minutes. You just need to enter information about yourself, your income, school and loan amount to get started — and your credit won’t be dinged for browsing.

These interest rates are generally competitive with what big banks and online lenders have to offer, though of course, you must have a strong credit score (680 or above) and income (at least $24,000) to qualify for the lowest rates (or apply with a cosigner who does).

But if you can qualify, you could lower your student loan interest rate considerably and save money over the life of your student loan.

Be aware that if you like your LendKey quote and decide to file a formal application, your credit will be subject to a hard check at that point. It’s wise to limit your number of hard checks to the lender you ultimately choose.

Receive loans offers you might not find otherwise

Community banks and credit unions don’t often have the same reach or budget for marketing as do big banks and national online lenders. As a result, you might never hear about local or small-scale institutions that could provide you with low rates and personalized customer service.

Thanks to LendKey, though, you’ll get a chance to connect with these community lenders. Of course, checking your rates doesn’t require any commitment to refinancing with any of them. But you’ll get to see offers, so you can decide if any are right for you.

What to keep in mind about LendKey student loan refinancing

Although LendKey is a great resource for student loan borrowers, there are some potential drawbacks. Consider these downsides so that you don’t miss out on your best refinancing offers and lender benefits currently available:

Eligibility criteria excludes non-graduates, parents and nonpermanent residents

Even if LendKey reviews make the company sound like your ideal fit, the feeling may not be mutual. Compared with some student loan refinancing companies, LendKey has strict underwriting criteria.

You’ll find yourself ineligible in the following scenarios:

Reason for denial Alternative lender
You didn’t graduate from school EdVestinU works with non-graduates
You’re not a citizen or permanent resident (green card holder) Prodigy Finance has looser residency requirements
You’re a parent who previously borrowed on behalf of your child Education Loan Finance offers parent loan refinancing
You (or your cosigner) don’t have a 680 credit score Earnest sets its threshold at 650
You (or your cosigner) don’t have annual income of $24,000 SoFi doesn’t set a minimum income requirement

For its part, LendKey allows current students to refinance education debt once they’ve earned at least an associate degree. So, if you’re battling high interest rates while pursuing a second degree, refinancing with LendKey could provide relief.

Unfortunately, families looking to refinance their loans may be disappointed by their options. LendKey’s partners don’t make refinancing possible for parents or partners.

Consider other lenders for:

Platform is limited to LendKey’s partner lenders

LendKey enables the country’s 13,000-plus community financial institutions to bring you student loan refinancing offers. But this number gets cut down considerably based on each lender’s eligibility requirements.

Plus, you won’t see offers from other banks (such as Citizens Bank) or online lenders (such as Splash Financial), which could have better terms. If your goal is to find your lowest interest rate, it’s a good idea to shop around with a variety of lenders, including national banks and online lenders.

Although the LendKey student loan refinancing platform could be part of your search, it’s a good idea to look elsewhere, too, so you don’t miss out on other deals.

Necessary to research the lender’s specific terms

Although LendKey matches you with lenders, it doesn’t necessarily give you all the information about each lender. Before selecting an offer, take time to find out about the lender’s requirements, terms and conditions.

You won’t know the lender’s specific policy for cosigner release or forbearance, for example.

  • Some LendKey partners offer you the ability to remove the cosigner from your loan agreement within 12 months. Other partners might make you wait for 36 months.
  • The platform advertises 18 months of jobs loss protection in the event your income falls and you struggle to make loan payments. Still, it’d be smart to confirm that your specific lender within the LendKey family fulfills that promise.

Check out customer reviews and see if the lender offers more benefits, such as the option to skip a payment if you run into financial hardship.

LendKey facilitates your application with a lender, but ultimately, your loan will come from the bank or credit union itself. So make sure you’ve gotten answers to all your questions before finalizing any paperwork.

How LendKey student loan refinancing compares with competitors

If you only apply for student loans refinancing with LendKey, you won’t have the full picture of your options. Student Loan Hero recommends checking rates and terms with at least two other, off-platform lenders to compare rates and terms.

Here’s how LendKey reviews compares with College Ave and CommonBond.

LendKey College Ave CommonBond
Products
  • Student loan refinancing
  • Student loan refinancing
  • Parent PLUS Loan refinancing
  • Student loan refinancing
Eligibility requirements
  • 680 credit score
  • $24,000 income
  • Citizenship or permanent residency
  • College degree
  • 680 credit score
  • $65,000 income
  • Citizenship or permanent residency
  • College degree
  • 660 credit score
  • No minimum income requirement
  • Citizenship, permanent residency or eligible visa-holder
  • College degree from lender network
APRs Variable starting at 1.90% and fixed starting at 2.95% Variable starting at 2.94% and fixed starting at 2.99% Variable starting at 2.50%and fixed starting at 2.83%
Minimum loan amount $5,000 $5,000 valign=”top”$5,000
Repayment terms available Up to 20 years 15 years Up to 20 years
Apply with a cosigner Yes Yes Yes

Is LendKey student loan refinancing right for you?

LendKey offers an alternative to big banks by bringing credit unions and local banks into the forefront of the student loan refinancing market. Because there’s no commitment, there’s no reason not to check with LendKey and see what offers you get.

Keep in mind that no offers are final until LendKey reviews your credit via a hard check on your account. Assuming your credit score (or your cosigner’s) is strong enough, you should have no trouble getting a refinanced loan. Since LendKey is not the actual lender, read the fine print of any agreement before signing.

You should also note that refinancing student loans has some downsides. If you’re refinancing federal loans, you’ll lose some federal programs and protections. For instance, you’ll no longer be eligible for federal income-driven repayment plans or forgiveness programs.

Before turning your federal student loans into a private refinancing loan, make sure you understand what doors you’ll be closing. And check with your new lender to see if it offers any protection in the event of financial hardship.

If refinancing is the right option for you, LendKey could help you find an offer with competitive terms. As a result, you could consolidate student loans into one, possibly lower your interest rates and maybe even save a nice chunk of money on your student loan repayment.

LendKey private student loans review

When you shop around for a private student loan, you might apply with multiple banks and credit unions to compare offers. But when you look into LendKey student loans, this process is already baked into the cake.

On its platform, LendKey promises to connect you with hundreds of community banks and credit unions simultaneously. You can access lenders you might have otherwise overlooked and, hopefully, compare multiple loan offers in one place.

LendKey student loans are a good fit for creditworthy, full-time students who are shopping for private loans that include cosigner release and forbearance features. It’s less ideal when LendKey doesn’t deliver multiple offers, however, and merely connects you with a lender that you could find on your own.

What to like: What to keep in mind:

Because LendKey would be your servicer, not your lender, the terms of your loan would depend on your lending bank or credit union. With that said, here are the basics of LendKey student loans:

  • Option to apply with a cosigner
  • Borrow up to 100% of your cost of attendance (though it’s recommended to rely on federal student financial aid first, plus some LendKey partners have unique minimum and maximum borrowing requirements)
  • Fixed and variate interest rates available
  • No application or origination fees
  • No prepayment penalties
  • 6-month grace period (after you leave school) before principal-and-interest payments come due
  • Autopay rate discount of 0.25 percentage points
  • Up to 18 months of forbearance*
  • Cosigner release offered after 12 to 36 prompt monthly payments*

*Depending on the LendKey partner lender

To be eligible at LendKey, you have to be a U.S. citizen or permanent resident attending an eligible school. You (or your cosigner) must also meet the lender’s credit and income requirements to qualify for a loan.

Here’s some specific fine print on LendKey student loans:

  • You’re required to apply with a cosigner when your income is below $24,000 or you have less than 3 years of credit history
  • You must make interest-only or fixed $25 payments while enrolled in school and during the grace period
  • Only a 10-year repayment term may be available

What to like about LendKey student loans

Image: LendKey

Given that LendKey is more of a marketplace than a lender, you might not be surprised to learn that its application process generally takes less than 15 minutes and is relatively easy to follow.

When applying, you’ll be asked for information about your school, major and citizenship status. You’ll also have to give your Social Security number and total annual income, and you must agree to undergo a credit check. After that, you’ll receive a loan offer.

Here are a few factors that could make that offer more attractive in your eyes:

Good grades could lower your rate

You might wonder why LendKey reviews your grade point average (GPA) or asks you to send over your latest transcripts. This is because the company uses the information to assess your reliability.

Your GPA, course of study and class-standing information — right alongside your (or your cosigner’s) credit history — is plugged into LendKey’s proprietary credit scoring model. This is referred to this as your Academic Credit Score, and the better it is, the better chance you have to score lower interest rates.

A lower rate could mean significant savings. Say you qualify for a 6.00% interest rate and intend to borrow $10,000 for your next year of school. Repaying your five-figure debt over a 10-year term would cost you $3,322 in interest, according to our monthly payment calculator.

Now say your Academic Credit Score dragged down your loan application, so you only qualified for a 9.00% rate. Repaying that $10,000 over the same term would include $5,201 of interest.

Release your cosigner in 1 to 3 years

Most undergraduate student loans offered by private lenders require or strongly encourage you to apply with a cosigner. As a teen or 20-something, you likely don’t have the income or credit history to apply on your own anyway.

At LendKey, you’ll need to attach this guarantor to your loan application if you earn less than $24,000 per year or have fewer than 36 months of credit history.

On the plus side, LendKey’s cosigner release policy would allow you to thank your Mom, Dad or other guarantor and send them on their merry way after 12 to 36 months of full and prompt payments.

Pause your repayment for up to 18 months

Hiccups are a part of life, so naturally, you could expect to experience one during your student loan repayment as well. A significant benefit of borrowing from one of LendKey’s member lenders is that you could pause your loan repayment for up to 18 months (in six-month increments).

The forbearance policy is especially generous when compared with competitors. Even some top-rated lenders max out their offering at 12 months.

Borrowing from a company that promises relatively extensive hardship protection will not only put your mind at ease — it could lower your costs and keep your finances from additional harm, avoiding a serious incident like student loan default.

But be aware that like most competitors, LendKey’s policy allows interest to accrue and capitalize onto your loan balance while you step away from repayment.

What to keep in mind about LendKey student loans

Like all education debt, even LendKey student loans have some potential warts. Here are a few loan characteristics to be aware of before you select the company as your loan servicer:

Eligibility requirements leave part-time students, parents and nonpermanent residents hanging

Unfortunately, LendKey student loans aren’t available to every interested family. To qualify, you must be …

  • A U.S. citizen or permanent resident
  • At least the age of majority in your state (typically 18 to 21)
  • Enrolled at least half-time in a degree-granting program
  • Creditworthy: 3 years of credit history and an annual income of $24,000-plus

That leaves a lot of potential borrowers out of the mix. If you don’t have a green card, are attending school part time or are a parent borrowing on behalf of a student, to name a few examples, you’d be out of luck.

Fortunately, if LendKey reviews your application and excludes you from its student loans, you’ll likely be able to find another lender that suits your needs. Click below to view Student Loan Hero’s recommended lenders for the following categories:

Borrower Programs Other degrees Personal situation Lender feature
Part-time students Community college Associate degree Applying without a cosigner Credit unions
Adults returning to school Trade school Non-degree programs Bad or no credit Cosigner release
Graduate students Nursing school Economic hardship forbearance
Parents Medical school
Law school
Dental school
Business school

Not possible to check your rates without hard credit check

You might find LendKey’s platform user-friendly, but remember that it’s not your lender — the bank or credit union would be.

That explains, at least in part, why you must complete a full application off the bat, subjecting yourself to a hard credit check. There’s no way, at least currently, for the company to help you prequalify faster and with less effect on your credit.

Because each formal loan application could ding your credit, it’s best to narrow your list of preferred lenders and file your applications in a short amount of time. This way, the credit bureaus won’t penalize you for merely shopping around.

You might not receive multiple loan offers

The real boon of borrowing from LendKey is that it can help you rate-compare among lenders and connect you with lesser-known lenders you might not have considered on your own.

Unfortunately, depending on your borrowing situation, LendKey might not truly deliver part of this key benefit. After completing the first stage of your application, for example, you might be asked to select your lender, only to find a single credit union available.

Image: LendKey

In other cases, your state of residence might restrict you to just one of LendKey’s partner lenders. In November 2020, an Arkansas-based applicant would have been directed to just one LendKey affiliate, Sallie Mae.

Image: Sallie Mae

And even if LendKey’s prescribed lender offers a suitable loan agreement, you might still need to hunt around elsewhere to ensure you find your best loan available.

In-school payments are required

There are plenty of benefits of making in-school payments on student loans: Beginning to repay your debt while you’re enrolled could beef up your credit history, for example, and also stop interest from ballooning your balance.

LendKey, however, locks you into this choice. The company requires its borrowers — regardless of their financial situation or personal preference — to either make interest-only payments or fixed $25 payments while enrolled and after, while enjoying a grace period.

If you’d rather take the higher toll of accruing interest in exchange for the freedom to put off repayment, you might prefer a lender like College Ave, which offers four in-school repayment options, including full deferment.

Credit union membership could be necessary

If your LendKey student loans application directs you to select one or more credit unions, you will also have to apply — and pay for — membership at the credit union itself. The process isn’t especially difficult, and the costs can often be as low as $1-$5, but there’s more red tape here than if you elected to borrow from a bank or online-only lender.

If you don’t see a discounted rate or other unique benefits to joining and borrowing from a not-for-profit credit union, you might test the waters with no-fee online lenders, such as Ascent.

With that said, LendKey services the loan, meaning that its website will be your bookmark from application to payoff.

How LendKey compares with student loan competitors

Even if LendKey delivers you student loan quotes from multiple lenders, it would still behoove you to take your search off the platform. Other online lenders, although not marketplaces, could award you or your family more attractive loan terms.

Here’s how LendKey reviews stacks up with industry leaders like College Ave and SoFi:

LendKey College Ave SoFi
Loans for …
  • Students attending a degree-granting program at least halftime
  • Undergraduates and graduate students
  • Career school students
  • Business, law, medical and dental school
  • Parents
  • Undergraduate and graduate students
  • Business and law school
  • Parents
APRs Variable starting at 1.49%  and fixed starting at 3.99% Variable starting at 1.04%and fixed starting at 3.24% Variable starting at 1.12%and fixed starting at 4.13%
Ability to prequalify without affecting credit No Yes Yes
Borrowing amount Varies by lender, although you could be able to borrow as little as $2,000 and as much as $120,000 (undergraduates) or $160,000 (graduate students) $1,000 to 100% of your cost of attendance $5,000 to 100% of your cost of attendance
In-school repayment options Varies by lender, though you’ll have to make at least $25 monthly payments while enrolled 4 4
Repayment terms 10 years 8, 10 years 5, 10 years
Cosigner release available Yes — after 12 to 36 monthly payments, depending on the lender Yes — after half the repayment term has elapsed Yes — after 24 months of timely payments

Are LendKey student loans right for you?

When shopping around for a private student loan, we recommend comparing rates with at least three lenders. That way, you’ll find the least costly — or best overall — loan agreement for your borrowing needs.

You could qualify for relatively low interest rates from LendKey’s partner lenders. These community banks and credit unions also tack on one of the more generous forbearance policies available among private lenders.

On the downside, you might prefer full deferment to the in-school repayment options required at LendKey. More critically, you might wonder if the company lives up to its promise as a marketplace if it only connects you with a single lender, rather than a few.

Even if it doesn’t serve as a full-service platform, however, you could consider LendKey one of the “lenders” you request quotes from before making your final decision. Additionally, if you like the idea of borrowing from a nonprofit lender like LendKey’s partners, you can also explore some of the other ways to find credit union student loans that are a good fit for you.

Frequently asked questions about LendKey student loans

If our LendKey reviews didn’t answer a specific question, you can find it below.

Is LendKey good for student loans? Is LendKey a federal loan?

LendKey is a digital marketplace connecting borrowers with community bank and credit union lenders. It’s a reputable company to include in your search for student loan refinancing or private student loans.

LendKey is not affiliated with the federal government or Department of Education, and doesn’t offer federal student loans. If you decide to refinance your existing federal loans with LendKey (or any private company), they will permanently become private loans, stripped of government-exclusive protections.

Why was my LendKey student loans application denied?

It’s possible that you didn’t meet all of LendKey’s sometimes-stringent requirements.

For its part, LendKey will email you an adverse action notice upon denying your application that explains why it was rejected. You might be invited to reapply with a (different) cosigner.

For refinancing, when will LendKey pay off my old loans?

It could take 10 to 30 days between the time you sign your loan agreement and when your old loans are paid off. It’s wise to keep making the minimum payment on your original loans until LendKey has confirmed the payoff. Any overpayments will be reimbursed to you.

For student loans, how long does it take to get the funds?

LendKey estimates that can take several weeks, but typically less than 30 days, from application to funding. So, if you’re borrowing for a future semester, be sure to give yourself and your school (which must certify the loan) plenty of lead time.

Rebecca Safier contributed to this report.

Student Loan Hero has independently collected the above information related to College Ave student loans, which is current as of Nov. 16, 2020, unless otherwise noted. None of the financial institutions named has either provided or reviewed the information shared in this article.