LendKey Private Student Loans Review: Connect with Community Banks, Credit Unions

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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 private 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, ideally, compare multiple loan offers in one place.

In addition to the student loan refinancing it offers to graduates, LendKey’s partner lenders also offer in-school loans with competitive interest rates and some partner lenders even offer an an attractive cosigner release policy. Read on for all the details.

LendKey student loans review: The basics

To be eligible at LendKey — founded in 2009 with offices in New York City and Cincinnati — you have to be a U.S. citizen or permanent resident attending an eligible school. You must also meet the specific lender’s credit and income requirements to qualify for a loan. You (or your cosigner), for example, would need a credit score of at least 660.

Keep in mind that 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 private student loans serviced by LendKey:

  • Available for undergraduate and graduate students
  • Borrow as little as $5,000 and as much as $125,000 (undergraduates) or $250,000 (graduate students)
  • Fixed and variate interest rates available
  • No application or origination fees
  • No prepayment penalties
  • 6-month low-payment grace period after you leave school (see below)
  • Autopay rate discount of 0.25%
  • Up to 18 months of forbearance
  • Cosigner release offered after 12-36 prompt monthly payments

There are also some factors of LendKey private student loans that might not be as appealing:

  • 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 is available

What we like about LendKey private student loans

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.

Your ‘Academic Credit Score’ could lower your rate

You might wonder why LendKey also asks you to select the range of your grade point average (GPA) or 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 the 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, some LendKey network lenders have a cosigner release policy that 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 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 private student loans

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.

Here are a few more factors to consider before choosing LendKey as your loan servicer:

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.

In other cases, your state of residence might restrict you to just one of LendKey’s partner lenders. And even if LendKey’s prescribed lender offers a suitable loan agreement, you might still need to hunt around elsewhere to ensure you find the best loan available.

You are required to make in-school payments

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

Many LendKey partner lenders, however, lock you into this choice. They require 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.

You might need to join a credit union first

If your LendKey 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.

Are LendKey private 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 by LendKey’s partners. 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 one-stop shop, 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.

Need a student loan?

Here are our top student loan lenders of 2020!
LenderVariable APREligibility 
1.09% – 11.98%1Undergraduate, Graduate, and Parents

Visit College Ave

1.25% – 11.10%*,2Undergraduate and Graduate

Visit SallieMae

1.24% – 11.99%3Undergraduate and Graduate

Visit Discover

1.24% – 11.44%4Undergraduate, Graduate, and Parents

Visit Earnest

1.78% – 11.89%5Undergraduate and Graduate

Visit SoFi

2.69% – 12.98%6Undergraduate and Graduate

Visit Ascent

3.52% – 9.50%7Undergraduate and Graduate

Visit CommonBond

* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.

1 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

  1. Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
  2. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a first year graduate student borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 11/2/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.


2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

3 Important Disclosures for Discover.

Discover Disclosures

  1. Aggregate loan limits apply.
  2. Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
  3. Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and Auto Debit Reward. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans, including undergraduate and graduate loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of October 1, 2020. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Learn more about Discover Student Loans interest rates.
  4. Lowest APRs shown for the Discover Private Consolidation Loan are available for the most creditworthy applicants and include a 0.25% interest rate reduction while enrolled in automatic payments.The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of October 1, 2020. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Visit Discover.com/student-loans/consolidation for more information, including up-to-date interest rates and APRs.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

4 Important Disclosures for Earnest.

Earnest Disclosures

  1. Rates include 0.25% Auto Pay Discount
     
  2. Explanation of Rates “With Autopay” (APD)
    Rates shown include 0.25% APR discount when client agrees to make monthly principal and interest payments by automatic electronic payment. Use of autopay is not required to receive an Earnest loan.

    Available Terms
    For Cosigned loans – 5, 7, 10, 12, 15 years. 
    Primary Only – 10, 12, 15 years

    In school deferred payment is not available in AL, AZ, CA, FL, MA, MD, MI, ND, NY, PA, and WA).


5 Important Disclosures for SoFi.

sofiDisclosures

UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.26% annual percentage rate (“APR”) (with autopay), variable rates from 1.88% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.37% APR (with autopay), variable rates from 1.78% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.52% APR (with autopay), variable rates from 1.95% to 11.89% APR (with autopay). PARENT LOANS: Fixed rates from 4.60% to 10.76% APR (with autopay), variable rates from 1.88% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 11/04/2020. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).


6 Important Disclosures for Ascent.

Ascent Disclosures

Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.

  1. Competitive variable rates calculated monthly at the time of loan approval based on a margin plus the 1-Month London Interbank Offered Rate (LIBOR) rounded to the nearest 1/100th of a percent. The current LIBOR is 0.152%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes. Rates are effective as of 11/01/2020 and reflect an Automatic Payment Discount. Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month.(See Automatic Payment Discount Terms & Conditions.)
    1. Undergraduate Loans: Your variable interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 2.69% and 12.98%.  Fixed rate loans will not increase or decrease over the life of the loan and have an APR range between 3.58% and 14.50%. Rates reflect an Automatic Payment Discount of 0.25% on the lowest offered rate and a 2.00% discount on the highest offered rate. The following table shows a 48 month in-school period plus 9 months of grace prior to a full repayment term of either: 60-months (lowest fixed/variable rate), 144-months (highest fixed rate) or 180-months (highest variable rate) with examples of (i) Interest Only payments, (ii) $25 Minimum payments, and (iii) Deferred repayment options.((See Undergraduate Loan repayment examples.)
    2. Graduate Loans (Graduate, MBA & Law): Your variable interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 3.65% and 12.40%. Fixed rate loans will not increase or decrease over the life of the loan and have an APR range between 4.62% and 13.54%. Rates reflect an Automatic Payment Discount of 0.25%. The following table shows a 36 month in-school period plus 9 months of grace prior to a full repayment term of either: 84-months (lowest fixed/variable rate), 144-months (highest fixed rate), or 180-months (highest variable rate) with examples of (i) Interest Only payments, (ii) $25 Minimum payments, and (iii) Deferred repayment options. (See Graduate Loan repayment examples.)
    3. Medical: Your variable interest rate may increase or decrease, based on LIBOR monthly changes, resulting in an APR range between 3.65% and 12.40%. Fixed rate loans will not increase or decrease over the life of the loan and have an APR range between 4.62% and 13.54%. Rates reflect an Automatic Payment Discount of 0.25%. The following table shows a 48 month in-school period plus 36 months of grace prior to a full repayment term of either: 84-months (lowest fixed/variable rate), 144-months (highest fixed rate), or 240-months (highest variable rate) with examples of (i) Interest Only payments, (ii) $25 Minimum payments, and (iii) Deferred repayment options. (See Medical Loan repayment examples.)
  2. Payments may be deferred. Subject to lender discretion, forbearance and/or deferment options may be available for borrowers who are encountering financial distress.
  3. Making interest only or partial interest payments while in school will not reduce the principal balance of the loan. There are three (3) flexible in-school repayment options that include fully deferred, interest only and $25 minimum repayment. (See Undergraduate Loan repayment examples.)
  4. Flexible repayment plans may be offered up to a fifteen (15) year repayment term for a variable rate loan and ten (10) year repayment term for a fixed rate loan. Students must be enrolled at least half-time at an eligible school. Minimum loan amount is $2,000.
  5. Interest rate reduction of either 0.25% (for Credit-Based Loans) or 2.00% (for Undergraduate Future Income-Based Loans) applies only when the borrower and/or cosigner sign up for automatic payments and the payment amount is successfully deducted from the designated bank account each month. The amount of the discount is dependent upon the loan product and credit history of the borrower at the time of application. Interest rate reduction(s) will not apply during periods when no payment is due, including periods of in-school, deferment, grace or forbearance, unless a regular payment amount has been arranged with the servicer. If you have two (2) consecutive returned payments for Nonsufficient Funds, we may cancel your automatic debit enrollment and you will lose the interest rate reduction. You will then need to re-qualify and re-enroll in automatic debit payments to receive the interest rate reduction.(See Automatic Payment Discount Terms & Conditions.)
  6. All applicants (individual and cosigner) are required to complete a brief online financial literacy course as part of the application process to be eligible for funding.
  7. Eligibility, loan amount and other loan terms are dependent on several factors, which may include: loan product, other financial aid, creditworthiness, school, program, graduation date, major, cost of attendance and other factors. Aggregate loan limits may apply. The cost of attendance is determined and certified by the educational institution.
  8. The legal age for entering into contracts is eighteen (18) years of age in every state except Alabama where it is nineteen (19) years old, Nebraska where it is nineteen (19) years old (only for wards of the state), and Mississippi and Puerto Rico where it is twenty-one (21) years old.
  9. 1% Cash Back Graduation Reward subject to terms and conditions. Click here for details. In order to be eligible for the 1% Cash Back Graduation Reward, borrower must meet the following criteria after graduation:
    • The student borrower has graduated from the degree program that the loan was used to fund.
    • The student borrower may change majors and/or transfer to a different school, but must obtain the same level of degree (e.g. – undergraduate or graduate)
    • The graduation date is more than 90 days and less than five (5) years after the date of the loan’s first disbursement.
    • Any loan that the student has borrowed under the Ascent loan is not more than 30-days delinquent or in a default status as of the graduation date and until any Graduation Reward is paid.
  10. Students can apply to release their cosigner and continue with the loan in only their name after making the first 24 consecutive regularly scheduled full principal and interest payments on-time and meeting the other eligibility criteria to qualify for the loan without a cosigner.

* Application times vary depending on the applicant’s ability to supply the necessary information for submission.


7 Important Disclosures for CommonBond.

CommonBond Disclosures

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 0.17% effective Sep 1, 2020 and may increase after consummation.