Refinancing with CommonBond
Refinancing rates from 2.14% APR. Checking your rates won’t affect your credit score.
Lots of people refinance their student loans to lower their interest rate and save money. But refinancing isn’t the best financial choice for everyone.
Along with the benefits of refinancing student loans, there are also some drawbacks. Depending on your situation, the cons could outweigh the pros.
Before refinancing your student loans, consider whether any of the following conditions apply. If they do, you might be better off sticking with your current repayment plan.
1. You don’t have secure income
When you refinance your student loans, you take out a new loan from a private lender. The lender repays all your loans, whether federal or private, so you don’t have to deal with your old loan servicers anymore. Then, it issues you a new loan with — hopefully — better terms.
Typically, people refinance to lower their interest rates or monthly payments. But even if you get more appealing terms, you still need the means to pay back your new loan. If you run into financial hardship, the private lender might not be flexible about your options.
If you’re worried about losing your income in the near future, you might not want to refinance just yet. Before turning all your student loans into one private loan, make sure you feel confident about your ability to make monthly payments.
2. You might need an income-driven repayment plan in the future
Since you can only refinance with a private lender, you’ll no longer hold federal student loans. As a result, you’ll lose access to helpful federal programs, such as income-driven repayment.
Income-driven repayment plans adjust your monthly payments when you’re having trouble making them. Income-based repayment (IBR), for instance, caps your payments at 10 to 15 percent of your monthly income. The Revised Pay As You Earn (REPAYE) plan makes sure you’re not spending more than 10 percent.
Some of these plans even let you spread out your repayment over 20 to 25 years and will forgive any remaining balance after that time.
Most private lenders set a repayment cap at 15 to 20 years and typically don’t offer income-based protections. Before refinancing, consider whether or not you’ll need access to an income-driven repayment plan. If you will, wait to refinance your student debt.
3. You’re working toward federal loan forgiveness
The federal government offers several loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness. These programs cancel your remaining debt balance after a certain number of years of service.
If you refinance, you’ll no longer qualify for federal loan forgiveness, though. You might still be eligible for loan forgiveness and assistance programs from individual states or universities, but you won’t be able to participate in a federal program like PSLF.
4. Your average weighted interest rate is already low
Refinancing can save you lots of money over the life of your loan — if it lowers your interest rate. Let’s say your loans have an average weighted interest rate of 7% and you have nine years left of repayment. By refinancing, you lower the interest rate to 5% and choose a 10-year plan. Even after adding a year of repayment to your loan, you’ll save $2,337 in interest in the long run.
Student loan interest accumulates on a daily or monthly basis. If you can lower the rate significantly, you could save a lot of money. But if your average interest rate is already low, a refinancing lender may not be able to beat it.
Browse what’s available, and see what interest rates lenders will offer. SoFi, for instance, offers variable rates between 2.14% and 7.71% and fixed rates between 3.48% and 7.94%. If these rates aren’t much lower than what you have now, it might not be worth it to refinance.
And if you’re not sure how much you’d save or spend, check out our student loan refinancing calculator. After entering your student loan debt and interest rates, you’ll see a full comparison of one student loan with another.
5. You’re almost done paying your loans
Refinancing may not help you very much if you’re nearing the end of your repayment. When you refinance, you’ll choose a new plan, whether it’s five, 10, 15, or 20 years. If you’re already almost out of debt, switching to a new lender may not be worth the trouble.
Plus, you want to make sure you’re not adding time to your repayment plan. Unless your interest rate drops significantly, adding years onto your repayment plan would just make your debt more expensive.
Consider your personal situation before refinancing
Refinancing is most beneficial for those with a steady income who don’t need federal income-driven plans or forgiveness. If you’re worried about meeting monthly payments, it’s likely best to wait before switching your student loans to a private lender.
Before you decide to refinance, make sure that it would benefit you in the long run. Whether it reduces your interest rates or monthly payments, refinancing should make your student loans more manageable.
Even if you’re not a good candidate now, you might be better suited for refinancing in the future. So before changing to a new loan servicer, make sure you understand the full implications of your decision.
If you’re still not sure, ask yourself these questions before refinancing your student loans.
Interested in refinancing student loans?Here are the top 7 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|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 3.45% APR (with Auto Pay) to 7.49% APR (with Auto Pay). Variable rate loan rates range from 2.14% APR (with Auto Pay) to 6.79% 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 September 6, 2019, 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 09/06/2019. 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 firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 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 SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
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.
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.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). 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 2.19% effective August 10, 2019.
6 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.
7 Important Disclosures for College Ave.
College Ave 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.
1College Ave Refi Education loans are not currently available to residents of Maine.
2All rates shown 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.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. 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 08/01/2019. Variable interest rates may increase after consummation.
|2.14% – 6.79%1||Undergrad & Graduate|
|2.14% – 7.71%2||Undergrad & Graduate|
|2.43% – 6.65%3||Undergrad & Graduate|
|2.43% – 7.60%4||Undergrad & Graduate|
|2.14% – 8.01%5||Undergrad & Graduate|
|2.06% – 8.93%6||Undergrad & Graduate|
|2.74% – 7.24%7||Undergrad & Graduate|