I Just Refinanced My $20K Student Loan — Here’s How I Did It

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Refinancing with Laurel Road

Refinancing rates from 1.89% APR. Checking your rates won’t affect your credit score.

Check out Laurel road

When I graduated from college, I wasn’t aware that student loan refinancing was an option. Instead, I just got set up with the Standard Repayment Plan for my $20,000 student loan and prepared to dutifully make payments for the next decade.

But once I learned about refinancing, I realized I could save money and at the same time, pay my loan off faster. Instead of wasting my paycheck on interest, I could keep more of it for myself.

Still, I was nervous about making the wrong financial move. Here’s how I addressed my concerns and refinanced my student loan for better terms.

I weighed the pros and cons of refinancing

Before making any permanent changes to my student loan, I did a bunch of research on refinancing. I learned how student loan refinancing works and weighed the pros and cons.

The pros were fairly straightforward. Refinancing could leave me with lower monthly payments and a more competitive interest rate. Over the years, I could save hundreds — if not thousands of dollars — on student loan interest.

I could also move away from my old loan servicer, Navient. Although I’d never had problems myself, I knew other borrowers had serious complaints about the company. Switching to a different lender felt like another benefit in my eyes.

But I would also be giving up a few things. By refinancing, I would be changing a federal student loan of $20,000 into a private one. As a result, I would lose access to federal programs such as income-driven repayment and forbearance. If I were to lose my job, I wouldn’t have the same federal protections to help me out.

Ultimately, I felt confident about my ability to pay back my loans. I had a steady income, and since I was a few years out of college my credit score was in decent shape. A strong credit score could mean competitive terms on a refinanced student loan.

The pro of saving money outweighed the con of privatizing my student loan. Confident with my decision, I kicked my plans to refinance into action.

I checked my rates with several lenders

My first step toward refinancing involved applying for a rate quote with various lenders. This rate check let me compare preliminary offers. It didn’t affect my credit score at all.

I thoroughly compared the rates and terms of different private lenders and applied for a rate quote with Citizens BankSoFiCommonBond, and other banks.

Although each rate quote application looked a little different, the process only took a few minutes. Most of the lenders asked for my name, salary, education level, and loan amount.

Then, they showed me preliminary offers for loans. Interest rates varied depending on the length of the repayment plan and whether they were variable or fixed.

After comparing my offers, I saw that Citizens Bank offered me the lowest interest rate. By choosing Citizens Bank, I would save the greatest amount of money on my student loan.

I compared my new student loan with my old one

My $20,000 student loan from Navient had a 5.96% interest rate, and I was chipping away at it on a 10-year plan. My payments were about $250 per month.

My research on refinancing, though, motivated me to pay off the loan faster. I couldn’t crush through $20,000 in one year, but I could swing a five-year repayment plan.

Citizens Bank offered me a five-year plan with a 4.99% fixed interest rate. By paying $100 extra per month, I’d get out of debt years ahead of schedule. Plus, I’d get an additional 0.25% interest rate deduction by setting up auto-pay.

Before selecting this offer, I used a student loan refinancing calculator to compare my old loan with the new one. By reducing my rate from 5.96% to 4.74% (with the rate deduction), I would save almost $2,700 in interest over the life of my student loans.

That amount of savings made the decision a no-brainer. I was ready to refinance my $20,000 student loan with Citizens Bank.

Refinance student loans application

Image credit: Citizens Bank

I filled out a student loan refinancing application

Once I chose my new loan terms, it was time to submit a full application. I entered my name and contact information, as well as details on my education.

To confirm this information, I had to upload two main documents: a recent pay stub from my employer and a billing statement from my student loan.

I was able to access both of these documents online. Then, I simply uploaded them to the Citizens Bank application.

Finally, I read over the forms to make sure everything was correct. At this point, all I had to do was hit “submit” and wait for approval on my refinanced student loan.

The entire refinancing process took a few weeks

Once I submitted my application, I didn’t have to do anything but wait to hear from Citizens Bank. After a few weeks, I got an email that my loan was approved.

I could log into my account and set up auto-pay from my bank account. By setting up auto-pay, I knew I wouldn’t miss a payment as I transitioned from Navient to Citizens Bank.

Within the month, I was notified that my Navient loan had been closed. I logged into my Navient account and confirmed that the new balance was indeed $0.

Federal student loan repaid

Image credit: Navient

From start to finish, the entire refinancing process took less than a month. Now, I don’t have to think about my student loan, unless I want to throw an extra payment at it from time to time.

I’m confident that I have the best terms currently available to me, plus I’m on a repayment plan that makes sense for my income.

Getting out of student loan debt

The biggest lesson I learned from this process was how important it is to be proactive about your student debt. You don’t need to passively accept the standard plan you get straight out of school.

Instead, choose a plan that best fits your individual situation. If you can swing it, you could pay your student loans off ahead of schedule. Just imagine how good it will feel to never have another student loan bill.

However, refinancing isn’t the best financial move for everyone. Federal student loans, for instance, have some protections that most private lenders don’t offer. But if you feel sure you can pay back the loan, refinancing can make it easier.

For me, this process was empowering. By taking control of my student debt, I feel more confident about handling my money and taking control of my financial future.

This report was originally published August 9, 2017.

Interested in refinancing student loans?

Here are the top 6 lenders of 2020!
LenderVariable APREligible Degrees 
1.99% – 5.64%1Undergrad
& Graduate

Visit Earnest

1.89% – 5.90%2Undergrad
& Graduate

Visit Laurel Road

2.25% – 6.28%3Undergrad
& Graduate

Visit SoFi

1.89% – 6.77%4Undergrad
& Graduate

Visit Splash

2.39% – 6.01%Undergrad
& Graduate

Visit Elfi

1.99% – 5.61%5Undergrad
& Graduate

Visit CommonBond

Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.

Earnest Disclosures

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.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

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.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 2.99% APR to 6.28% APR (with AutoPay). Variable rates from 2.25% APR to 6.28% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.25% APR assumes current 1 month LIBOR rate of 0.18% plus 2.32% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. 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. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. 

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.

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 0.16% effective Sep 1, 2020 and may increase after consummation.

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.