How to Get or Refinance Puerto Rico Student Loans

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Attending college in Puerto Rico can mean living within walking distance of beautiful beaches, chowing down on scrumptious arroz con dulce (rice pudding) and getting a solid bilingual education. But, for many students, it can also mean taking out Puerto Rico student loans. In fact, at the University of Puerto Rico, students who take out loans to cover school costs borrow an average of $3,460 just for their freshman year alone.

The good news is, you have a number of options to get student loans in Puerto Rico that have affordable interest rates and favorable terms. You also have opportunities to refinance your Puerto Rico student loans after graduation to save money or even just to make your monthly payments more affordable. Read on to find out your options.

How to get Puerto Rico student loans

When looking for student loans in Puerto Rico, your options are mainly limited to the federal government or private lenders, as Puerto Rico doesn’t have some of the specific local programs found in many U.S. states.

As you consider your choices, note that private student loans do not have the same borrower protections as federal ones, so you should exhaust government loans first before getting private student loans to cover additional costs.

Federal student loans

For students in Puerto Rico, the direct loan program run by the federal government is the best place to secure financing for your education.

When you apply to take out direct loans, your credit score doesn’t matter, and you don’t need proof of income. You also don’t need to shop around among different lenders because the interest rate and origination fee for direct loans are set by the government. And fortunately, interest is typically lower than for private loan rates.

There are two types of direct loans: subsidized and unsubsidized loans. Only undergraduates with financial need can qualify for subsidized loans, and the government pays interest on these loans while students are in school and during a six-month grace period afterward. On the other hand, both undergraduates and graduate or professional students can get unsubsidized loans, which aren’t need-based and do not come with subsidized interest while in school.

Graduate students and parents can also take out PLUS loans, though interest rates for these are a little higher, so it’s important to compare options carefully in case a private student loan might offer a better deal.

Federal loans have many important borrower protections not available with private lenders. These include income-based repayment plans that cap monthly payments based on income, as well as Public Service Loan Forgiveness (PSLF) to allow qualifying workers to have their loan balances forgiven after 120 on-time payments.

Puerto Rico does not offer its own separate in-state loan program, but the Department of Education announced recently that it was working with the Puerto Rico Department of Education to create a student-centered funding system under the Every Student Succeeds Act.

To become eligible for federal student loans while going to school in Puerto Rico, students need to complete their Free Application for Federal Student Aid (FAFSA). Here’s an overview of federal student loan options and terms.

Federal student loanWho can use it?Interest rate (2018-19)One-time loan feeInterest paid for you during defermentAnnual loan limit
SubsidizedUndergraduate students with a demonstrated financial need5.05%1.062%YesUp to $5,500 per school year
UnsubsidizedUndergraduate students5.05%1.062%NoUp to $7,500 per school year for dependent students

Up to $12,500 per school year for independent students

Unsubsidized (for graduate students)Students working toward a graduate or professional degree6.60%1.062%NoUp to $20,500 per school year
PLUSGraduate students and parents of undergraduate students7.60%4.248%NoCost of attendance, after all other student aid is applied
All information current as of Oct. 4, 2018. Source: Federal Student Aid

Private student loans

After exhausting federal funding, students who still need to borrow funds may turn to private student loans provided by banks, credit unions and online lenders. Some good options to obtain private student loans in Puerto Rico include:

  • College Ave
    • Currently offers APRs ranging from 1.04% to 12.99%
    • Extends parent loans as well as loans for students
  • Ascent Student Loans
    • Variable APRs: 2.46% – 12.98%
    • Fixed APRs: 3.39% – 14.50%
    • Offers 1% cashback graduation award
  • LendKey
    • APRs here currently go from 1.49% to 8.49%
    • Allows you to release your cosigner

There are no standard interest rates or terms with private lenders, unlike with federal student loans. This makes it important to comparison shop among different lenders to find the right private student loans for your situation.

Students will need good credit and proof of income to get private student loans, which makes qualifying difficult for many young people. In this case, finding a cosigner to accept shared legal responsibility for the loans could be necessary.

You’ll also need to pay attention to whether rates are fixed — which means they’ll stay the same the whole time you have the loan — or variable and can fluctuate with the market, meaning your payment could potentially rise. Federal loans, by comparison, are always fixed.

How to refinance Puerto Rico student loans

After graduation, you may decide to refinance your Puerto Rico student loans. This means taking a new loan and using the funds to repay your existing student debt.

Refinancing could potentially lower your interest rate, making monthly payments more affordable. You can also choose the term length of your new loan, giving yourself more time with smaller payments, or shortening it to get out of debt faster and save on interest.

Likewise, you also have the convenience of making several loans into a single loan, simplifying your monthly payments.

There are a number of different lenders offering refinance loans including:

  • Earnest
    • Refinancing APRs run from 1.99% to 5.89%
    • Has wide range of terms, from 5 to 20 years
  • CommonBond
    • Offers APRs from 1.99% to 6.84%
    • Offers unemployment protection

Since there are variations in terms and interest rates from one refinance loan to another, it is also important to shop around among different lenders that refinance Puerto Rico student loans.

Note that you can refinance both federal and private student loans, but by refinancing federal student loans, you’ll lose access to key borrower protections, including both PSLF and income-based plans.

On the other hand, the federal government does have a direct consolidation loan you can use to turn all your (federal) loans into one, and even adjust the terms, though the interest rate will stay more or less the same.

Bottom line: Student loans in Puerto Rico

When you go to school in Puerto Rico, borrowing is just one option for paying for college. You should always exhaust scholarships and grants first so that you can borrow the minimum possible and keep your debt reasonable.

Once you’ve run through all your sources of money, as well as work-study options and college savings, look for the most affordable loans possible. Here, you’ll usually want to opt for federal loans first so you can keep interest costs down and make repaying Puerto Rico student loans easier.

Note: Student Loan Hero has independently collected the above information related to student loan interest rates and terms, which is accurate as of October 2018. The financial institutions mentioned have neither provided nor reviewed the information shared in this article.

Need a student loan?

Here are our top student loan lenders of 2021!
LenderVariable APREligibility 
1.04% – 11.98%1Undergraduate, Graduate, and Parents

Visit College Ave

1.13% – 11.23%*,2Undergraduate, Graduate, and Parents

Visit SallieMae

1.24% – 11.99%3Undergraduate and Graduate

Visit Discover

1.78% – 11.89%4Undergraduate and Graduate

Visit SoFi

1.05% – 11.44%5Undergraduate and Graduate

Visit Earnest

1.19% – 11.51%6Undergraduate and Graduate

VISIT CITIZENS

2.46% – 12.98%7Undergraduate and Graduate

Visit Ascent

* 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.

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.
 
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 1/27/2021. 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 January 1, 2021. 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 January 1, 2021. 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.html 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 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).


5 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).


6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

Undergraduate Rate Disclosure: Variable interest rates range from 1.19% – 11.51% (1.19% – 10.67% APR). Fixed interest rates range from 3.99% – 11.80% (3.99% – 10.92% APR).

Graduate Rate Disclosure: Variable interest rates range from 1.37% – 11.41% (1.37% – 11.12% APR). Fixed interest rates range from 4.39% – 11.70% (4.39%-11.39% APR).

Business/Law Rate Disclosure: Variable interest rates range from 1.37% – 9.55% (1.37% – 8.83% APR). Fixed interest rates range from 4.13% – 9.84% (4.13% – 9.12% APR).

Medical/Dental Rate Disclosure: Variable interest rates range from 1.37% – 8.35% (1.37% – 8.05% APR). Fixed interest rates range from 4.03% – 8.64% (4.03% – 8.34% APR).

Parent Loan Rate Disclosure: Variable interest rates range from 2.11% – 7.42% (2.11%-7.42% APR). Fixed interest rates range from 4.69% – 7.83% (4.69% – 7.83% APR).

Bar Study Rate Disclosure: Variable interest rates range from 4.47% – 9.61% (4.47% – 9.54% APR). Fixed interest rates range from 7.39% – 12.94% (7.38% – 12.81% APR).

Medical Residency Rate Disclosure: Variable interest rates range from 3.56% – 7.06% (3.56% – 6.78% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.08% APR).

Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the
preceding calendar month. As of Feburary 1, 2021, the one-month LIBOR rate is 0.12%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%. 

Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.

Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer.  Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.

Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.

Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.

Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.


7 Important Disclosures for Ascent.

Ascent Disclosures

Ascent Student Loans are funded by Richland State Bank (RSB), Member FDIC. Loan products December not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions December apply.  For Ascent Terms and Conditions please visit: www.AscentStudentLoans.com/Ts&Cs

Rates are effective as of 12/01/2020 and reflect an automatic payment discount of 0.25% on the lowest offered rate and a 2.00% discount on the highest offered rate.  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.  For Ascent rates and repayment examples please visit: www.AscentStudentLoans.com/Rates

1% Cash Back Graduation Reward subject to terms and conditions. Click here for details.