How to Get or Refinance Tennessee Student Loans

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If you’re headed to one of Tennessee’s colleges or universities, you might need Tennessee student loans to cover costs. And if you’ve already graduated, you might be looking for repayment and refinancing options.

Here’s a rundown of what you should know about student debt in the Volunteer State — specifically:

Tennessee student debt: At a glance
Average debt upon graduation in Tennessee$26,838
Percent of students who graduate with debt55%
National ranking for average debt34
Info based on the class of 2018
Source: The Institute for College Access & Success

How to get student loans in Tennessee

Savings and scholarships can help you pay for college tuition, but they don’t always cover the full cost. If you still have a gap in funding, you might consider student loans.

Although you won’t find state-sponsored loans in Tennessee, you can borrow federal student loans through federal student aid, as well as private student loans from banks, online lenders or credit unions.

You can also get valuable guidance and resources from Tennessee Student Assistance Corp., an organization dedicated to helping students and their families finance the costs of higher education.

Federal student loans

Through federal student aid, the Department of Education offers federal student loans to undergraduates and graduates. There are two main types:

  • Direct subsidized loans: These loans don’t accrue interest while you’re in school and for six months after you graduate. Loans disbursed on or after July 1, 2020, come with a 2.75% interest rate and a 1.059% origination fee.
  • Direct unsubsidized loans: These loans accrue interest from the date of disbursement. They also come with a 2.75% interest rate and 1.059% origination fee (for loans disbursed on or after July 1, 2020) for undergraduates.

Only students with financial need can qualify for subsidized loans, but any student enrolled in an eligible school can borrow unsubsidized loans. You can access direct loans by submitting the Free Application for Federal Student Aid, also known as FAFSA.

Once you get accepted to college, your financial aid award letter will detail what federal student loans you can borrow. But since federal loans come with borrowing limits, you might still need more money to pay for school.

Dependent undergraduate freshmen, for instance, can borrow up to $5,500 in direct loans their first year, which might not be enough to pay for tuition, housing, dining, books and other expenses. If you find yourself coming up short, you have two other options for student loans.

The first is for your parents to take out a Parent PLUS loan, which is a federal student loan that comes with a 5.3% interest rate and 4.236% origination fee, for loans disbursed on or after July 1, 2020. Parents can borrow up to the full cost of attendance of their child’s school, but they must pass a credit check to qualify.

Your other option is to borrow a private student loan from a private lender. Although private loans can be useful, you should probably only take one out after you’ve exhausted your other options.

Private student loans

Federal student loans are almost always a better option than private ones since they typically come with lower interest rates and various borrower protections, such as income-driven repayment (IDR) plans and forbearance in the case of financial hardship.

Federal loans also qualify for federal forgiveness programs, such as Public Service Loan Forgiveness and Teacher Loan Forgiveness, while private ones don’t. Before looking to a private lender, you should likely max out your eligibility for federal student aid.

But if you’ve maxed out federal student loans and still need funding, private student loans in Tennessee could help. You have a lot of lenders from which to choose, including a local community bank or an online lender.

Private lenders set their own underwriting requirements, so you typically must have a certain credit score and income to qualify. Most undergraduates can’t borrow on their own, so they apply with a cosigner, such as a parent.

Your interest rate will be based on you or your cosigner’s credentials, and you can typically choose between a fixed and variable rate. Each lender also determines its own repayment options, with most letting you choose a term between five and 15 years.

Some lenders also offer extra protections, such as forbearance (in case you lose your job or return to school), cosigner release after months of on-time repayment or a grace period that pushes off your first bill until after you graduate.

You could borrow from one of Tennessee’s banks or credit unions or choose a national lender that provides student loans throughout the country. Here are some leading lenders for private student loans in Tennessee (with current interest rates unless stated otherwise):

  • Eastman Credit Union
    • Headquarters: Kingsport
    • Provides a student line of credit with fixed APRs from 4.65% as of Aug. 10, 2020
    • Allows financing up to 21 years
    • Has flexible eligibility requirements for membership
  • Leaders Credit Union
    • Headquarters: Jackson
    • Finances student loans up to $75,000
    • Offers variable APRs starting at 5.60% on undergraduate student loans as of Aug. 10, 2020
    • Serves people who live, work, worship or attend school in eligible counties in Tennessee or who meet its other membership requirements
  • Ascent
    • Finances student loans for undergraduates and graduate students across the U.S.
    • Offers variable APRs from 2.69% and fixed APRs from 3.58% for undergraduates
    • Provides repayment terms of five, 10 or 15 years for undergraduates and 10 or 15 years for graduate students (20-year terms are available for some programs)
    • Awards a 1% cash-back graduation reward if you meet certain terms and conditions
  • CollegeAve
    • Offers loans to students across the country from $1,000 up to your school’s cost of attendance
    • Has variable APRs from 1.09% and fixed APRs from 3.49%
    • Lets you repay your loan over five, eight, 10 or 15 years
  • Sallie Mae
    • Lends student loans nationwide for up to 100% of your school’s cost of attendance
    • Has variable APRs from 3.50% and fixed APRs from 5.49%

Since private student loans differ by lender, make sure to shop around to find your best rates. Several lenders let you apply for an instant rate quote so that you can see your offer without making a commitment or dinging your credit score.

Along with comparing private student loan offers, make sure you understand how repayment on your loan will work. You can use our student loan payment calculator to estimate your future monthly bills and interest payments.

That way, you’ll be prepared to manage student loan repayment and can avoid taking on too much debt to pay for college.

How to refinance Tennessee student loans

After you’ve taken out student loans, you might be ready to forget about them. But being proactive about student loan repayment could save you money and get you out of debt faster. Choosing to refinance your student loans is one strategy for speeding up debt payoff.

When you refinance, you could qualify for a lower interest rate on your debt. Plus, you can choose new repayment terms, whether you choose a shorter term to pay off your loans faster or a longer term to decrease your monthly payments. Finally, you could combine multiple loans into one, which could simplify student loan repayment.

Refinancing, by the way, is different from federal student loan consolidation, which involves combining multiple federal student loans into one with a direct consolidation loan. This approach to consolidation could help you simplify student loan repayment, but it won’t result in a lower interest rate or save you money.

That said, student loan refinancing could come with a downside. When you refinance federal student loans, you turn them into a private one. That means you lose access to federal IDR plans and forgiveness programs. Make sure you’re confident about your ability to pay back your loan before shutting the door on federal protections.

If you decide to refinance student loans (and have strong enough credit to qualify), consider these banks, credit unions and online providers for refinancing your student loans in Tennessee:

  • SouthEast Bank
    • Lets you combine multiple loans into one through its Education Loan Finance (ELFI) division
    • Offers repayment terms from five to 20 years
    • Offers you a choice of variable or fixed interest rates
  • Eastman Credit Union
    • Allows you to consolidate federal and private student loans
    • Offers rates starting at 3.75% APR as of Aug. 10, 2020
  • Leaders Credit Union
    • Refinances student loans up to $100,000
    • Lets you choose between fixed and variable APRs starting at 4.04% as of Aug. 10, 2020
    • Offers repayment terms of five, 10 and 15 years
  • LendKey
    • Partners with community banks and credit unions to bring you student loan refinancing offers
    • Makes it easy to check your rates and prequalify with no impact on your credit score
  • Earnest
    • Refinances student loans from $5,000 to $500,000
    • Offers competitive APRs from 2.98%
  • SoFi
    • Offers instant prequalification so that you can check your rates
    • Has APRs from 2.99%
    • Offers career coaching, exclusive member events and other benefits

Just as you should shop around before choosing a private student loan, it’s also important to compare offers before you refinance student loans. By doing your due diligence, you can find an offer with a great interest rate and excellent benefits.

Final thoughts on student loans in Tennessee

Student loans can be a valuable part of your strategy for covering the costs of higher education. But if you’re not careful, you could end up taking on too much debt.

Before signing any paperwork, make sure to estimate the long-term costs of borrowing. Make sure you’re clear on what repayment will look after — or even before — you graduate.

The last thing you want to do is be caught unaware when your first student loan payment is due. Arm yourself with knowledge so that you’re ready to hit the ground running when student loan repayment kicks in.

A good place to start is this guide on how to repay student loans ahead of schedule. And if you’re looking to refinance, check out our student loan refinancing FAQ for answers to all your questions.

Need a student loan?

Check out our top picks below or learn more about other ways to pay for college.
Variable APRDegrees That QualifyMore Info
1.09% – 11.98%1 Undergraduate
Graduate

Visit College Ave

1.25% – 11.10%2 Undergraduate
Graduate

Visit SallieMae

1.24% – 11.99%3 Undergraduate
Graduate

Visit Discover

1.24% – 11.44%4 Undergraduate
Graduate

Visit Earnest

1.78% – 11.89%5 Undergrad & Graduate

Visit SoFi

2.69% – 12.98%6 Undergraduate
Graduate

Visit Ascent

3.52% – 9.50%7 Undergraduate
Graduate

Visit CommonBond