Best Banks for Student Loan Refinance

Debt can be extremely overwhelming, especially when you have thousands upon thousands of dollars in student loan debt. It seems that as higher education has become more of a requirement to get a good job, it has also gotten more and more expensive to go to college. Because the job market has only been slowly recovering since the recession, many college grads are having difficulty finding a job that will make it possible to survive and pay off their student loan debt.

Fortunately for those who are looking to pay off student loan debt, there are a few options. Many college graduates have the opportunity to refinance or consolidate their loans. To do so, a bank who can help you refinance will look into your credit score, your income, savings, college degree and the outstanding amount on your loans.

Just about every bank offers some kind of refinancing, however, there are a few banks that may be better than others when it comes to student loan refinancing:

SoFi

SoFi offers refinancing on many different types of loans, but among the banks that refinance student loans, they are one of the best. In order to qualify for refinancing through the company you will have had to have completed an undergraduate or graduate degree program. SoFi offers refinancing for both private and federal student loans. They have repayment terms of five, 10, 15 and 20 years and they do not have any prepayment penalties. This means that if you decide to pay your loan off early they will not penalize you.

SoFi will also pause your loan payments if you become unemployed. The company will also help you find a new job. The company also has some of the lowest loan rates without a cosigner. They offer 2.13 percent APR to 5.68 percent APR (with autopay) variable rates. They cap their variable rates at 8.95 percent to 9.95 percent APR. SoFi’s fixed rates sit between 3.50 percent APR to 7.49 percent APR (with autopay). On average, people who refinance their student loans through SoFi save $13,0917.

Earnest

Earnest, like SoFi, offers refinancing for both private and federal loans for graduate and undergraduate degrees. Earnest also offers the same unemployment protection. They will pause the payments on your loan if you lose your job. You can pick any repayment plan, with the number of years to repay starting at five.

Variable rates for refinancing through Earnest start at 2.13 percent. Fixed rates start at 3.50 percent. The company vows to evaluate your entire financial situation and give you the lowest rate possible. You can also change your loan as your loan changes. You can refinance your loan, switch between the types of rates, change your payment dates and skip one payment a year with no penalty. Those who refinance through Earnest save $17, 936 on average.

LendKey

LendKey is arguably for those who have a shorter amount of time to repay their loans (or not as much money to pay back). They offer refinancing for private and federal loans for both undergraduate and graduate degrees. However, unlike the other two companies, they only offer repayment plans for five, 10 and 15 years. You can choose to pay on the interest only for the first four years of your repayment. You have to have a loan amount of at least $7,500 to pay off when applying to refinance through LendKey.

Variable and fixed rated through LendKey vary from 1.90 percent APR to 9.22 percent APR if you use the autopay option. They also offer unemployment protection like the other two, but LendKey offers the longest term of unemployment protection. The company offers up to 18 months protection. With interest rates starting at a lower annual percentage rate, many customers save a significant amount of money with LendKey.

Photo: Flickr: DonkeyHotey