5 Best Student Loan Refinance Companies of August 2022
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Refinancing your student loans can help you pay off debt quicker and save you money in the long run. Refinance rates have been slowly rising from their historic lows in 2021, albeit somewhat unevenly across different terms, so it might be a good idea to act before they go up any further.
Read on to learn more about our top picks for best student loan refinancing companies of 2022, along with industry insights and the latest CARES Act information.
As of this writing, President Biden has extended the Covid forbearance pause on student loan payments four times, most recently until August 31, 2022. While there has been much speculation about whether Biden will go a step further and forgive or cancel a large portion, recent statements have made clear that there are no plans to forgive $50K in federal student loans, let alone all student loan debt.
Our Top Picks for the Best Student Loan Refinance Companies
- Credible – Best Student Loan Marketplace
- Splash Financial – Most Affordable Loan Payment Options for Medical Students
- PenFed – Best Credit Union
- Laurel Road – Best Student Loan Consolidation for Medical Students
- Earnest – Best for Customizing Loan Repayment
Best Student Loan Refinance Reviews
Why we chose it: We chose Credible as our best student loan marketplace because its prequalification tool allows borrowers to compare customized rates from multiple lenders after filling out a single application.
Pros
- Compare multiple lenders in one place
- Check if you qualify without a hard credit check
Cons
- Not itself a lender
- You must research each lender individually before applying
HIGHLIGHTS
- Minimum income requirements
- Varies by lender
- Minimum credit score
- Varies by lender
- Prepayment penalty
- Varies by lender
- Cosigner release
- Varies by lender, but several offer it
- Loan amount
- Varies by lender
- Loan types
- Private undergraduate, graduate and Parent PLUS
- Fees
- The marketplace does not charge you for its services
- Fixed interest rate
- 1.86%-9.73% APR
- Variable interest rate
- 1.86%-9.73% APR
Credible is an online marketplace for private student loans and student loan refinancing that provides personalized quotes from banks, fintech companies and state loan authorities such as Massachusetts Educational Financing Authority (MEFA) and Rhode Island Student Loan Authority (RISLA).
The marketplace offers student loan refinancing through undergraduate, graduate and Parent PLUS loans. While not all Credible partners may offer the lowest interest rates compared to other lenders on this list, the marketplace boasts:
- High approval rates
- Income-driven repayment plans (particular to RISLA)
- No partnerships with lenders that charge prepayment fees, application fees, or origination fees
Other Credible partner lenders include Advantage Education Loan, Brazos, Citizens Bank, College Ave, EdvestinU, ELFI, and PenFed.
Be aware that as a marketplace, Credible doesn’t list all terms and conditions of each lender — that’s why we recommend you do your own research to find out more about specific forbearance policies, discounts and unemployment protection.
Why we chose it: We chose Splash Financial as having the most affordable repayment options for medical students due to its expertise in medical school debt.
Pros
- One of the few companies that offer the option of refinancing with your spouse
- Check if you qualify without a hard credit pull
Cons
- Not a lender
- You must research each lender individually before applying
HIGHLIGHTS
- Minimum income requirements
- Varies by lender
- Minimum credit score
- 640
- Prepayment penalty
- Varies by lender
- Cosigner release
- Varies by lender
- Loan amount
- Varies by lender, minimum of $5K
- Loan types
- Undergraduate, healthcare graduate and Parent PLUS
- Fees
- No origination and application fees
- Fixed interest rate
- 2.59%-8.44% APR
- Variable interest rate
- 1.74%-11.05% APR
Splash Financial is an online marketplace that partners with loan servicers to provide medical students with the lowest student loan refinance rates and affordable repayment options. It also partners with lenders to refinance other student loans. While a marketplace, Splash Financial won’t show you multiple offers from the banks and credit unions in its network, and you’ll only know who it considers the best fit after filling out a full application.
Terms range from 5 to 20 years for fixed-rate loans and 25 years for variable interest loans. While there is no maximum loan amount, the minimum needed to refinance is $5,000.
For medical and dental residents:
- Refinancing medical school loans with Splash could help you lower payments to as little as $100 a month for the duration of your residency, plus an additional six months after the end of the residency or fellowship.
- Students with associate degrees in specific medical fields are allowed to refinance up to a maximum of $50,000 with Splash.
The company offers an easy loan application and pre-qualification process for undergraduate and Parent PLUS loans. Spouses can benefit from student loan consolidation and refinance their loans together, as the company offers the option to “take over” your spouse’s loans. Parent loans can also be transferred to the child.
Why we chose it: We chose PenFed as the best credit union because of its spousal loan options and low interest rates.
Pros
- Married borrowers can refinance their student loans into a single loan
- Refinance parent PLUS loans under your name
- Deposit $5 to open a membership account
Cons
- Must become a PenFed member to apply
HIGHLIGHTS
- Minimum income requirements
- Ranges from $42,000 to $50,000, depending on the loan amount and whether there is a cosigner
- Minimum credit score
- Unavailable
- Prepayment penalty
- None
- Cosigner release
- After 1 year of consecutive on-time payments
- Loan amount
- Up to $300,000
- Loan types
- Graduate, undergraduate and Parent PLUS
- Fees
- None
- Fixed interest rate
- 5.49% – 7.68%
- Variable interest rate
- Unavailable
Pentagon Federal Credit Union is the second-largest credit union in the nation that offers student loan refinancing. PenFed’s student loan products are provided exclusively by online lender Purefy.
The company offers fixed- and variable-rate options for borrowers — students, parents and couples — refinancing up to $300,000 in private or federal student loan debt, with loan payment terms ranging from five to 15 years.
With PenFed, married couples can file a loan application to refinance their student loans together. The spouse with the highest degree should apply as the primary applicant to ensure the best rates. Unlike traditional refinancing, only one person needs to have completed a bachelor’s degree or higher to refinance through PenFed’s Couple Loan.
The annual income requirement ranges from $42,000 to $50,000, depending on the loan amount and whether there is a cosigner or not. As a member of PenFed, you will gain access to member rate discounts, an advice center and financial offers.
Why we chose it: We chose Laurel Road as the best student loan consolidation option for medical students because of its reduced student loan refinancing rates for optometrists, nurses, dentists, physicians, or physician’s assistants.
Pros
- Refinances Parent PLUS loans
- No application, origination or disbursement fees
- Can choose a term under 20 years
Cons
- Shorter grace period (6 months) when compared to other lenders
- Loans are designed for people in the healthcare field, so not all graduate programs qualify
HIGHLIGHTS
- Minimum income requirements
- Varies per each applicant’s financial profile.None
- Minimum credit score
- 640, 650 or 660 depending on education level
- Prepayment penalty
- None
- Cosigner release
- No, you must reapply for a loan to remove a cosigner
- Loan amount
- Min: $5,000 for bachelor’s degree and higher. Max: $50,000 for all non-parent PLUS refinance loans
- Loan types
- Undergraduate, healthcare graduate and Parent PLUS
- Fees
- None
- Fixed interest rate
- 3.24%-6.05%APR
- Variable interest rate
- 1.64% – 5.95%
Laurel Road’s medical school loan program is available for medical residents or fellows who want to consolidate their federal and private loans into a single loan payment.
Interest won’t compound during your residency, and the company allows you to reduce payments to as little as $100 per month for up to four years before you start standard repayments.
Your eligibility requirements as a resident are based on your:
- Credit profile
- Monthly debt payments
- Income projections at the end of your training period
Laurel Road offers a refinancing option for up to $50,000 for medical residents with associate degrees in eligible healthcare fields. The $50,000 maximum will not apply to parents borrowing for children pursuing an associate degree.
We liked that the lender offers a handy calculator so that prospective borrowers can see what their potential savings might be like with a refinance.
Why we chose it: We chose Earnest as best for customizing loan repayment because of its interesting approach to underwriting based on earning potential and its precision pricing model.
Pros
- Customizable payments and loan terms
- Option to skip one payment every 12 months
- Autopay discounts are available
- Can refinance your full student loan amount
Cons
- Doesn’t allow cosigners
- Not available for citizens of Kentucky and Nevada
HIGHLIGHTS
- Minimum income requirements
- Varies per each applicant’s financial profile. The lender currently doesn’t accept cosigners
- Minimum credit score
- 700
- Prepayment penalty
- None
- Cosigner release
- Unavailable
- Loan amount
- $5,000-$500,000
- Loan types
- Undergraduate, graduate and Parent PLUS
- Fees
- None
- Fixed interest rate
- 3.24%- 7.99% APR
- Variable interest rate
- 1.74%-7.99% APR
Backed by student loan giant Navient, Earnest offers multiple loan repayment options and refinance loans for students and parents at competitive rates. The company also features a unique underwriting approach, which factors your earning potential to determine your interest rate and payments. Earning potential is based on your degree, your history of on-time payments and your credit score.
Earnest also offers a “precision pricing” option, which:
- Allows you to choose a loan repayment term based on your ideal monthly payment amount
- Offers term lengths at 1 to 3-month intervals between 5 to 20 years
- Benefits recent graduates or borrowers that may not have sufficient credit history to qualify for refinancing elsewhere
To refinance your student loan through Earnest, you must have a minimum loan balance of $5,000, or $10,000 if you reside in California. The company states that once you are approved, you are automatically approved for your entire loan amount, but you can choose to refinance less.
Other student loan refinance companies we considered
Navy Federal Credit Union
HIGHLIGHTS
- Minimum income requirement
- Individual: 21 months or more of credit history and a monthly income of at least $2,000. Cosigner: Borrower must have a minimum monthly income of $1,000, and the cosigner must have a minimum monthly income of $2,000
- Minimum credit score
- Unavailable
- Prepayment penalty
- No prepayment penalties
- Cosigner release
- Available after 12 consecutive, on-time principal and interest payments
- Loan amount
- $7,500-$125,000 for undergraduate debt. $7,500-$175,000 for graduate or combined debt
- Loan types
- Undergraduate, graduate and Parent PLUS
- Fees
- No application or origination fees
- Fixed interest rate
- Starting at 2.34%
- Variable interest rate
- Starting at 2.23%
Navy Federal is the largest credit union in the world and specializes in banking and financial services for members of the military. Students with any type of student loan with Navy Federal are eligible to use the Career Assistance Program, an online job training tool that provides tips on interviewing, resume building and more. Parents that have taken out loans for multiple children can refinance and benefit from student loan consolidation.
Why it didn’t make the cut:
- Limited membership: The credit union only services members of the military or those who have family or household members in the armed forces.
Citizens Bank
HIGHLIGHTS
- Minimum income requirements
- Unavailable
- Minimum credit score
- Unavailable
- Prepayment penalty
- No prepayment penalties
- Cosigner release
- May be requested after 36 consecutive on-time principal payments on principal and interest
- Loan amount
- Minimum of $10,000. Maximum of $300,000 (Undergraduate degree), $500,000 (Graduate degree) and $750,000 (Professional degree)
- Loan types
- Undergraduate, graduate and Parent PLUS
- Fees
- No application or origination fees
- Fixed interest rate
- Starting at 3.79%
- Variable interest rate
- Starting at 1.86%
Citizens Bank combines the stability of a traditional bank with the flexibility of online lending and offers refinancing options for both students and parents.
Loan refinancing is available to permanent resident aliens and non-U.S. citizens (with a qualified cosigner), something that most other loan servicers don’t offer.
Why it didn’t make the cut:
- Citizens Bank has a history of complaints. This eventually resulted in regulatory action by the CFPB in 2015. The issue seems to have improved within the past few years, as there are currently only 43 complaints against the company’s student loan refinance products at this time.
SoFi
HIGHLIGHTS
- Minimum income requirements
- Does not disclose
- Minimum credit score
- Does not disclose
- Prepayment penalty
- None, as well as no late payment charges.
- Cosigner release
- May be requested after the student has graduated and completed 12 on-time payments, among other requirements
- Loan amount
- $5,000 up to your total outstanding loan balance
- Loan types
- Undergraduate, graduate and Parent PLUS
- Fees
- No application, origination or disbursement fee
- Fixed interest rate
- Starting at 3.49%
- Variable interest rate
- Starting at 1.74%
SoFi is a leading online loan servicer that offers student loan consolidation and refinancing for undergraduate, graduate, medical student and Parent Plus loans.
Member perks include career coaching, free access to a college cost comparison tool, free access to personalized financial planning advice and a referral program that pays you and the person you referred $300 for refinancing with SoFi.
Why it didn’t make the cut:
- While SoFi offers competitive rates and provides members with various cost-free benefits, the lender barely missed making our list of top student loan refinance servicers. It currently has 53 complaints against it with CFPB, mainly relating to its loan process.
Student Loan Refinance Guide
In this guide, you will find information on what refinancing your student loans entails, when the best time to refinance is and what you need to qualify.
Table of Contents:
How does refinancing student loans work?
When you refinance your student loan you are replacing your current loan with a new loan with new terms from a private lender. Generally, borrowers refinance student loans to extend their repayment period, obtain a low interest rate (and therefore lower monthly payments) or consolidate multiple student loans into one single payment.
You can only refinance student loans through a private lender, not the federal government. If you have federal student loans, keep in mind that you will be giving up federal benefits that come with government loans such as student loan forgiveness programs and certain loan repayment programs should you choose to refinance. If your student loan is from a private lender you can refinance with your current lender or choose a different lender.
When to refinance student loans
With interest rates near historic lows but slowly trending upwards, refinancing your student loans — whether federal or private — can save you money by replacing your existing education debt with a new loan under a private lender.
Be aware that refinancing a federal loan means losing valuable benefits and protections, such as income-based loan repayment plans, public service loan forgiveness, interest subsidies and student loan tax deductions.
Take a look at the following pros and cons to determine if refinancing your student loan is the right choice:
Pros
- Take advantage of market fluctuations to reduce your rate
- Shorten your loan repayment term
- Increase or lower your monthly payment
- Consolidate federal and private student loans and have a single monthly payment
- Option to remove your cosigner
- Multiple repayment terms are available, often 5 to 20-years
Cons
- No federal repayment protections
- No federal student loan forgiveness
- Subject to the private lender’s repayment terms
- No flexibility to alter the repayment plan without refinancing
- No income-based repayment option
- Irreversible: private loans can’t be converted back to federal loans
How to refinance student loans
Check your credit
Student loan refinance lenders will take into account your creditworthiness. Generally, borrowers with credit scores in the high 600s, typically around 650 to 680, are more likely to qualify for a refinance loan.
If you have a low score or bad credit, a good first step is to check your credit reports for any incorrect information that may be affecting your score. By recognizing errors early on, you can remove them from your credit history and work to improve your financial situation.
Consider the types of loans you have
Refinancing a federal loan means you lose exclusive benefits provided by the U.S. Department of Education, including public service loan forgiveness (PSLF), income-driven repayment plans, forbearance options and deferment. Private student loans generally have a limited disaster or emergency forbearance period compared to federal loans.
Shop around
When comparing refinancing lenders, look at the credit score and annual income requirements, the annual percentage rate (APR) offered and debt-to-income ratio (DTI) requirements. Take the time to check the lender’s history with customer complaints or whether they’ve had any recent lawsuits related to their student loan products within the last 5 years.
Evaluate cosigner release options
Some private lenders may offer cosigner release options if the primary borrower meets specific repayment qualifying criteria. With a cosigner release, the cosigner’s credit will be cleared of debt, but the loan will remain in their credit history.
Research lender’s financial hardship relief options
Some online lenders offer student loan unemployment deferment and forbearance, relief options that allow you to temporarily pause loan payments until you get back on your feet. A typical forbearance period with a private lender can be two to three months.
To learn more, check out our full guide on how to refinance student loans.
Student loan refinance application requirements
A successful application process depends on the following:
Good credit
Most lenders require credit scores above 650, though you’ll need a higher score to qualify for the lowest advertised rates. If your credit is too low or you have a short credit history, you’ll likely have to apply with a cosigner that has excellent credit and a stable income.
Proof of Income
Stable annual income is essential. Lenders will evaluate your debt-to-income ratio (DTI), meaning the percentage of your gross income that goes toward paying debts each month. Most companies require you to have a low DTI to qualify, but some may accept written job offers as sufficient evidence.
Cosigner
Applicants with insufficient credit history, low income or a low credit score will benefit from a cosigner. A cosigner can be a parent or relative that applies for the loan with you and takes on the responsibility of paying it back if you can’t. Cosigners must have sufficient income and strong credit.
College degree
A college degree isn’t always necessary to refinance your student loans, but having a degree gives you more options. Most lenders require a bachelor’s degree to qualify for refinancing, and a few accept borrowers with associate degrees.
U.S. citizenship or permanent residency status
Most, if not all, lenders require you to be a U.S. citizen or permanent resident to be eligible to refinance your student loans. If your student loans are foreign, it’s recommended that you build sufficient credit in the United States to qualify for refinancing.
Student loan refinancing vs. Student loan consolidation
One of the benefits of refinancing through a private student loan lender is that borrowers can consolidate multiple loans into one loan and have a single monthly payment under one servicer. Here are the key differences between student loan consolidation and refinance:
| Private Loan Refinance | Direct Consolidation Loans |
| Replaces one or more existing loans — federal or private — with a new private loan. | Combines your existing federal student loans into one federal student loan. |
| Available for federal and private loans, depending on the lender. | Available for federal student loans only. |
| Interest rates are determined by your credit history and potential market trends. This may result in a lower interest rate. | Your new interest rate will be the result of the weighted average of the interest rates on the loans you’re consolidating, so this option does not reduce the amount of interest you’re paying each month. |
| Credit history will be verified. | Does not require a credit check for approval. |
| Fixed- or variable-interest-rate loans. | Can consolidate variable rate loans into fixed-rate loans. |
| Multiple repayment terms are available, often 5 to 20 years. | Consolidation loans offer several repayment options besides the standard 10-year repayment plan and can extend the term of the loan by 12 to 30 years. |
| Parent PLUS loans can be refinanced under the adult child’s name, relieving parents of debt. | Parent Plus loans cannot be consolidated under the adult child’s name. |
| You lose all benefits associated with federal student loans. | You retain all benefits and protections available to federal student loans. |
Student Loan Refinance and COVID-19
CARES Act
The Biden administration announced a further extension on the current suspension of federal student loan payments, interest and collections to August 31, 2022. That relief also applies to defaulted loans, as collections and garnishments have been suspended until that date.
Student loan servicers’ COVID-19 response
| PenFed |
| • Forbearance or adjusted loan repayment plan for up to 6 months for those who qualify • The option to file a COVID-19 Hardship Application for additional support |
| For more information, go to PenFed’s Financial Hardship Center. |
| Laurel Road |
| • Forbearance of 3 monthly payments • The option to request an additional 3-month forbearance if you are still unable to meet your payments. To qualify for these additional 3 months your account must have been current before the first COVID-19 forbearance. |
| For more information, please refer to the lender’s Coronavirus Response page. |
| Splash Financial |
| • Lower rates in response to the economic crisis |
| For more information, please refer to the lender’s CARES Act Update. |
| Splash Financial encourages clients to reach out directly at (800) 349-3938 so they can negotiate accommodations like forbearance or waiving fees. |
| For more information, please refer to the lender’s CARES Act Update. |
| Earnest |
| • Short-term forbearance, which will make eligible loans current and postpone payments for at least a month. • Coronavirus national emergency forbearance, which allows qualified customers up to three months of delayed payments. • Short-term interest-only program that allows clients to make lower (interest only) payments for up to 90 days. |
| For more information, please refer to the lender’s guide COVID-19: What You Need To Know. |
| Navy Federal Credit Union |
| Eligible members have access to: • Loan extensions • Deferred payments • credit card line increases • Student loan forbearance through LendKey • Overdraft protection, fee-free transfers • Penalty-free certificate withdrawals. |
| The company encourages borrowers to contact their Student Loan Center at 1-877-304-9302 for more information. |
| For more information, please consult the lender’s Pandemic Relief FAQs section.. |
| Citizens Bank |
| • Three-month emergency loan forbearance. Interest will still accrue. • The option to request two additional three-month forbearance periods, for a total of nine months. • All late fees are waived |
| For more information, please refer to the lender’s CARES Act and student loans guide. |
| SoFi |
| • Payment deferral. • Unemployment protection • The option to request a forbearance period for up to 12 months in 3-month increments (interest will still accrue, and the life of the loan will extend). |
| For more information, go to the lender’s COVID-19 Financial Guide. |
Credible is excluded from this section because it’s a loan marketplace and does not issue loans. As it does not have its own COVID-19 policy in place, we recommend you refer to the specific loan servicer’s platforms for further information.
Latest News on Student Loan Refinance
As the deadline on the current student loan repayment moratorium approaches, the question on everyone’s minds is: Will Biden Push Back Student Loan Payments Again? Some industry experts believe an extension is very likely, but borrowers will have to wait till the end of August for an official announcement.
Refinancing student loans — especially when interest rates drop — seems savvy but it may not make financial sense for many. How To Refinance Student Loans lists the benefits and drawbacks of refinancing, what it means for federal borrowers and walks readers through the application process.
As inflation skyrockets, some argue that massive student debt relief will worsen it. However, according to recent research, economists and financial experts, this concern is misguided and distracts from more important obstacles regarding debt forgiveness. Read what experts had to say about inflation and student debt cancellation in Would Student Loan Forgiveness Make Inflation Even Worse?
Best student loan refinance FAQ
Can you refinance federal student loans?
Yes, even though federal loans can be consolidated, you can choose to refinance them instead. However, note that you will lose federal student loan benefits, including repayment options.
How to refinance a student loan?
First, decide if refinancing is the right option for you, as opting to refinance your federal loan will eliminate various federal loan benefits, including low interest rates, repayment grace periods and deferment/forbearance options. Once you’ve made up your mind, you can shop for rates online and pick the best offer for you.
How often can you refinance student loans?
You can refinance your student loan as many times as you want. Student loans typically don’t carry any origination or prepayment fees. If you’ve already refinanced your student loan but have improved your credit score or found a better rate, you can refinance again.
Why refinance student loans?
Refinancing your federal student loan isn’t the best option for everyone. Federal loans usually have favorable terms and benefits you would lose by refinancing with a private lender. Before opting to refinance, look into the benefits of consolidating your federal student loans. Refinancing can be worth it only if it considerably lowers your interest rate and saves you money in the long run.
What is the best student loan refinance company?
The simple answer is that the best student loan refinance company for you is just that: the best for your situation. If you want a customizable payment option, maybe Splash Financial may offer better terms. In any case our best student loan refinance list can help narrow down your options.
How We Chose the Best Student Loan Refinance Companies
Loan refinance selection
Some lenders didn’t make our cut because they didn’t offer a full range of refinancing options, such as for ParentPLUS student loans, which was a non-negotiable point in our criteria.
Payment options and fees
We favored companies with flexible payback policies, such as cosigner release and financial hardship relief options for qualified applicants. We also looked for financial institutions that offered refinance loans without charging application or origination fees or even prepayment penalties. Additionally, we favored lenders who offered interest rate reductions for signing up for automatic payments, or autopay programs.
Customer experience
When we researched each company on our shortlist, it was important for us to evaluate whether lenders had an inordinate number of complaints or any ongoing actions with regulatory agencies such as the Consumer Finance Protection Bureau.
Summary of Money’s Best Student Loan Refinance Companies of August 2022
- Credible – Best Student Loan Marketplace
- Splash Financial – Most Affordable Loan Payment Options for Medical Students
- PenFed – Best Credit Union
- Laurel Road – Best Student Loan Consolidation for Medical Students
- Earnest – Best for Customizing Loan Repayment
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