Consumers refinance all types of debt – mortgage, credit cards, even car loans – so why not refinance your student loans? First, there hasn’t been a plethora of options for refinancing this unique debt, but now this is no longer the case. Second, there are protections inherent in federal loans that many don’t want to give up such as Public Service Loan Forgiveness or Income Based Repayment. But if you can afford your student loan payments and have a decent credit rating, refinancing may be just the ticket.
Many refinance offers include interest rates lower than what you’re likely paying now and can combine all your loans under one umbrella so you don’t have to keep track of multiple payments each month. Although the federal student loan program doesn’t offer any refinance offers, private lenders are stepping up and making competitive offers that may save you money on your college loans. Here are three programs that we’ve looked into and recommend:
Darien Rowayton Bank (DRB)
DRB is a community bank out of Connecticut that has a very interesting and positive story. Founded in 2006, DRB was one of the few banks that didn’t ask for a bail out during the banking crisis in the recent recession and has never lost a residential mortgage to foreclosure. They offer interest rates that are extremely competitive. Fixed rates are as low as 3.5% with electronic funds transfer and variable interest rates as low as 2.63% with EFT. If you have $70,000 of loans at 6.5%, a 10 year 4.5% loan from DRB will save you nearly $10,000. Fine print: There are no origination fees, no prepayment penalty and to use EFT to get the .25% discount, you’ll need a DRB checking account (no fee accounts are available with no minimum balance). Click here to find out more about refinancing your loans with DRB.
Social Finance, Inc (SoFi)
SoFi is a peer to peer lending program that has boomed over the last year by 800%. They have refinanced loans to grads of more than 550 universities and colleges. They currently have more than 10,000 borrowers and have issued more than $840 million in loans. SoFi offers great refinance rates to those with high credit scores that are earning plentiful bucks. Fixed interest rates are as low as 3.625% and variable interest rates are as low as 2.66%, both rates contingent on autopay. Average savings for those that refi with SoFi save about $12,000. Fine print: There are no origination fees, no application fees and no prepayment penalty. They refinance both private and federal student loans. If you use the link below, you can get a $100 welcome bonus. Click here to find out more about refinancing your loans with SoFi.
CommonBond is another peer to peer program that says their intent is to make education more accessible. They provide refinancing for both undergraduate and graduate loans for over 2,000 colleges and universities nationwide. Rates are as low as 1.94% with auto pay. You can consolidate undergraduate, graduate, and Parent PLUS loans and it’s easy to apply – you can find out in just seven minutes if you can get approved. Fine print: There are no origination fees and the lowest rates require EFT. Borrowers can refi both private and federal, with no maximum amount. An interesting feature is that the loans come with unemployment protection in case you lose your job. Click here to find out more about refinancing your loans with CommonBond.
No matter who your student loan lender is, how many loans you have, whether they’re federal, private, consolidated or refinanced, Tuition.io’s free student loan tool will allow you to keep track of your debt and optimize it to save money. Be sure to read our blog often for lots of money tips, student loan info and updates on legislation that affects your debt.