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Best Banks For Refinancing Student Loans

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Best Banks For Refinancing Student Loans

If you have high-interest student loans, student loan refinancing can be an excellent way to lower your rates, reduce your payments and save money. Student loan refinancing is offered by a few types of lenders, including banks, credit unions and online lenders.

There are some advantages to refinancing your education debt with a bank rather than an online lender, particularly if you have an existing relationship with the bank. For example, you could qualify for valuable discounts and get more personalized assistance than you would elsewhere.

Best Banks to Refinance Student Loans

We researched major banks that offer student loan refinancing and evaluated them based on their rates, repayment terms and borrower benefits. Based on that information, we selected the following as the best banks to refinance student loans:

Citizens

Most refinancing lenders require borrowers to have completed their degrees before they’re eligible for a loan. But with Citizens, you can qualify for refinancing even if you left school before finishing your program.

Citizens offers high loan limits, which may be particularly useful for borrowers with graduate or professional degrees. Its rates are competitive, and borrowers who currently bank with Citizens can take advantage of a rate discount for existing customers. Co-signer release is available after making 36 months of qualifying payments and meeting the lender’s other criteria.

  • Eligibility requirements: To qualify for a loan, you must have at least $10,000 in outstanding student loan debt and must be a U.S. citizen, permanent resident or resident alien with a valid Social Security number. You must also have relatively good credit and an annual income of at least $24,000. If you don’t have a bachelor’s degree, you must make at least 12 qualifying monthly payments toward your debt before you’re eligible for refinancing.
  • Available terms: You can repay your loan over 5, 7, 10, 15 or 20 years.
  • Rates: Citizens offers both fixed and variable interest rates. Variable APRs range from 1.99% to 8.47%, while fixed APRs range from 3.94% to 8.72%. However, borrowers can reduce their rates by up to 0.50% if they enroll in autopay and qualify for a loyalty discount.
  • Loan amounts: Citizens’s minimum loan amount is $10,000, and it allows borrowers to refinance up to $300,000 if they have a bachelor’s degree. Those with graduate degrees can refinance up to $500,000 in outstanding loans, while professional degree borrowers can refinance up to $750,000.

Discover

Discover charges no fees on its refinance loans, so you won’t pay any origination fees, application fees or even late fees. The bank also offers multiple hardship and deferment programs, including options to temporarily reduce your interest rate or monthly payments if you have trouble keeping up with your loans.

Borrowers can refinance their loans while they’re still in school, which is an opportunity that most lenders don’t offer. However, private parent loans are ineligible for refinancing. In addition, Discover doesn’t offer co-signer release, so if you refinance with a co-signer, they will be listed on the loan until it’s paid off—unless you refinance again on your own.

  • Eligibility requirements: You must be a U.S. citizen or permanent resident with a U.S.-based address, pass a credit check and be the primary borrower on the loans you want to refinance. A degree isn’t required, and borrowers can refinance while they’re still in school. Private parent loans are not eligible for refinancing.
  • Available terms: There are only two repayment terms to choose from—10 or 20 years.
  • Rates: Discover has both variable- and fixed-rate loans. Its variable loans have APRs from 2.49% to 6.49%, while fixed APRs range from 3.49% to 7.99%. Borrowers can lower their rate by 0.25% by enrolling in automatic payments.
  • Loan amounts: The minimum loan amount is $5,000, and the maximum for most borrowers is  $150,000. However, there may be higher limits for specific fields of study.

Laurel Road

Laurel Road began as an online student loan lender in 2013 but began adding banking services after it was acquired in 2019 by KeyBank.

For medical school graduates and others with large amounts of student loan debt, Laurel Road allows borrowers to refinance up to 100% of their outstanding loans. However, those with associate degrees face more limitations—only borrowers in specific healthcare professions are eligible to refinance with less than a four-year degree.

Laurel Road’s interest rates are competitive compared to other banks on this list, and the company also offers the largest amount in interest rate discounts. To get up to 0.55% off your rate, you’ll need to enroll in autopay and open a Laurel Road savings account that meets minimum deposit criteria.

  • Eligibility requirements: You must be a U.S. citizen or permanent resident. Laurel Road’s refinancing program is limited to individuals with four-year degrees or higher, though borrowers that have associate degrees in certain professions—including dental hygiene, nursing and radiation therapy—are also eligible. Parent borrowers can also refinance federal parent PLUS loans or private parent loans through Laurel Road.
  • Available terms: Choose between loan terms of 5, 7, 10, 15 and 20 years.
  • Rates: Laurel Road offers variable and fixed interest rates on its refinancing options. Variable-rate loans range from 1.89% to 6.20% APR, and fixed-rate loans range from 3.49% to 6.30% APR. Borrowers can qualify for a rate discount of up to 0.30% if they open a Laurel Road savings account when they submit their refinancing application, in addition to a 0.25% discount for enrolling in autopay.
  • Loan amounts: The minimum amount for a Laurel Road refinancing loan is $5,000. In general, Laurel Road allows borrowers to refinance up to 100% of their outstanding loan amount. Borrowers with associate degrees, however, have a maximum refinancing amount of $50,000.

SoFi

Similar to Laurel Road, SoFi got its start as an online student loan lender in 2011 but has since added banking, investing and insurance products to its roster. Today, the company is one of the few lenders that allows parent borrowers to transfer their loans to their children, removing their obligation for expensive parent PLUS loans. It also allows borrowers to refinance up to 100% of the existing student debt, making it an attractive option for those with high balances.

While you won’t get a loyalty discount if you’re an existing SoFi customer, the company sets itself apart with its extensive member benefits. Borrowers have access to free financial planning, career coaching, online and in-person events, and a rewards program that you can use to help pay off your debts.

  • Eligibility requirements: To qualify for refinancing through SoFi, you must be a U.S. citizen, permanent resident or non-permanent resident alien. You also must have graduated with at least an associate degree or higher. Parent borrowers are also eligible for refinancing, and those with parent loans can even transfer the loans solely into their child’s name (with their child’s consent).
  • Available terms: SoFi provides loan terms of 5, 7, 10, 15 and 20 years.
  • Rates: Like other lenders, SoFi offers both variable and fixed interest rates. Variable APRs range from 1.74% to 7.99%, and fixed APRs range from 3.49% to 7.99%. The lowest advertised rates include a 0.25% autopay discount.
  • Loan amounts: Borrowers can refinance as little as $5,000 up to the total amount of your outstanding student loans.

PNC

PNC offers one of the highest autopay discounts we’ve seen, and it allows borrowers to refinance even if they didn’t graduate with a four-year degree. However, PNC offers relatively low loan maximums compared to others on this list, and the amount you can borrow depends on your education level.

Co-signer release is available after making 48 monthly payments on time and meeting PNC’s other requirements. While not all lenders offer co-signer release, PNC’s policy requires more payments than most of those that do.

  • Eligibility requirements: To qualify for a loan, you must be a U.S. citizen or permanent resident and have at least two years of steady income or employment history. If you didn’t graduate or have an associate degree, you must make at least 24 consecutive, on-time payments on at least one of your student loans before you’re eligible for refinancing.
  • Available terms: Repayment terms range from 5, 10 or 15 years. Those with undergrad or graduate degrees may be eligible for 20-year terms if you refinance at least $75,000.
  • Rates: PNC has both fixed- and variable-rate loans. Fixed APRS range from 2.59% to 7.19%, and variable APRS range from 2.14% to 6.64%. The lowest advertised rates include a 0.50% discount for enrolling in autopay.
  • Loan amounts: The minimum loan amount is $10,000, and the maximum depends on your degree level. Borrowers who didn’t graduate are limited to $25,000. If you did graduate, you can refinance up to $75,000 with an associate degree, up to $175,000 with an undergraduate degree and up to $200,000 with a graduate degree.

Pros and Cons of Refinancing Student Loans with a Bank

With so many ways to borrow, including online lenders, does it make sense to refinance your student loans with a bank? When comparing types of refinance lenders, consider these pros and cons:

Pros

  • Potential discounts: If you refinance your student loans with a bank, you may qualify for higher interest rate discounts than you get elsewhere. Some banks offer additional discounts for customers that have accounts with them, helping you save more money over time. For example, Citizens offers a 0.25% loyalty discount if you have a checking, savings, auto loan, mortgage or credit card with them, which can be combined with an autopay discount to cut your rate by 0.50%.
  • Discounts on other products: When you’re a customer of a particular bank, you may be eligible for other discounts later on. For example, if you refinance your loans with SoFi and later apply for a personal loan, you can qualify for a 0.125% rate discount. You could also get a $500 loan processing fee discount on your first mortgage through SoFi.
  • Personalized customer service: If you opt for a bank with branches near you, you can visit a branch for in-person assistance.

Cons

  • Many banks don’t offer refinancing: With an ever-changing student loan landscape, most banks stay away from student loans and student loan refinancing. Major national banks like Chase, Bank of America and Citibank don’t offer student loan refinancing, and Wells Fargo ended its student loan business in 2021.
  • May not have the best rates or terms: In some cases, online lenders may offer more competitive rates than banks since they often have less overhead costs. It’s always a good idea to shop around and compare rates before choosing a lender.
  • Might not be your loan servicer: Banks that offer student loan refinancing usually don’t service the loans themselves; instead, they partner with third-party companies to act as the loan servicer. For example, Firstmark Services manages Citizens’ loans, and Laurel Road’s loans are serviced by the Missouri Higher Education Loan Authority (MOHELA).

How to Apply for Student Loan Refinancing

Most banks that offer student loan refinancing provide an online application process. If you have a co-signer, they can also apply online, and you can typically get a decision quickly.

To speed up the process, make sure you have the following information on hand:

  • Your Social Security number
  • Income and employment information
  • Current loan balance
  • Recent loan statement from each loan servicer

Methodology

We reviewed the top banks that offer student loan refinancing and assessed each company based on the available interest rates, fees, loan terms, loan amounts, rate discounts, eligibility requirements and other added perks. Specific characteristics taken into consideration within each category include loyalty and autopay discounts, co-signer release policies, origination fees and other factors.

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