There are many different types of student loans. One type is private student loans that do not originate from the government or directly from a bank.
Students who took out these types of loans usually have to spend years paying them back and end up spending thousands in interest charges.
If you find yourself in this situation, there’s good news: it’s possible to get rid of private student loans altogether.
If you’re currently spending thousands in interest charges each year on your private student loans, consider refinancing them. Refinancing will allow you to get a new loan with better rates and terms that are easier to handle.
You can use this money for just about anything, including bills, a new car or even college for your kids. While refinancing can make your life easier, it’s not always easy to find lenders who will offer you competitive rates.
Many companies have already shut down their student loan refinance programs, but there are still plenty of lenders that want to help you out. You just need to know where to look.
One way to find lenders that will refinance your private student loans is to look for companies on sites like LendEDU and Zippyloan.
These websites provide reviews of various companies and explain how long it takes them to process the refinancing applications they receive, as well as what kind of rates and terms they offer.
If you want to find the lowest rates and the best companies, look for those lenders who receive five stars on one of these websites.
Best Student Loan Rates in October 2021
Private student loans can be a blessing and a curse. On the one hand, they allow students and their parents to borrow an almost unlimited amount to cover the costs of private school without having to take out federal or state government loans.
And, unlike with federal loans, there is no income-based repayment plan; you either pay your loan as agreed or go into default.
On the other hand, those loans often come with high-interest rates and high origination fees, which can make it difficult to repay them as fast as you might like.
Meanwhile, because these private loans were meant to be used for private education expenses and not necessarily general living costs that credit cards and other lines of credit might cover, the borrowers lack some flexibility that other personal loan borrowers might have, such as the option to defer payments or renegotiate terms.
Fortunately, there are three ways you can restructure your private student loans with the help of an outside institution:
- refinancing, consolidation and
- student loan forgiveness.
Often times it’s a combination of these three methods that can help you lower your interest rate and get a fresh start.
For the sake of simplicity, we’re going to look at refinancing in more detail, as it’s usually easiest for people with high-interest private student loans to consolidate their debt into one place and then refinance that institution’s loans into a single, lower-interest loan at another financial institution.
If you’re looking to refinance your private student loans with the best deal possible, there are some reputable institutions that can help:
- First Republic
- Laurel Road
- Citizens Bank
- Darien Rowayton Bank
- Self Lender
The list of lenders has been compiled by looking at their rates on loans held directly by the bank or through refinancing platforms, which aim to bring borrowers and lenders together.
Banks with a hyperlink have been researched further, while others are listed based on reputable sources.
Now, let’s get one thing straight here: refinancing private student loans can be risky business.
Generally speaking, these are riskier loans because they are not backed by the government.
As a result, there is no standard repayment plan or time frame for how quickly you should pay back your debt or what your monthly payments should look like.
The burden of figuring out your repayment terms is on you, the borrower.
With that in mind, it’s up to you to determine which financial institution you want to work with and how long of a term for which you are willing to sign on.
Also, keep in mind that while lenders will usually let you lock in your interest rate for five years or so, they might step up the rate after that time period.
Finally, keep in mind that refinancing is not right for everyone.
If you plan on pursuing certain career paths (the public sector or non-profit work, for example) that require you to make consistent payments over a long period, refinancing may not be for you. Or, if your credit profile is not up to par with an FICO score over 700 or 750, then it might be tough to find the right lender as well.
With that in mind, though, there are many reasons to consider refinancing your private student loans:
- Lower interest rates
- Fixed repayment plans
- More flexible terms
- Lower monthly payments
- A single contact with one lender
Nearly two-thirds of all private student loans are held by borrowers between the ages of 20 and 39, who are also more likely to have other types of debt in their lives as well, such as credit card debt, a mortgage or consumer loans.
As a result, refinancing student loans offers many of the same benefits that other types of debt consolidation loans offer.
But since private student loans are less common than mortgages and car loans, borrowers will have to do some digging to find them in the first place.
How to Find Company to Refinance Private Student Loans
Here’s how to find private student loans:
#1. Browse private lenders online and target those who offer refinancing options
#2. Look for refinancing services that can help connect you with multiple lenders in one place
#3. Search through your state’s Department of Education website, which might work directly with a number of different lenders to provide more options
#4. Reach out to your current lender and see what refinancing options it may have for you.
Finally, don’t be afraid to ask around and do some comparison shopping before making a selection.
Just because you may want to refinance with the top 10 lenders listed above doesn’t mean they will all work for you–so shop around and do your research!
Best Private Student Loan Refinance Company 2021
Here are some best companies to refinance private student loan in 2021
CommonBond is considered as one of the best private student loan refinance companies in 2021, offering loans at lower rates with no origination fees.
It partners with alumni associations to help graduates find cheaper options when refinancing their student loans.
And it also offers assistance for borrowers who are unemployed through its unemployment protection program.
On the lending side, CommonBond is on top of its game too.
It has quickly made a name for itself by offering some of the lowest rates in the market and providing borrowers with some pretty generous repayment terms.
Because it’s not afraid to lose money when it comes to helping students get out of debt!
The company charges an origination fee of 1%, which is usually rolled into borrowers’ loans, but it charges no fees for late payments.
As long as borrowers stay on top of their bills, they should have nothing to worry about with CommonBond!
Sofi is another one of the best private student loan refinance companies of 2021 and is considered to be very much in the race with CommonBond.
SoFi offers some of the lowest rates around, but it also has a pretty good repayment program that allows borrowers to have their student loans forgiven after 20 years.
Like many other lenders, SoFi also works directly with employers who are willing to help their employees pay for schooling.
It offers a variety of repayment options, including the option to make extra payments at a discounted rate, and it also has a built-in unemployment protection program that can help students stay on top of their loans if they end up losing their job.
Earnest is another one of the best private student loan refinance companies in 2021.
The company can work with graduates who have had a high amount of debt relative to their earnings, giving them the option to pay off their loans ahead of schedule while still helping them lower their monthly bills by extending the length of their repayment term.
One thing that makes Earnest really stand out is its philosophy and work ethic.
The company believes in offering fair and transparent terms to everyone, especially since it can be a struggle for recent graduates to find jobs that can support their loans.
And if you do manage to land the right job, Earnest will reward you with $100 just for signing up!
LendKey is one of the best private student loan refinance companies in 2021 that works through credit unions and community banks to offer lower interest rates.
The company offers borrowers up to 5% off their current loans, which can really go a long way when you are trying to pay down your debt.
LendKey also has a great repayment program that saves borrowers money and actually allows them to pay back their loans faster than before.
To make its services even more accessible, the company has made it super simple for graduates who have more than one student loan to figure out how much they owe and what kind of term they need.
#5. Laurel Road
Laurel Road is one of the best private student loan refinance companies in 2021 with programs aimed at helping recent graduates pay down their debt. One thing that makes Laurel Road really stand out is its long-term repayment plans, which can help students save a lot of money on interest and pay down their principal faster than they ever could before.
Unlike other lenders, Laurel Road also has a program called Step Forward, which allows borrowers to make fixed monthly payments based on their income and not the amount they owe. So if you find yourself unable to make ends meet after graduating from college, this lender should be one of your top choices.
#6. Copper Branch
Copper Branch is one of the best private student loan refinance companies in 2021 that focuses on making things simple.
Unlike other lenders, Copper Branch doesn’t require graduates to fill out pages and pages of forms.
The company makes it relatively easy for students to get loans without having to jump through too many hoops.
And if you are a recent graduate in a creative field, Copper Branch can help you find a way to pay your debt without sacrificing your passion.
This company also works directly with employers and universities, which makes it relatively simple for prospective borrowers to be considered for assistance.
There are also no hidden fees or charges, so borrowers only have to worry about making their monthly payments
#7. Citizens Bank
Citizens Bank is one of the best private student loan refinance companies in 2021 that focuses on helping borrowers lower their monthly payments.
And since Citizens has a history of working with students, it can offer money for those who attend certain universities and colleges as well as those who work part-time or full-time to make ends meet.
Those who qualify for student loan refinancing through Citizens will be able to save on interest rates.
And if you are still in school, the company can offer students some fantastic discounts on things like cell phone plans and accessories, which can make life a lot easier while they are also trying to pay down their debt after graduating.
Do private student loans go away after 7 years?
It is a question many older students have asked themselves.
As they enter the job market and see loan balances rise, it can be hard to deal with rising interest rates on private loans alongside rising debt burdens. I
n addition, some lenders may refuse to refinance their student loans after an initial period of time has elapsed from when their first loan was taken out.
What many people do not realize, however, is that it is possible to refinance private student loans.
In fact, there are a number of lenders out there who will offer borrowers a new rate and repayment plan if their credit history warrants it.
A Guide to Refinance Private Student Loans
If you want to refinance your student loans while saving money, consider the top ten private student lenders mentioned above.
But for now, here’s the step-by-step guide you can take to start refinancing your private student loans:
#1. Figure in refinance rates
You can easily compare current offers from different companies by entering your details into their free calculators.
Use the lender’s online tools to figure out what monthly payment you would need to take on a refinancing loan, and try to estimate how much money you would save in the long run.
#2. Find the best lender to refinance with
You should compare lenders’ rates and repayment plans to see if they are viable for your situation.
Visit websites like www.lendorservice.org where you can find reviews of various companies, as well as scour financial forums online to read what other people have to say about their experiences with various companies.
#3. Find the right lender for you
There are a number of factors that go into choosing a company to refinance your loan with, and not all lenders may be able to accommodate your requests.
Lenders will require that borrowers have steady income and a good credit rating, for instance.
#4. Discuss the refinance process
Once you have chosen a company to refinance with, you can then sit down with an advisor to discuss different repayment options and interest rates.
Be sure to ask all questions that are on your mind, like how long it will take before refinancing is finished or what you can do if you receive a lower interest rate than expected after refinancing.
#5. Be prepared to present your case
If your financial history is not that great, it will be harder for lenders to justify giving you the best deal on refinancing.
You may need to ask friends or family members for co-signatures, or show other signs that you have a steady income and good credit rating.
#6. Don’t ignore the terms of your first loan
If you refinance a private student loan , be aware that not all lenders will let you pay off your old debt afterwards.
The refinanced rate might only apply to new loans, which could actually end up costing you more money in the long run.
#7. Know your refinancing options
Before you refinance a student loan, make sure that you will be able to handle making monthly repayments after interest rates change and other factors are taken into account.
#8. Read over all documents carefully
Take the time to read through all the terms of your contract, especially if you are taking on debt for a long period of time.
This way you will know exactly what you are getting into so that there are no surprises once it comes time to repay your loan.
#9. Stick to the repayment schedule
If you have refinanced a student loan, you might discover that it is harder to stay current on your debt than before.
Because of this, it will be essential for borrowers to stick to their repayment schedule in order to avoid penalties from the lender.
#10. Keep track of fees and savings
You have probably been told a million times by now not to neglect the fine print, but it is especially important to keep track of all fees and interest rates when you are refinancing a student loan.
You should even take photos or screenshots of things like your monthly repayment plan so that there is no confusion down the road.
The Bottom Line
Successful refinance can help save thousands! The process isn’t very complicated, but you should know all your options before making the leap.
Make sure that refinancing is the right decision for you by comparing lenders, doing research into your financial history, and finding out what repayment plans are available before committing to anything.
If you are looking for a student loan refinance company, perhaps try visiting The Student Loan Report.
They can connect you with some of the top lenders in the country. If you are looking to consolidate your Federal Loans, visit Federal Student Aid.
A student loan refinance is when a borrower takes out a new loan at current rates to pay off an old debt.
The goal is usually to reduce monthly payments or extend repayment terms.
This would let you reinvest the money that is freed up, but it could also lead to paying more in interest over time, which negates any savings.
A good credit rating, steady income, and low debt-to-income ratio are usually required for lenders to give borrowers a better deal on refinancing.
Federal student loans are those that were provided through the U.S. Department of Education, while private student loans were made by a bank or other company on the borrower’s behalf.
Private loans differ from federal ones in that they have higher interest rates and do not include some types of borrower protections like deferment and forbearance options.