Student Loan Refinancing

If you have any private student loans, one of the best ways to save money on them is by refinancing your student loans. I have refinanced my loans not just once, but twice through two different banks. I was able to bring my interest rate down from 7.92% to it’s current 5.49%. Even if you are only able to save a few hundred dollars, I think it is worth the short amount of time to fill out an application. This two percent drop in interest will save me thousands of dollars over the life of these loans. I’m hoping to be able to share some banks and servicers that you can use to get student loan refinancing. This list will make it easier for those looking to do the same thing that I did – save money on your private student loans through refinancing!

Here’s a list of bank and loan providers and information about the loans they provide, so that hopefully you can make a more informed decision when looking to refinance .

Social Finance (SoFi)

Rates:

Extra Information:

  • Max Variable Rate is 8.95% or 9.95% depending on loan length
  • Career services program if you are looking for a job or become unemployed
  • Entrepreneur Program that offers 6 months of deferment

Citizens Bank

Rates:

Extra Information:

  • Max Variable Rate is unlimited
  • 0.25% discount offered if you have a Checking or Savings account with Citizens already
  • If you have a co-signer, they can be released from the loan after 36 payments in a row (3 years)

Darien Rowayton Bank

Rates:

Extra Information:

  • Max variable rate of 9% (5,10,15 year loans) or 18% (20 year loan)
  • 0.25% discount is only offered to those with a DRB Checking account

Earnest

Rates:

Extra Information:

  • Max variable rates 8.95%, 9.95%, or 11.95% depending on length of the loan
  • Personal experience: weight given to investments, savings accounts, checking accounts, etc
  • Sliding scale to customize an increased payment and a lower interest rate

Common Bond

Rates:

Extra Information:

  • Max variable rate is unlimited
  • These loans are only offered to those holding graduate, professional, or doctorate degrees
  • Networking opportunities with fellow graduates in the Common Bond network
  • For every degree fully funded on the Common Bond platform, they fund the education of a student in need abroad for a full year

Wells Fargo

Rates:

Extra Information:

  • Max variable rate is unlimited
  • 0.25% discount applied if you have a Wells Fargo checking account
  • 0.25% discount applied if you already had a loan with Wells Fargo
  • 0.50% discount applied if you have a Wells Fargo PMA account

Who should try to get student loan refinancing:

  • If you have any private student loans with an interest rate of 5.5% or higher
  • If you have a job with a decent income or a co-signer that has one. If you parents already co-signed on your loans this will only help both of you!
  • If you had a decent credit score or a co-signer that has one

Who should not try to get student loan refinancing:

  • If you only have government student loans, these offer additional protections and payment options you don’t want to lose
  • If your private student loan already has an interest rate lower than 5.5%
  • If you have not secured a job yet – work on that first! Most of these companies will deny you without a steady income and a poor credit score (unfortunately)

If you find any other banks or student loan providers that start offering a competitive interest rate for student loan refinancing, leave a comment or send me a note and I’ll add them to this list! Please always read the fine print and the terms carefully before accepting any of these loans. Make sure you are selecting the right term and interest rate for you, so that you don’t end up paying more over the life of your loan.

Article Updated: 05/10/2015

photo credit: Thank You Mommy and Daddy! via photopin (license)

10 comments

  1. I think one thing that should be mentioned is the amount of time it will take to pay off your student loans. If for example you did the math and said you could pay them off in 2 years would you still take the 1.5% refinance difference, would it be worth the time if for example it saves you $200? Or better question if you know that your loan is at 7.5% does that make you pay it off a year earlier because you dislike it so much? This assuming that the 6% rate makes you feel like you saved yourself money and relax a little. Just some food for thought, the math says yes does the emotion agree?

    1. You make a good point, but the application process itself is actually really simple and most of it is done online now. I think it’s worth the 15-30 minute effort to at least put in the application and see the interest rate that you are approved for. You can then make a decision from there if it’s worth it to continue.

      I do agree that for some it may be better to keep as is to stay on target, but I would also hope someone that focused would continue to stay focused and save a few hundred dollars! There is no one size fits all when it comes making decisions like this, though.

  2. Wow!! Your article is very informative. My student loans interest with an interest rate is 6%. Can I try to get student loan refinancing?

    1. I think it’s worth a shot. You will get a hard pull on your credit report that will lower your score 10-15 points temporarily, but if you aren’t taking out a mortgage or car loan in the near future there’s no issue with it.

      At 6% you should probably try refinancing with SoFi or Darien Rowayton Bank as you have the highest chance of receiving a lower interest rate. You will need a good credit score and a source of income as well.

      But if you can drop them from 6% to 5% it will save you a few hundred dollars in the long run depending on your loan balances.

  3. Argh, I’ve only got government loans. I can only wish that I’d be able to take advantage of this! Oh well.

    That said, this is super useful to know for a lot of folks.

    1. Yeah, the only time I’d ever recommend taking a refinance on government student loans would be if you actually had loans over 6% – I would only refinance those. And that’s if you have a 6-12 month emergency fund set up and probably only if you are living at home/able to move back home.

      When you refinance government to private you lose the protections of IBR, PSLF, and all of those safety nets.

  4. Make sure you ask about prepay penalties and any fees at some of these companies. Compare what index is used on the variable rates as they can vary in how often they change..for example Libor changes more frequently than prime and is typically lower so know you’re comparing apples to apples.
    You do have a mistake in that Wells Fargo Does have a max cap on the variable rates which you listed as unlimited.

    1. Good point, and it’s always good to look back at the history of the rates that your loan is tied to. But past results do not equal future results! As far as I could tell, none of them have pre-payment fees or I would have not included on this list. I have not seen any that charge an origination fee or a transfer fee, so I’m hoping that continues to be the standard within this market.

      Do you have the information where Wells Fargo displays the maximum cap on variable interest rates? The only information I was able to find was “The variable rates listed below are starting rates and may increase over time which may result in a higher monthly payment.” which leads me to believe there is no cap. I’m happy to change that information if it’s inaccurate though.

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