Over the years, refinancing has become far more common, and SoFi has grown into one of the biggest names in student loans and finance in general.

Despite all of these changes, the fundamental questions remain. Is SoFi student loan refinancing a good deal? What should consumers expect?

Meet SoFi in 2024

SoFi first started as a student loan refinance company, but they have significantly expanded.

SoFi now offers mortgages, personal loans, and investing services. The days of SoFi being the plucky underdog are over.

For borrowers focused on getting a lower rate on their student loans, this evolution has some advantages.

For SoFi to grow, they had to evolve from a lender that focused only on high earners to a lender willing to accept a wide range of borrowers. The good news for borrowers is that many of the perks that SoFi used to target the doctors and lawyers of the world still remain.

SoFi approved many borrowers with less than perfect credit in an attempt to expand. We have also seen borrowers with excellent credit shop around to compare rates and find that SoFi was the best option. As a result of SoFi’s ability to offer the best rate for a variety of borrowers, SoFi checks in at #3 in our student loan refinance lender rankings.

SoFi Refinance Rates and Options

SoFi offers a wide range of student loan refinancing options. As of November, 2024, the following rates and terms are available:

See SoFi disclosure Fixed rates range from 3.99% APR to 9.99% APR with 0.25% autopay discount and 0.25% direct deposit discount. Variable rates range from 5.99% APR to 9.99% APR with 0.25% autopay discount and 0.25% direct deposit discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 10/04/24 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay and Direct Deposit are not required to receive a loan from SoFi. You may pay more interest over the life of the loan if you refinance with an extended term. for more. All rates are expressed as an APR with all discounts including a .25% autopay discount.

Borrowers can refinance federal student loans, private student loans, and Parent PLUS loans. SoFi, like most legit lenders, does not charge any application fee, origination fee, or prepayment penalties.

Looking at all of the SoFi possible rates and options, borrowers should be careful to tweak loan repayment lengths to find the sweet spot between getting the lowest rate and getting the best monthly payment.

For example, one strange aspect of the current SoFi options is the close rates offered for longer-length loans. The rate on a 10-year loan may be only a fraction of a percent less than the rate on a 15 or 20-year loan. Opting for a longer loan can result in an interest rate that is only slightly higher. The longer loan advantage is more flexibility.

Sherpa Tip: Having a 20-year loan does not mean that a borrower must take 20 years to pay it off. Opting for the longer duration loan gives the borrower the flexibility of low minimum payments. Additionally, the loan can still be paid off aggressively by making extra or larger payments.

The SoFi Advantages

SoFi offers competitive interest rates and flexible repayment terms. However, the advantages associated with SoFi go beyond the numbers.

To handle a large volume of applications and borrowers, SoFi has a streamlined system. The application process and loan funding is fast and simple.

SoFi also runs its customer support out of a California call center. Having the customer support team here in the United States doesn’t necessarily guarantee better service. Still, we do like to see them spending the extra money to make sure customers get the best treatment possible.

Borrower Beware – The Danger of Refinancing Federal Student Loans

If you have the credit score and income to qualify for SoFi, it is a great option. However, there is one warning that all borrowers need to consider carefully…

SoFi, like most other refinance lenders, is willing to consolidate federal loans with private loans. Though combining federal loans with private loans is a mistake for some, in other instances it is a good idea. The classic example would be high-income earners with strong job security.

The important thing for borrowers to realize is that the repayment plans and forgiveness programs of federal loans are eliminated upon private loan consolidation. Because there is no way to undo a consolidation or refinance, it is critical to make a smart decision when weighing the federal perks vs. the lower interest rate on the private market.

Outside of the traditional concerns that go with student loan refinancing, we see no additional concerns associated with SoFi.

How does SoFi work?

First, borrowers specify the loans that they want refinanced. SoFi creates a new loan and uses the funds from that loan to pays off the old loan. The borrower then pays off their debt to SoFi according to the terms of the new loan.

Borrowers typically refinance to achieve one of two goals:

• Lower Payments – Selecting a longer loan or getting a lower interest rate means a smaller monthly bill.
• Reducing Interest – Some borrowers select a short loan with an ultra-low interest rate. Going this route eliminates the loans as quickly as possible and minimizes total spending.

SoFi’s seems to have a goal of becoming the finance company for millennials. This is evidenced by their aggressive expansion into areas like banking and life insurance.

Helping people pay off their student loans seems to be SoFi’s way of securing long-term customers who continue the business relationship in more profitable areas such as wealth management.

From a student loan borrower perspective, this is probably a slight advantage because it means SoFi has an incentive to keep customers happy even after they have refinanced their loans. These long-term goals would also explain why SoFi can keep its rates lower than most of the other lenders in the marketplace.

SoFi Refinance Reviews from Actual Customers

When this article was originally published, we could only base our opinion on the black and white terms of the SoFi loans. Since that time, dozens of customers and would-be customers have taken the time to leave their thoughts in the comment section.

What we have learned is that SoFi customer satisfaction seems to revolve around whether or not the application was approved. Because of the originally tough underwriting criteria, many people have stopped by to share their disappointment with their denial. As one user summed it up, “people with high FICOs and high incomes sail right through while people with more moderate FICOs and incomes don’t seem to have the same experience.”

SoFi Complaints and Reviews from the BBB, Reddit, and Others

Most of the SoFi reviews from other experts have reached similar conclusions.

The Better Business Bureau gave SoFi an A+ rating, but there were numerous user complaints about SoFi. Some of the complaints dealt with SoFi’s mortgage and personal finance loans. The customer rating was 1.59/5 from a total of 311 reviews.

Reddit users generally have positive things to say about SoFi. However, when doing head-to-head rate checks with other lenders, SoFi at times did not offer the best interest rates.

The Consumer Financial Protection Bureau complaint database has about 50 complaints related to SoFi student loans. The issues were varied in the complaints. In terms of the volume of borrower issues, SoFi is comparable to other lenders, perhaps a bit better than average.

In short, the SoFi reviews are mixed, which is to be expected with any financial company.

SoFi Compared to Other Lenders

Pros:	SoFi is the biggest name in student loan refinancing for a simple reason – their rates are reliably among the best on the market.	LendKey works with a large network of smaller credit unions and banks. As a result, many applicants get the best offer from LendKey.	Splash has the best new customer bonus right now, and they have excellent rates and term opitons.
Cons:	SoFi has grown into a large company offering mortgages, personal loans, and investment services. They no longer focus entirely on student loan refinancing.	Going the LendKey route does require working with a local bank or credit union. For many, this is a plus, but it is an extra step.	Splash is a newer lender and getting approval may be more difficult for some borrowers.
Bonus:	NA	$150	Up to $500

Should I apply for a SoFi loan?

SoFi is an excellent option for student loan refinancing, but SoFi is far from the only option.

Borrowers looking for the best deal would be wise to check their rate with SoFi. However, checking rates with other lenders is also essential as many companies advertise rates as low or lower than SoFi. Each lender uses different underwriting criteria. Thus, it is impossible to say which of the top student loan refinance companies will actually offer the best rate.

Click here to check your rate with SoFi.

The post SoFi Student Loan Refinance Review appeared first on The Student Loan Sherpa.

ELFI Review Overview

ELFI has emerged as one of the best student loan refinance lenders on the market.

Our review of ELFI found two big advantages over most other lenders. First, the ELFI customer support is based in the US and has won several awards. Second, because ELFI is backed by a bank, its rates tend to be more stable than those offered by tech companies like SoFi, and Earnest.

That all being said, there is some cause for concern for borrowers considering refinancing with ELFI.

Getting Started: The ELFI Basics

At this time, ELFI currently offers the lowest advertised interest rate in student loan refinancing. Their 5-year fixed-rate loan is an excellent choice for borrowers looking to repay their debt as quickly as possible. Another highlight for ELFI might be the 15 and 20-year fixed-rate loans which are among the lowest rates on the market.

To qualify for an ELFI loan, a borrower does need to have a degree and pass a credit check. Like most legitimate lenders, there are no loan application fees, origination fees, or prepayment penalties.

One area where ELFI is a little more strict than other lenders is that they require a minimum student loan balance of $10,000 to refinance. Borrowers with smaller balances should look at lenders like SoFi and Laurel Road, who require a minimum of only $5,000.

ELFI does offer a co-signer release program, but co-signers can only be released if the borrower can pass a credit check on their own.

ELFI Advantages

ELFI offers more than just low interest rates. Their call centers are all located in Tennessee, and borrowers get a single point of contact with a direct number to call for support. This should make resolving any issues go significantly smoother.

ELFI student loans are serviced by Mohela and American Education Services (AES). Mohela has one of the better reputations among student loan servicers, while AES is just average. Unfortunately, borrowers do not have a choice in the servicer that they are assigned.

ELFI is currently running a promotion that provides new borrowers a bonus of $150 who sign up following this link. While $150 is a decent chunk of change, we should note that it is still critical to shop around — borrowers with larger balances will be much better off in the long run if they chase the lowest rate rather than the biggest bonus.

Borrower Beware: An Important ELFI Concern

The concern we have with ELFI applies to pretty much every student loan refinance company.

Even though it makes sense for some borrowers to consolidate their federal student loans with a private lender, this move can also be a mistake. Refinancing your federal loans means you lose federal perks such as repayment plans based upon your income and student loan forgiveness programs. We look at these programs as an insurance policy. The cost of that insurance policy is higher interest rates.

If you think you might lose your job or not be able to afford your student loans, it is best to keep your loans with the federal government. If you have no problem paying off the debt, locking in a low interest rate could be a smart move.

Do I have Federal Loans? If you are not sure if your student loans are federal or private, visit the Department of Education’s Student Aid Portal. They keep detailed records of all federal student loans.

Why Pick ELFI Over Refinance Lenders Like SoFi and Earnest?

After watching ELFI for several years, I’ve come to the conclusion that this is a lender that marches to the beat of its own drum.

Investor interest tends to move the rates at most tech-based lenders. If student loans are a popular investment, the tech companies can offer excellent rates. If nobody wants to make an investment, funds dry up, and lenders raise rates. Most refinance companies move rates up and down in a similar manner.

ELFI rates move around less. There are times when ELFI is a bit behind the rest of the market, and there are times when ELFI has by far the best rates. For this reason, ELFI is worth a look for any borrower shopping around.

ELFI Student Loan Refinance Review: The Final Thoughts

The ELFI option sticks out due to the low interest rate offerings in a variety of loan categories.

Ultimately, advertised rates are a tiny part of the refinance equation. What matters is the actual rate offered. Because ELFI combines the stability of a longstanding bank with very low interest rates, it is a lender worth serious consideration.

Click here to check your rate with ELFI.

The post ELFI Student Loan Refinance Review appeared first on The Student Loan Sherpa.

Overview: Brazos Student Loan Refinance Review

Let’s get the big limitation out of the way first: Brazos is only for residents of Texas. If you don’t currently reside in Texas — even if you went to a Texas school — you can’t refinance with Brazos.

Those who don’t live in Texas will have to shop elsewhere for student loan refinancing.

As for the Texans reading this article, Brazos is an excellent option for student loan refinancing. In fact, for most Texans, Brazos may be the very best student loan refinance lender available.

Brazos Student Loan Refinance Basics

Brazos will refinance private loans and federal loans, including Parent PLUS loans. The maximum balance that Brazos will refinance is $400,000 for graduate borrowers and $150,000 for undergraduate borrowers.

The minimum credit score for borrowers is 720. However, Brazos will accept credit scores as low as 690 if the borrower has a cosigner.

Like other legitimate lenders, Brazos does not charge any loan origination, prepayment, or application fees.

All Brazos loans are serviced by Firstmark servicing.

Reasons to Choose Brazos to Refinance

Unlike most national lenders, Brazos is a nonprofit, and they get major points for transparency.

If you visit the Brazos site, you can see a detailed table that shows the exact interest rate offered to borrowers, depending on their credit score. The for-profit lenders don’t share this level of detail with consumers.

It is also worth noting that the rates offered are excellent. They compare very well with the top rates on the national market.

Reasons to Avoid a Brazos Refinance

My number one concern with Brazos applies to every refinance lender: It isn’t always a good idea to refinance federal loans with a private lender. If you choose to refinance with Brazos, you permanently erase federal benefits like income-driven repayment and student loan forgiveness.

Borrowers should carefully weigh the federal perks against the benefit of lowered interest rates from refinancing.

The other big downside to Brazos is the strict requirements. In addition to only being available for Texas residents, the $10,000 minimum to refinance is higher than most lenders who only require $5,000. Likewise, the minimum credit score and income are relatively high for a refinance loan. Most national lenders have more forgiving underwriting requirements.

Brazos also does not offer a cosigner release program. The transparency is good because many lenders advertise a release but make it difficult to qualify. However, most cosigners will want an option to get released from the loan.

Final Thoughts: Brazos Refinance Review

Most borrowers won’t qualify for a Brazos loan because of their strict requirements.

However, those who qualify will receive excellent interest rates from a reputable lender.

If you live in Texas and have an excellent credit score, Brazos is a superb refinance opportunity.

The post Brazos Student Loan Refinance Review appeared first on The Student Loan Sherpa.

Earnest Review Overview

In a marketplace where all lenders blur together, Earnest sticks out as a legitimately different lender. 

Earnest evaluates applications differently and approves some borrowers that might get rejected by other more traditional lenders.

The Earnest sales pitch is that you will get better results with them because they are better at making lending decisions. Where some lenders look only to FICO and year income, Earnest looks at the big picture.

This big picture approach makes looking into Earnest a wise decision for many refinance shoppers. As a result, Earnest currently gets the 6th spot in our student loan refinance company rankings.

Meet Earnest Basics

Earnest Overview
Loan Terms	5 - 20 Years
Variable Rate Loans	5.89% - 9.74%^
Fixed Rate Loans	3.95% - 9.74%^
Minimum Credit Score	665
Minimum Refinance Amount	$5,000
New Borrower Bonus	$150^

Like most lenders, Earnest offers both fixed-rate and variable-rate loans. One thing that makes Earnest a little different is that they provide more than the traditional 5, 10, 15, and 20-year loans. Borrowers can choose repayment lengths that fall anywhere on the 5 to 20-year spectrum, meaning if 18 years is ideal for you, you get 18 years to repay your loan.

Earnest calls this feature “precision pricing.” This sliding scale may not appeal to everyone, but it has two main advantages. For long-term planners with specific deadlines, such as retiring in 12 years or buying a home in seven, precision pricing could be ideal. It also works nicely for people who know exactly how much they have in their monthly budget. If you can spare exactly $327.42 per month, you can get a plan that fits your specific need.

Like other legitimate lenders out there, Earnest doesn’t charge any pre-payment penalties or loan origination fees. Paying back your loan is just paying back principal and interest.

Help for more Borrowers: Most refinance lenders only accept borrowers with completed bachelor’s degrees.

Earnest will refinance borrowers with associate’s degrees and borrowers who didn’t finish school.

Navient Purchase of Earnest

When this article was first published, Earnest was a student loan startup out to make a name with their flexible repayment options.

As time went by, Earnest grew and was ultimately purchased by Navient, a massive student loan company with a questionable reputation.

Unsurprisingly, the $155 million purchase of Earnest has led to some changes. Some Earnest customers now complain that things are less consumer-friendly and less transparent.

Those looking to refinance their student loans to get away from Sallie Mae/Navient should look to other lenders offering refinancing services.

Earnest Advantages

One thing that we love about Earnest is that they service all of their loans. Many lenders will refinance your debt but then sell the loan to another company. The quality of the new service you get can be a mystery. Earnest keeps repayment in-house. It doesn’t guarantee better service, but it is better than the alternative.

The most significant advantage with Earnest, and the reason many people may choose to work with them, is their “big picture” approach to lending decisions. They believe that they can make a smarter decision on application approvals by looking at more financial information. We reached out to Earnest to get an example of someone who could benefit from their method, and they provided the following response:

“We have a client who is a librarian with a Masters in English Literature. She makes a public librarian’s salary and is incredibly financially responsible — she pays her bills in full and on time and saves a substantial amount of money in both investment and non-investment accounts. But she also doesn’t have a great credit score — it’s not bad, but not great — because she simply doesn’t use traditional credit cards and credit products. That’s someone who could be instantly denied by a lot of traditional lenders (as well as Earnest competitors), but when we look at that profile, we see someone who is tremendously responsible with her money and deserves our best rates. We think our approach unlocks access to credit for a lot of people who truly deserve it.”

A couple of things stand out from this example: a less-than-perfect credit because of a limited history and building a retirement account. If you are very careful with your money, i.e., saving more than you spend and putting money aside for retirement, Earnest is worth exploring.

However, it is worth pointing out that getting approved for an Earnest loan will still require a credit score of at least 680.

Cause for Concern

Earnest advertises a 2 min application for credit approval, but practically speaking, we do have some concerns about this process. The major advantage of Earnest, the big picture approach, could also become a big issue during the application and loan refinance process. Because Earnest examines more financial information, it means that Earnest will need access to more financial information. It means more records to verify and paperwork to put into place.

Ultimately, if sending in a little bit of extra information lowers your interest rate, it is time well spent, but it does increase the odds of headaches along the way.

Finally, Earnest refinances federal student loans. Refinancing federal loans with a private lender is a risky trade. Borrowers can get better interest rates, but they give up federal perks like Income-Driven Repayment plans and student loan forgiveness. While this can work for some borrowers, for others, it is a huge mistake. Before you refinance, make sure you know whether or not student loan refinancing is for you.

Frequently Asked Questions About Earnest

Earnest Refinance Review: Final Thoughts

Earnest is probably the ideal option for people who are responsible with their money but might not have a huge income or a perfect credit score. If you think your credit score or yearly income doesn’t tell the whole story, Earnest could be the best option.

Given that Earnest has loans with rates starting below 5% and a unique approach, they get a spot in the top five of our student loan refinance rankings.

To check out the rate you qualify for with Earnest, apply here.

—

^ The lowest listed rate for Earnest is a 5-year variable rate loan, and rates are listed as an APR. Please see the Earnest Disclosure for more details on rates and bonus terms.

The post Earnest Student Loan Refinance Review appeared first on The Student Loan Sherpa.

When reviewing Laurel Road and comparing it to other lenders, Laurel Road has a track record of offering excellent interest rates in a variety of categories. Laurel Road also has recently gained a reputation for higher application approval rates.

While there is plenty to like about Laurel Road, it is not a company or a refinance product free of concerns, which we will get into below.

Laurel Road Basics

Note: All interest rates are listed as an APR or annual percentage rate.

Like other legitimate lenders, Laurel Road has no loan origination fees or prepayment fees.

Additionally, Laurel Road also offers loan refinancing tailored explicitly to parents who took out loans for their children as well as physicians in their residencies.

Advantages to Refinancing with Laurel Road

One of the significant benefits of Laurel Road is that it is the product of a bank, rather than a student loan company. Banks face greater scrutiny in their lending practices, meaning borrowers face a much lower likelihood of lender shenanigans when applying for a loan.

At present, Laurel Road has some of the best interest rates in the student loan refinance marketplace.

If you are a medical professional, Laurel Road has several unique services tailored especially to your situation. This includes a residency and fellowship repayment option that allows you to pay just $100 per month until you become an attending physician. This will enable borrowers to immediately lower interest rates and keep payments down until their finances allow for higher payments.

Disadvantages and Concerns

The drawbacks to Laurel Road apply to pretty much every other lender on the market.

First, they allow consolidation of federal student loans in their private loan refinance. For some borrowers, this is a very smart financial move. Reducing the interest rates on federal loans can save thousands over the life of the loan. However, taking this step could also be a huge mistake because it means that student loan forgiveness programs and income-driven repayment plans are no longer an option. Make sure you are certain you want to give up the perks of having a federal student loan before you refinance.

Second, Laurel Road does offer a co-signer release program, but borrowers should advise their co-signers not to expect or rely upon a co-signer release. For starters, borrowers are not able to even apply for a co-signer release for the first 36 months their loan is in repayment. At that point, a release application can be submitted, but won’t necessarily be approved. Because of the many steps and uncertain nature of co-signer release programs, we encourage all co-signers on all loans to plan on being on the loan until it is paid in full.

Things to Know About Laurel Road

In preparing the Laurel Road refinance review, we reached out to ask for some additional information that might be hard for most borrowers to track down. Here is what we learned.

• Laurel Road loans are serviced by MOHELA. Of the many companies that service student loans, MOHELA is usually considered to be among the best.
• Borrowers without a degree will not be able to refinance with Laurel Road, but those with an associate’s degree can be refinanced up to $50,000.
• Parents with Parent PLUS loans are also able to refinance with Laurel Road. A Parent PLUS loan can also be refinanced in the name of the child for whom the loan was borrowed.
• Laurel Road uses TransUnion credit reports.
• Loans are usually funded within 20 days from the date the application is submitted, but this timeline depends upon how fast borrowers submit requested documents.

Final Thoughts on the Laurel Road Review

Laurel Road, has consistently appeared in the top five of our student loan refinancing rankings. Not only does Laurel Road currently advertise some of the best rates on the market, but they also have a reputation for actually offering those low rates to borrowers. For this reason, checking rates with Laurel Road is usually time well spent for borrowers looking to refinance.

However, while Laurel Road scores high in our metrics, it shouldn’t be the only place that borrowers check rates. Each borrower has a different credit profile and each lender evaluates applications differently. All borrowers should check rates with 3-5 lenders to make sure they are getting the lowest rate possible.

Click here to check your rate with Laurel Road.

The post Laurel Road Review: Student Loan Refinancing and Consolidation appeared first on The Student Loan Sherpa.

Meet Splash Financial

In the student loan refinance marketplace, Splash Financial is a medium-sized lender that often has some of the best-advertised rates. The downside is that they tend to be a little bit more picky than other lenders.

Splash Financial first entered the student loan refinance business as a lender focusing exclusively on young doctors in their residency or a fellowship. As Splash grew, refinancing expanded to all college graduates. Unfortunately, Splash might not be the best choice for all student loan borrowers.

Splash Financial Basic Terms

Splash offers both fixed-rate and variable-rate student loan refinancing. Borrowers wishing to refinance with Splash can borrow a minimum of $5,000, and there is no maximum. Like other legitimate lenders, there are no prepayment or loan origination fees with Splash Financial.

As shown in the table below, borrowers have a wide range of repayment lengths available. This represents a slight deviation from the more typical industry standard of 5, 7, 10, 15, and 20 year repayment periods.

* The lowest listed rate includes a .25% autopay discount. See full Splash disclosure for more details.

Splash Interest Rates

The refinance rates with Splash are among the best in the industry.

Because Splash works with several different credit unions, they can offer a wide range of loan lengths and terms. This flexibility can occasionally create some strange outcomes. For example, Splash may offer lower rates on their 8-year loan than what they offer on a 7-year loan. For this reason, borrowers should take a very close look at the rates offered across loan types with Splash. Don’t assume that a longer loan will have a higher interest rate.

Over the past year, Splash interest rates have consistently been among the best in the market. Here again, Splash having relationships with multiple credit unions works out well for borrowers. Lenders with more limited financial resources may increase rates if the single bank they work with has a shortage of available funds. Splash can stay consistently low because they can tap into various credit unions.

Splash Advantages – Where Splash Financial Excels

One aspect of Splash Financial that we especially liked in our review of the company was how they responded to criticism in their initial refinance product. Splash charged loan origination fees and received justifiable criticism. Splash responded to consumer complaints and eliminated all loan origination fees. No lender gets everything right, and it is a very good sign when a lender accepts responsibility for an error in judgment and makes things better.

Though Splash now serves a broader audience, the specialty of Splash is still refinancing for doctors. They even offer special rates for doctors who are still in training.

A final advantage to Splash is that they offer new customers a bonus of up to $500 for signing up. This is one of the largest bonuses currently on the market, but it is only available to those refinancing at least $50,000 in student debt. We think the bonus is nice, but in the long run, the rate will be the number that makes a difference in a consumer’s bottom line.

Splash Disadvantages – Some Red Flags to Review

The two major disadvantages with Splash apply to nearly all student loan refinancing companies.

First, Splash Financial offers consolidation and refinancing of federal student loans. For some borrowers, this move makes sense, but for others, it can be a mistake. When borrowers refinance federal loans, they give up perks such as income-driven repayment plans and forgiveness programs like Public Service Loan Forgiveness. For some, the lower interest rates justify giving up federal protections. For others, it is a huge mistake. Federal borrowers should carefully consider their options before refinancing loans with a private lender.

The second issue to highlight is the Splash cosigner release program. Splash advertised that a cosigner could be released from the loan after one year of on-time payments. All cosigners should understand that they are committed to the loan for the life of the loan and that a cosigner release is far from a certainty. Securing a release requires a re-evaluation of the borrower’s credit, and there is minimal incentive for any lender to grant this release.

Finally, we also note that Splash is a very young company. In some cases, this can mean an excellent opportunity for consumers, and in others, it can be the cause of headaches. That being said, Splash works with several well-established credit unions, and the feedback we have received thus far has mainly been positive.

Review Final Thoughts

Splash may be somewhat new to student loan refinancing. However, their refinance product is the real deal. At present, Splash has probably the best range of interest rate offerings out of any lender on the market.

As a result of the excellent rates and positive reviews from Student Loan Sherpa readers, Splash Financial has been elevated to first place in our student loan refinance lender rankings. Borrowers looking to lock in lower student loan interest rates would be wise to check their rates with Splash to see how they stack up against other lenders.

Other Lenders to Consider:

	ELFI is a traditional bank with a major focus on quality customer service. Getting approved is hard for some borrowers, but those that do get approved receive excellent interest rates. Read more...
	SoFi is the biggest name in the student loan refinance space. They consistently offer excellent rates with high approval numbers. Read more...
	Earnest attempts to look at the big picture for borrowers. The application requires a bit more information, but it doesn't take long to complete, and could result in an approval where other lenders might reject. Read more...
	LendKey partners with smaller banks and credit unions across the country. This approach results in higher approval numbers and competitive loan terms. Read more...

The post Splash Financial Student Loan Refinance Review appeared first on The Student Loan Sherpa.

LendKey Student Loan Refinance Review Overview

LendKey ranks highly in the Student Loan Sherpa Refinance Lender Rankings because they have a long track record of approving borrowers that other lenders reject and offering low interest rates.

However, there are some red flags with LendKey that borrowers should review before moving forward.

LendKey Basics

LendKey offers a wide range of loans and has very competitive interest rates.

Borrowers can refinance both federal and private loans with LendKey. Like most legitimate lenders, LendKey does not charge application fees, origination fees, or prepayment penalties.

How does LendKey Refinancing work?

The application is just like with any other lender: you provide some basic loan details and agree to a credit check. After that, LendKey connects you with a local credit union that actually gives you the loan.

This method helps small credit unions and local banks compete nationwide. By joining forces, they cut down on advertising expenses, which lets them offer very low interest rates. However, since these are local credit unions, they often have a bit higher acceptance rates compared to big national lenders.

The LendKey Pros

LendKey stands out mainly because it offers lower interest rates and easier approval criteria. Many people choose LendKey for their first refinancing. As their credit scores and incomes get better, they might refinance again elsewhere to get even lower rates.

LendKey offers the option to only pay interest for the first four years of the loan. While this might seem attractive, it’s generally not recommended. However, it could be a good choice for someone like a resident physician who expects to earn a lot more money later on.

LendKey also has a $150 bonus for new customers. While $150 might not be a deciding factor in choosing a lender, it’s a nice extra.

LendKey Refinance Reviews from Reddit, the BBB, and Others

In preparing the LendKey refinance review, I looked at consumer feedback from other sources to find common complaints.

When researching lenders, consumer complaints are expected. The major red flags come if the same complaint keeps coming in or if there are an unexpectedly large amount of borrower complaints. I observed no such red flags with LendKey.

Here is what I found at various resources:

The Consumer Financial Protection Bureau (CFPB) – The CFPB database on LendKey complaints looks fairly standard. LendKey has more complaints than some lenders, but not a concerning amount. The most common issues raised were from borrowers who had problems with payment processing and falling behind on payments due to financial hardships.

The Better Business Bureau (BBB) – For a lender that has been in business for a long time, I was surprised to see only four customer complaints on the BBB site. Some of the complaints were from people with rejected applications, but this trend applies to most lenders.

Reddit – Looking through the student loans subreddit posts about LendKey, most people seemed satisfied with LendKey and pleased with the interest rates offered. One person did complain about the time it took LendKey to process payments, which was also an issue raised in the CFPB database.

Student Loan Sherpa Readers – In general, reader feedback on LendKey is somewhat limited compared to other lenders. Generally speaking, fewer reader comments with complaints is a positive sign. I’d also add that when I have personally helped readers shop around, LendKey approval rates and offered interest rates have been very competitive. Often they are the best on the market.

A Warning About LendKey and Others…

LendKey refinances private loans with federal government loans. Going this route makes sense in some circumstances, but it could be a massive mistake in others. Because there is no way to “undo” a student loan refinance, it is essential that the borrowers know whether combining their federal and private loans is a good idea.

Borrowers who are worried about a possible job loss or income reduction in the future would be wise not to refinance their federal loans. Federal loans come with borrower protections that no private lender can match.

Switching from one private lender to another does not carry the same risk. Borrowers with private loans can utilize a refinance to lock in lower interest rates and lower monthly payments. For this reason, it is often advisable to only refinance private loans.

LendKey: Frequently Asked Questions

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Because Citizens is a solid choice despite a couple of drawbacks, Citizens ranks in the middle of our student loan refinance company rankings.

Citizens may not be the best lender in the market, but many borrowers will find Citizens offers a competitive refinance option.

Citizens Bank Refinance: Terms and Conditions

As you can see from the table, Citizens Bank offers a wide possible range of interest rates. On the lower end, these rates are excellent, but the higher rate loans are pretty abysmal. Whether or not Citizens ends up being the best deal will depend upon your credit score and income.

Citizens does get high marks for the length of time available to repay the loans. With up to 20 years to repay your loans, Citizens has one of the longest repayment plans in the market. Savvy borrowers know that paying the minimum over the life of the loan is a recipe to spend a lot on interest, but by stretching out repayment so far, the minimum is much more manageable for months when the budget is tight.

Finally, like other legit lenders, there are no charges for loan applications, origination fees, or prepayment penalties.

Citizens Bank Interest Rates vs. Other Lenders

When we break down the interest rates according to loan type (fixed and variable) and loan length, Citizens ranks among the best lenders in a few different loan categories. Additionally, Citizens is routinely just outside the top three in many other loan categories.

Ultimately, while Citizens advertised rates across many loan types are very competitive, the only way for an individual borrower to verify they are getting the best possible rate is to apply with several different student loan refinance companies. This is because each lender uses a unique formula when evaluating credit applications.

Red Flags for Borrowers to Review

One thing we don’t like is the emphasis on co-signers. While co-signing may be a necessity for some, it is something that most borrowers would be wise to avoid. The mandatory 36 month waiting period for a co-signer release is also one of the longest we have seen. Many co-signers will want to be able to be removed from the loan within a year or two.

Citizens seems to be targeting people with federal loans for their refinancing. Here at the Student Loan Sherpa, we think private consolidation of federal loans can be a huge mistake. However, for others is it is a good idea. Any prospective borrower must understand that if you consolidate your federal loans with a private lender, you will never qualify for student loan forgiveness or an income-driven repayment plan.

However, Citizens does a better job than most companies at pointing out some of the risks associated with private loan consolidation.

Citizens Bank Refinancing Review: The Bottom Line

The Citizens Bank refinance program claims a spot in the top half of our Student Loan Refinance Rankings, based mainly on the low interest rates advertised.

Due to the large range of possible interest rates, borrowers would be wise to apply to several different companies to find the lowest rate actually available. By working with multiple companies, potential customers also get the opportunity to directly compare the companies and how they interact with their customers before any contracts are signed. Please note, if you decide to go this route, be sure to apply to all of them in a short period of time to prevent any damage to your credit report.

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MEFA student loan refinance does come with a few major limitations, but for many borrowers, it can be a great option.

Due to limited repayment options and slightly higher than average interest rates, MEFA checks in towards the bottom of our Student Loan Refinance Lender Rankings.

MEFA Refinance Basics

MEFA requires applicants to have a 670 or greater FICO score and to be earning at least $2,000 per month. They also require borrowers to have been in repayment on their current loans for at least 12 months.

Like most other refinance companies, there are no origination fees with MEFA, nor are there any prepayment fees. MEFA does allow co-signers, but there is no co-signer release program, so any co-signer will be on the loan for the life of the loan.

MEFA also makes it very clear that they refinance student loans, but that they do not consolidate student loans. The service MEFA provides is that they will pay off existing student loans with both private lenders and the federal government. In return, the borrower repays MEFA according to the terms of the new loan that was used to pay off the other debts.

MEFA Limitations: Repayment Options and Co-signer Limits

The biggest limitation on the MEFA refinance loans is that there is only a 7, 10 or 15-year repayment plan.

For some borrowers, this length is a sweet spot, but for many, it presents an issue. If you are looking for a 5 years loan with the lowest interest rates possible, MEFA will not be a good option. Similarly, if you are looking to stretch out payments over the longest length possible, many other student loan refinancing companies offer 20-year loans. However, if a 15-year loan is what you are looking for, MEFA could be a good deal.

Even the MEFA’s lowest advertised rates do appear to be higher than most other lenders, if you compare MEFA rates to the 15-year loan rates of the competition, MEFA falls right in line with most other lenders.

Another significant limitation with MEFA is the lack of a co-signer release program. Generally speaking, we are very skeptical of co-signer release programs because lenders have no incentive to approve borrower applications, but eliminating the possibility means that if you get a great interest rate, your cosigner will have the loan show up on their credit report for the next 15 years. This is a major commitment.

MEFA Advantages: Transparent Consumer Education and Great Rates for Certain Loans

If you spend some time on MEFA’s site, you will see they are one of the better lenders when it comes to helping make sure borrowers make a smart decision when it comes to refinancing federal student loans.

As we note in all of our student loan refinancing reviews, borrowers are giving up a lot of federal perks if they refinance their federal loans with another lender. This gives them much more credibility in our view.

Additionally, the interest rates offered for 15-year loans are quite competitive with other big-name lenders. This repayment length only appeals to a certain subset of borrowers, but for those looking for a 15-year loan, MEFA can be a good option.

Bottom Line: Limited Options but Quality Options

MEFA is not a big-name lender and they have a much smaller advertising budget than companies like SoFi.

They also offer a much smaller selection of available loans. However, if you happen to meet the MEFA requirements and are looking for a 15-year loan, MEFA can be a great option and should definitely be on the list of companies to apply to and check your rate.

Due to the significant limitations with MEFA loans, they currently rank towards the bottom of our student loan refinancee rankings. However, if we were to rank companies according to who had the best 15-year loan, MEFA would likely be several spots higher on the list.

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EDvestinU scores points for being a non-profit and for consumer transparency. 

The short-term interest rates are not the most competitive, but EDvestinU excels in the long-term loan categories. As a result, EDvestinU ranks well in our student loan refinance company rankings.

EDvestinU Refinance Basics

Borrowers can borrow a maximum of $200,000 in a student loan refinance.

EDvestinU is also a rarity in the student loan refinance world as they will allow Parent PLUS loans to be refinanced (by the parent).

Additionally, applicants for an EDvestinU loan are not required a college degree. Most lenders require a degree.

Finally, like the other legit refinance companies, there are no loan origination fees or prepayment penalties from EDvestinU.

Reviewing the EDvestinU Advantages

The longer you need to repay an EDvestinU loan, the better the interest rates get compared to other lenders. The 15-year fixed-rate and the 20-year fixed-rate loans are among the very best student loan refinance rates available.

EDvestinU gets major points for their transparency in the cosigner release program. Many lenders offer a cosigner release, but they always say that it is subject to credit approval. EDvestinU sets out the specific requirements to get a release. A borrower must: make 36 consecutive and on-time payments, have a FICO score above 699, and make more than $30,000 per year for student loan balances up to $100,000 or make more than $50,000 per year for balances above $100,000. Additionally, the borrower needs a debt-to-income rate of 43% or less, and cannot have any foreclosures, repossessions, wage garnishments, unpaid judgments, or bankruptcy proceedings.

While the requirements for a cosigner release are quite strict and take longer than some other lenders, we love that borrowers know exactly what is required to get the release. Hopefully, more lenders will adopt this policy.

EDvestinU Disadvantages

Even though we like the EDvestinU transparency on their cosigner release program, we do not like the fact that EDvestinU places such an emphasis on having cosigners.

In researching EDvestinU we used their refinance calculator to see what rates were offered for various circumstances. We noticed a disturbing pattern: In order to get the lowest advertised rates a cosigner with a FICO credit score above 800 is required. EDvestinU’s refinance calculator indicates that even for borrowers with credit scores of 800 or more, the only way to get the best advertised rate is with a cosigner.

From EDvestinU’s perspective, this policy makes sense. Having a cosigner makes the loan less risky, so it is somewhat understandable that they can offer a lower rate. That being said, we hate to see such an emphasis on having a cosigner because we think using a cosigner to refinance should be viewed as an option of last resort.

Like nearly all other student loan refinance companies, EDvestinU refinances federal student loans. 

By refinancing federal loans with a private lender, borrowers give up all of the federal perks that come with the loan such as income-driven repayment plans and student loan forgiveness. For some borrowers, the perks are unnecessary and the lower interest rates justify the move. For others, it can be a mistake. The key is for borrowers to understand what they are giving up when they go through the refinance process.

Final Thoughts on EDvestinU

If you are looking to refinance your student loans for an extended period of time and you have a cosigner, EDvestinU may be the best option available. 

EDvestinU is not without drawbacks, but it is unquestionably one of the better lenders on the market, and borrowers who are shopping refinance options would be wise to check their rate with EDvestinU.

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