Author: Britanny Holand
Student loan refinancing works by switching to private loan lenders. The new private company pays off the old debt and will offer you a better interest rate or more suitable terms tied to your credit history, income, and other characteristics. This means you can have big savings with student loan refinancing. It is a considerable financial strategy if you have a good, stable income and a good or excellent credit score. More importantly, it is beneficial if you want to switch to lower interest rates.
Below is the compiled list of top student loan refinance lenders in 2023 that provide a wide selection of loan terms, competitive interest rates, and inclusive eligibility requirements.
RISLA
RISLA is a good choice of a lender for those who want to have similar benefits to federal student loans. What’s more exciting about it is that it is a non-profit, state-based lender that offers a generous forbearance policy and an income-driven repayment program. More than that, it also has the possibility of debt forgiveness. No minimum credit score is required, but it has a $40,000 income requirement.
Pros
- The interest rates are not subjected to market fluctuations.
- Open for borrowers with unfinished degrees.
- Loan forgiveness after 25 years is typically given to those income-based repayment plans.
- Offers up to 24 months of financial hardship forbearance.
Cons
- No cosigner release
- Deferred repayment is specifically limited to 15-year repayment terms
- No associate degree refinancing
Laurel Road
Laurel Road provides a medical school loan program, so it is not a shock that it is the best student loan refinance lender for medical professionals on this list. It benefits borrowers who want to consolidate their federal and private loans into a single loan payment. Also, it offers additional discounts to almost all borrowers. The minimum credit score required depends on education level, while the required income depends on each applicant’s financial profile.
Pros
- Loan programs exist to help qualified medical students reduce their monthly payments during residency.
- No minimum income requirement.
- It offers 3-month economic hardship forbearance.
- No maximum loan amount.
Cons
- There are no refinance options for non-graduates.
- Limits refinancing to borrowers in eligible healthcare fields.
Earnest
Searching for the best lender that can offer customized loan repayment? If that’s the case, Earnest is the lender you are looking for. It offers a flexible repayment policy unmatched by other lenders. This means borrowers can pick a monthly payment that fits their budget. Also, they have the power to set their own repayment term. Ultimately, Earnest provides a unique underwriting approach that factors the borrower’s earning potential with a 680 minimum credit score required.
Pros
- No minimum income is required.
- Offers an option to skip one payment every 12 months.
- Provides customizable payments and loan terms.
Cons
- No cosigner release.
- There are strict requirements for unfinished degrees.
- Parents are not allowed to transfer loans to their children.
PenFed
If Laurel Road is great for medical professionals, PenFed is a good choice for parents who took on debt to put their children through school. In short, it is a lender that allows parents to transfer the debt to their children, given that they meet the lender’s underwriting guidelines. Of course, loan programs in PenFed are also great and fair.
Pros
- The cosigner release is available after just 12 on-time payments.
- Children can take over their parents’ loans, removing the obligation of payment.
- Spouses can refinance their student loans together.
Cons
- Bachelor’s degree required.
- No autopay discount.
Citizens Bank
Interestingly, Citizens Bank is one of the few top lenders that allow borrowers who still don’t graduate. It is not a requirement for borrowers to graduate in order to refinance. No degree is required, and Citizens Bank offers an interest rate discount of up to 0.50%. Loan amounts available for those with no bachelor’s degree range from $10,000 to $300,000 and higher for those with a graduate degree.
Pros
- No degree is required.
- The interest rate is available without undergoing a hard credit check.
- Offers up to 0.50% interest rate discount to existing customers.
Cons
- The maximum loan term is longer than 15 years.
- No forbearance limit is disclosed.
Takeaway
When deciding about refinancing your student loans, you should consider critical factors, including financial history, interest rates, repayment needs, and whether you qualify. As for choosing a lender, it will benefit you to pick the lender that offers the lowest interest rate if you want to save money on interest and a lender with a variable rate when you have the goal to pay quickly.
Life is unpredictable, so you must know if refinancing is really the right financial strategy for you. Keep in mind that refinancing is usually most suitable for those borrowers with strong incomes and job stability.