According to the recent statistic reports, the average graduate student in the US has $30000 debt balance. Of course, this is not a small amount, so it takes years to pay it off. Student debt has a significant impact on your future life such as income, other credit options, mortgage or retirement savings, etc. That is why you need to manage your student debt balance effectively and efficiently such as evaluating repayment plans, looking for student loan forgiveness and so on. In this case, one of the best options you can use is to refinance and consolidate student loan. However, this process could vary for federal loans and private student loan. There is a massive number of banks which refinance and consolidate student loans with different conditions and variable rates. In this article, we are going to evaluate the three best banks which offer the most reasonable conditions to refinance and consolidate student loans.

What is refinance and consolidation of loans?

Consolidate Student Loans

Before going into the details, let us first explain the definitions of student loan consolidation and refinance.

Loan consolidation – generally speaking, loan consolidation is combining different kinds of loans under one program with almost the same (weighted average) interest rates. You have two choices for student loan consolidation. First – Federal Student Loan Consolidation (with Government), second – Private Loan Consolidation (with the private lender). There is a considerable difference between these two options. But there is one thing to remember that Federal Student Loan Consolidation does not cover all type of student loan; it has a limited number of participants.

Loan refinance – the central principle is almost the same with loan consolidation. The main differences are that when you refinance a student loan, the interest rate could change, If you have a good credit profile and you have made your payments regularly, you could get reduced interest rate while refinancing of loans.

Best three banks to Refinance and Consolidate Student Loans

Loans industry is quite large and there a wide range of servicer agencies, private lenders and banks in the market. A different number of banks offering student loan consolidation services with different terms and conditions. However, no borrower thinks the bank as a perfect one to consolidate student loans. It is because various banks have been specialized in the different direction of service related to loan consolidation. For example, some banks offer better term alternatives, some banks provide flexible repayment plans, or some banks have customer-friendly eligibility requirements.

SOFI – is considered one of the biggest student loan refinancers which offer many options. This bank allows you to combine several student loans (including both federal and private loans together) under one loan. If you cooperate with Sofi, you are going to be a member which allows you to take benefit of a massive number of additional services. And this includes financial adviser, career coaching, special discount for other options of loans, etc.

Disadvantages:

Consolidate Student Loans

  • Requiring credit score – Unfortunately, Sofi demands the borrower to have at minimum 650 FICO credit score to be eligible.
  • Unlike some other refinancers, if you use co-signer, then your co-signer will be responsible for your loan until you have completely paid out.

Eligibility requirements;

  • Only graduate students may qualify
  • Both federal and private loans could be consolidated
  • Undergraduate and postgraduate students from Title 4- accredited schools are eligible
  • There is co-signer option available
  • Preapproval quote check is accepted
  • Active through all the states of America
  • At least 650 credit score is required
  • You must work or have a job offer which starts in three months ( or must have another income)

Loan terms – SOFI offers fixed and flexible interest rate options; however, if you choose an auto-pay option, you will get a 0.25% cut on the interest rate. The loan amount starts with a minimum of $5000, and there is no upper limit. The minimum point of loan periods is five years, but it can increase up to 20 years.

LendKey

Consolidate Student Loans

Actually, LendKey doesn’t participate as a lender. It is just an organizational network of many banks and credit unions altogether. Lendkey provides a comprehensive list of refinancing services including customer support and loan services. To avoid tons of searches for banks or other private lenders, you can use the list offered by Lendkey. Through their offering, you can find the best option that reflects your preference for the refinancing of loans.

There is one drawback of student loan consolidation with Lendkey,  so you may require to be a member of the credit union which may be challenging due to limited place.  

Eligibility requirements:

  • The required minimum credit score is 600.
  • Required minimum credit history is three years
  • You must earn at least $24annual income
  • Both graduates and undergraduates may eligible
  • Both federal and private loan may qualify
  • Co-signer may be required, but you can release the co-signer after 1 or 3 years regular payment

Loan terms – Likely SOFI, LendKey also offers fixed and flexible interest rate options; however, if you choose an auto-pay option, you will get a 0.25% cut on the interest rate. Minimum and maximum loan period are ten years. There is one more reason to consolidate student loan with Lendkey, so they offer flexible repayment options which include in-school payments available. If you could prove financial hardship, you may be eligible for student loan forbearance and deferment.

Earnest

This is another popular bank to Consolidate Student Loans.  Earnest differentiates from its competitors by offering very flexible borrower eligibility terms and conditions. Your credit history is also taken into consideration while refinancing process. With offering flexible repayment options, Earnest allows you to make several payments each month and to leave out a payment every 12 months without penalty in the occasion of keeping good standing.

One of the main disadvantages of Earnest is that co-signer is not accepted which makes some borrowers unable to be eligible.

Eligibility requirements:

  • The required minimum credit score is 650
  • Required maximum DTI is 50 percent
  • Required minimum credit history is three years
  • You must earn at least  $35000 annual income
  • Only graduate students  
  • Graduates and undergraduates from Title-4 accredited schools  may eligible
  • Both federal and private loan may qualify
  • There is no co-signer option
  • Not available in some states of US

Loan terms

Consolidate Student Loans

Earnest provides fixed and flexible interest rate options; however, if you choose an auto-pay option, you will get a 0.25% cut on the interest rate. The loan amount starts with a minimum of $5000 and may increase up to $500000. The minimum point of loan periods is 5 years, but it can rise to 20 years. Besides, if you could prove financial hardship, you may be eligible for student loan forbearance and deferment.

The other banks

There is no doubt that we can enhance this list as long as enough. However, if you would like to get high-customer service, then Education Loan finance could be your the best choice. Otherwise, if you are looking for the best APR, then take a quick look at Splash Financial.

These three banks we mentioned above ranks in the top places in the list to consolidate student loans. To make a wise decision about Student Loan Consolidation and Refinance, it would be better to take your time and evaluate the options and compare them to each other. If you would like to learn more about Student Loan Consolidation, please do not hesitate to call Student Loans Resolved Helpline.