Our policy at CollegeOnomics is to give you all the tools and resources so you can easily afford college with your own money and/or perhaps a few scholarships/ grants. So in most of our articles, we’ve highlighted the most affordable colleges in the US so you do not have to apply for any student loans.
But what if there was no other way and you ended up taking a student loan anyway? Then you’re perhaps now looking to refinance and thereby reduce your monthly student loan payments. To assist you with this process, we’ve built this review of the best student loan refinance companies in the US.
Why Refinance Your Student Loan?
You probably took out the student loan before starting college and now, after graduating from college and being in the work force for a few years, you credit score must have substantially improved. So it makes sense to refinance your student loan so that you can get a much better interest rate.
Refinancing will reduce the amount of money you need to pay monthly towards the student loan, so you can have more money for your other monthly expenses.
Interest rates are at their lowest currently and only keep going further down, so if you refinance now, you’re definitely looking at a much lower interest rate for your student loan than a few years ago.
Refinancing: What To Look For
The first thing we look for when refinancing is the interest rate. Other than this, here are a few other factors to pay attention to:
- Getting a Fixed interest rate loan is preferable to a variable rate loan due to the risk of a much higher variable interest rate in the future.
- Ensure that you pay down a portion of the principal on the student loan with each monthly payment. This will ensure that you have a faster closure of the student loan and don’t end up having a student loan to pay all your life!
- Take your time and read the fine lines in the refinance loan application multiple times before moving forward. In case of issues or questions, go over it with the loan officer to see if the issue can be resolved in your favor.
- Go with a loan provider you trust and who provides a good level of customer service. In case of doubts. you can always choose a different loan provider. Until you are comfortable with their terms and sign on the dotted line. you will have the freedom to shop around to get the best refinance deal possible.
- Most student loan refinancing companies require applicants to have completed the associate or bachelors degree for which they initially took out the student loan.
Education Loan Finance (ELFI)
- Company: Education Loan Finance
- Originating Bank : South East Bank
- Year Established: 2015
- Refinance Rate: Check Refinance Calculator
- Pros: Low Interest rates, Better customer service, No application/ origination/ prepayment fees
- Cons: Longer application process, Forbearance is harder, Minimum loan amount is $10,000
- Reviews (Trustpilot): 5 star (872 reviews)
- Our Rating: 4.5 (out of 5)
Education Loan Finance is a good finance company for refinancing your student loans. Their rates are mostly lower than competitors but you need to be diligent and check with them regularly for updates.
ELFI student loans are available all over the United States. Their customer service is known to be responsive and it’s best to contact them over the phone after submitting the application online.
The website appears a bit tedious and could delay the process sometimes. Loan companies usually provide a forbearance when a person is sick or needs some time to make their payment, but the forbearance is not easy to get with ELFI.
ELFI is also known to outsource some of their work or the customer service which may further delay the whole process. Some customers also state that ELFI requires much more documentation that the other loan providers, but the interest rates themselves appear to be much lower.
Also, if your parents are refinancing your student loans, those will have a much lesser time period for loan repayment than student-refinanced loans.
- Company: Laurel Road
- Originating Bank: KeyBank National Association
- Year Established: 2013
- Refinance Rate: Check Student Rates here
- Pros: Low Interest rates, No application fees, or origination fees or prepayment fees
- Cons: Customer service issues, Longer application process for some customers
- Reviews (Trustpilot): 4.5 star (283 reviews)
- Our Rating: 3.5 (out of 5)
Laurel Road is another loan company for refinancing your student loans. They generally offer lower interest rates but the application process can at times be tedious and can take several weeks to get an approval in some cases.
Their customer service appears good for some customers but there have also been several customers encountering bad customer service at Laurel Road. Some customers have reported that even setting up automatic payments requires considerable effort.
If you try to check the interest rates where it says Check your rate in 5 mins on their website, it directly brings up the online application. There is no payment calculator and this would be something good to have for many customers.
It appears that Laurel Road’s business has grown substantially from 2018 to 2019 without an increase in staff/employees, as customers report better customer service in 2018 than in 2019.
There appear to be more service reps who do not understand the loan specifics in adequate detail. This again suggests they perhaps might have a larger pool of lower-qualified temporary staff in the customer service department lately.
- Company: LendKey
- Originating Institution/s: Banks and Credit Unions
- Year Established: 2009
- Refinance Rate: Check Refinance Rates
- Pros: Low Interest rates, No application fees, Easy payment hold for forbearance
- Cons: Negative credit reporting for payment delays
- Reviews (BBB): A
- Our Rating: 3 (out of 5)
LendKey partners with many banks and credit unions to provide lower-interest rate loans to their customers. They are also accredited with the BBB (Better Business Bureau) and carry an A rating.
Upon looking at the customer issues and responses, it certainly appears that LendKey is a worthy refinancing lender for the student community.
However, it should be noted that LendKey expedites the processing of late payments to the credit reporting agencies and does not give sufficient time (in good faith) to the lender for receiving their payments.
In cases where you made the payment but they do not receive it in time, it is likely that this could get negatively reported in your credit report.
So it would be best to pay careful attention to all due dates and communication with LendKey and not miss any emails or phone calls with them. In case it goes to voice mail, be sure to call them back and promptly address their concerns at the earliest.
However, if you ever undergo temporary financial difficulties, just call LendKey and ask for a forbearance for a fixed period so they can put all payments on hold. By doing this, you will get the opportunity to re-start making your monthly payments after your economic hardships are over or reduced greatly.
Taking any form of loan is always a big responsibility. So if you had no choice but to take a student loan and are now considering re-financing or consolidating (combining) your student loans, then please be extra careful and alert.
Always read the fine lines with reduced fonts below most terms and paperwork. Pay close attention to the due dates for making your monthly payments and also try to pay additionally towards your loan’s principal amount.
At the time of taking the new loan, ask that more of your monthly payment be applied to the principal so that you are able to more quickly payoff your student loan in full.
Setting up auto-payments can reduce the monthly loan payments by about 0.25%. Auto-payments also reduce the additional burden on you and ensure that all your student loan payments reach the lender at the right time for every single payment without fail.
To summarize, here are the three top student lending providers we’ve listed in this article:
# 2. Laurel Road
# 3: LendKey
If you need a hand or have additional questions, please add your comments below and I’ll get back to you :))
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