Every year, around this time, I start to get more inquiries from recent grads that are looking for the best place to refinance student loans. These are the overachievers (or the ones most worried about their student loan balance) since many law students are busy studying for the bar during the summer.
A few years ago, it used to be easy to get the best deal for refinancing your student loans. You choose one of a couple of companies, refinanced your loans and then moved on. In 2018, there are so many different companies now vying for your refinancing business. All of this competition has been great for you, the consumer, since the companies are forced to keep their rates as low as possible to win your business. It’s so competitive that the student loan refinancing companies will pay you a cashback bonus!
If you’re looking for a quick bullet point list of how to get the best deal when refinancing your student loans, here’s what I recommend:
- Get the lowest rate. It may take you more time to shop around, but when you owe over $100,000 (like many lawyers), the rate matters a lot. Even a 0.10% difference is significant.
- Shop around. You don’t have to apply to every company, but you need to apply to at least 2-3 to get a sense of your rate. Each company uses different factors to determine your rate so that you might be surprised by the difference between them. Don’t assume that all companies will offer you the same right.
- Get a cashback bonus. Want an additional $300, $400 or $500? Take advantage of the cashback bonuses that I’ve negotiated for Biglaw Investor readers (plus, when you refinance through our links you’ll have access to the customer service agent that works with lawyers, so if you need anything special we can work together with them).
- Refinance again later. Because there are no fees associated with the refinancing companies listed below, there’s no reason why you can’t refinance again later if you think you’ll be able to get a better rate later. Many readers refinance once during their first year after law school and then refinance again later after they’ve had a year’s worth of income.
Here’s the list of companies
First Republic Bank continues to offer better rates than you’ll find anywhere else, starting at 1.95%. What’s also great about First Republic is that if you qualify, you’ll get their advertised rate. There is no bait and switch. The 1.95% rate is offered on loan terms of five years. If you want an extended payoff period, the rate will go up, but it will still beat anything you can get from their competitors.
In addition to the lowest rate on the market, First Republic will also rebate the interest that has been paid against the loan, up to 2% of the original loan balance if the loan is paid in full within 48 months. How’s that for an incentive to pay off your loans?
How does FRB offer such low rates? It’s a loss leader for them. They’re looking to build a long-term relationship with you and know that lawyers are attractive customers with many financial needs. They’re willing to take a bet that you’ll be won over by their superior customer service that you’ll become a client for life. That’s why they offer the 2% prepayment rebate as well – since they’re losing money on the loan they want you to repay it as soon as possible.
First Republic only lends in a few locations (California, NYC, Boston, Greenwich, Portland and Palm Beach FL) but luckily many lawyers are eligible because they’re working in those markets.
If you refinance by contacting by banker Kerry Berchtold at 310-772-1986 or [email protected], you’ll get $200.
CommonBond continues to be a strong player in student loan refinancing, with a couple of unique features like handling Parent Plus loans and offering a “hybrid” loan that is fixed for five years and then variable for the last five years.
CommonBond also has an active social mission at the core of their business which is attractive to a lot of borrowers (for every loan they fund, they also support the education of a child in need via Pencils of Promise in Ghana).
They’ve been with the Biglaw Investor for over a year now, and I’ve yet to hear a complaint about working with them. I’ve helped several people one-on-one through the CommonBond process, so feel free to reach out to me if CommonBond is one of the providers you’re considering.
If you refinance with CommonBond through our link, you’ll get $400 cash back.
I’ll be honest. When Navient acquired Earnest at the end of 2017, I thought it might be the end of Earnest as we know it. With a competitive refinancing market, not every company on this list can survive forever. To Navient’s credit, they seem to be allowing Earnest to run as an independent unit, so unless you knew that Navient acquired Earnest, I’m not sure you would notice.
Getting access to Navient’s financial backing has done wonders for the rates that Earnest can provide to borrowers and Biglaw Investor readers are consistently finding great rates with Earnest and refinancing each month, so it looks like Earnest is here to stay.
Another reason why readers seem to like Earnest is that they let you set your exact minimum monthly payment rather than throwing you into a 5, 7, 10, etc. year loan. I could see how this would be helpful if you had a specific budget in mind. In other words, your term is going to be matched precisely to the minimum payment you’ve selected, and you’ll get a rate that reflects that. For example, if you pick a payment that has your loan paid off in 6 years, you’ll get a rate that is higher than the five-year term rate and lower than the seven-year term rate.
If you refinance with Earnest through our link, you’ll get $300 cash back.
Laurel Road is the student loan refinancing face of one of the original players in the market, Darien Rowayton Bank. I’ve always been impressed that the folks at DRB were one of the first to recognize the vast market that exists to refinance student loans. Thanks to the early start they’ve handled over $3 billion in student loans.
Like some of the other companies that are backed by a bank, Laurel Road has access to DRB’s status as an FDIC-insured bank and therefore can get capital cheaply in the market, which means lower interest rates for you.
If you refinance with Laurel Road through our link, you’ll get $300 cash back.
Many readers like using Credible because they quickly pull rates from up to 11 lenders, like Citizens Bank. They’ll even pull rates from companies on this list like Earnest or Splash Financial. Many people have compared Credible to the “Kayak” of student loan refinancing since you’re able to get a good look at many different providers. If I were refinancing my loans today and I wasn’t eligible for First Republic Bank, Credible would be on my list of the 2-3 providers to check rates since they’ll give you a lot of data on the market. Of course, they are missing a bunch of the providers on this page so you can’t just rely on Credible but will need to try a couple of different providers.
Credible also doesn’t have a cap on the amount of money that can be refinanced, which is helpful for those lawyers with incredibly large student loan balances.
If you refinance with Credible through our link, you’ll get $300 cash back.
Splash Financial is a relative newcomer to the scene. One of the best things about Splash is their instant rate checker (without having to start an application). You can get a quote without requiring a hard or soft pull on your credit report. So long as your information is accurate (i.e., that the credit score you say you have is the same as the credit score they pull when you complete an application), you’ll get the advertised rate.
The fact that you have a JD is taken into consideration when calculating your rate since they have data showing that lawyers are more likely to pay back their student loans.
If you refinance with Splash Financial through our link, you’ll get $500 cash back.
Education Loan Finance (ELFI) is backed by SouthEast Bank, an institutional bank in Tennessee. They aren’t just a fintech startup company, and with real deposits to back up their loans, they can offer low rates for customers that want to refinance their student loans.
In addition to the $350 cashback bonus I negotiated with them, they’re eager to get you to close on your loan as soon as possible. If you do so within 30 days of receiving an offer, you’ll get an additional $100 (for a total of $450) through their Fast Track Bonus.
If you refinance with ELFI through our link, you’ll get $350 cash back plus $100 if you refinance within 30 days.
LendKey is entirely different from the other student loan refinancing companies on this page. They take your numbers and work with hundreds of local credit unions and bank to find the best rate for you. While similar to Credible, LendKey mainly works with small financial institutions so there’s not a lot of overlap between the rates you’ll get on Credible and the rates you’ll find on LendKey. If you’re interested in finding a credit union to work with, LendKey is the platform for you.
If you refinance with LendKey through our link, you’ll get $300 cash back.
Let’s talk about it. What are your refinancing stories? What rates are you actually getting when you refinance?