5 Top Student Loan Refinance Companies in 2023

In the incredible journey of life, sometimes we need to backtrack and recalibrate our path, such as with student loans. Refinancing is the process of replacing one loan with another, one that has different rates and terms. 

It  can be crucial to reduce interest rates, lower your payments, or shorten your loan term. Here are some of the top lenders for student loan refinancing and some nifty tricks for traversing the refinancing seas. 

Top Student Loan Refinancing Lenders

1. SoFi

SoFi, short for Social Finance, has been making waves since its inception in 2011. They were one of the first companies to start refinancing student loans, and now they offer a whole suite of financial products. But let’s zoom in on their student loan refinancing option.

One of the major perks of SoFi is its competitive interest rates. As of 2023, these typically start at 4.99% for fixed rates and 5.74% for variable rates (with autopay). That’s a pretty good deal, especially when you compare it to the national average student loan interest rate, which has been hovering around 5.8%.

But it’s not just about the rates. What sets SoFi apart is the package of extra benefits they offer. If you refinance with them, you’ll become a SoFi member, which opens up access to a bunch of neat perks. 

• Unemployment protection: If you lose your job through no fault of your own, they’ll temporarily pause your payments and even help you find a new job. 
• No origination fees, prepayment, or late fees.
• Flexible terms to fit your budget.
• Career counseling and financial advisors.
• Member events.

One thing to keep in mind with SoFi is that they have a reputation for serving high-income borrowers with strong credit, so their underwriting standards might be a bit tougher. But don’t let that discourage you. They’ve helped a lot of students refinance loans.

2. Earnest

Earnest has been on the scene since 2013 and was later acquired by Navient, one of the big names in student loan servicing. Earnest is a maverick because they really do things differently in the lending world. 

What sets Earnest apart is their super flexible repayment options. It’s like having your own custom tailor for your student loan repayment plan. They let you adjust your payment amount based on your budget. You can even pick your payment due date and skip a payment once a year if needed. It’s like having a “get out of jail free” card in your back pocket.

As of 2023, APRs are pretty attractive too, starting at 4.96% for fixed loans and 5.15% for variable loans. Earnest deducts 0.25% as an auto-payment discount. 

Another cool thing about Earnest is that they don’t just look at your credit score to determine your eligibility and interest rate. They also consider your savings habits, career trajectory, and education. That’s a big plus for students with a shorter credit history.

3. Laurel Road

Laurel Road is a superstar in the student loan refinancing world. Started in 2013, Laurel Road, now a brand of KeyBank, offers financial services exclusively online. 

Now, what sets Laurel Road apart? They’ve carved a unique niche for themselves by offering some fantastic benefits for healthcare professionals, like doctors and dentists, with lower interest rates and payment flexibility during residencies. But don’t worry; they cover the rest of us too. 

As of 2023, they offer student loan refinancing rates as low as 4.49% and 5.24% APR, depending on whether you choose a variable or fixed rate, the loan term, and if you have a Laurel Road linked checking account. 

One thing to remember is that they have some eligibility requirements. For instance, you must have graduated from a select list of schools, but they’ve got over 2,000 on their list, so chances are you’re covered.

Another neat thing about Laurel Road is that they understand that life happens. They offer full economic hardship forbearance, meaning if you run into financial trouble, you can potentially pause your payments for a while. Plus, they provide a neat bonus – a $200 cash bonus with qualifying $2,500 direct deposits.

4. CommonBond

CommonBond has made a big splash in the lending pool since 2012 with a pretty cool idea. They wanted to lower the cost of student loans and make a difference in the world. Kind of like a superhero for students and society!

So, what’s the lowdown on their student loan refinancing? As of 2023, CommonBond offers interest rates from 2.72% to 6.11% APR. That’s a competitive range compared to the average student loan interest rate, around 5.8%.

But CommonBond isn’t just about competitive rates. They’ve got some standout features that really make them shine. One of these is their hybrid loan. It’s unique in the refinancing market and offers a fixed interest rate for the first five years, then switches to a variable rate for the rest of the loan term. This could be a great option if you plan to pay off your loan in less than five years.

Another thing to note about CommonBond is its social promise. For every loan they finance, they fund the education of a child in need. They partnered with Pencils of Promise, an organization that builds schools and provides education in developing countries. So, while you’re helping yourself save money, you’re also helping to make a difference in the world. Pretty cool, huh?

5. LendKey

LendKey started its journey in 2009 with a unique mission: to link borrowers with community banks and credit unions. They understand that big banks aren’t always the best fit for everyone, especially students trying to navigate the financial stratosphere. Think of them like a trusty sidekick, connecting you with the unsung heroes of the lending world.

The beauty of LendKey is its partnership model. Because they work with community banks and credit unions, they can often offer competitive rates. As of 2023, their interest rates are as low as 4.49% to 5.02% APR for student loan refinancing. 

But the perks continue beyond reasonable rates. One significant benefit of LendKey is that they don’t charge any origination fees or prepayment penalties. This means you can repay your loan early without any extra costs. It’s like getting a free pass to cross the finish line sooner.

And hey, while we’re talking benefits, LendKey also offers some unemployment protection. If you fall on tough times, they can help you by pausing your payments for a bit.

Should You Refinance?

Refinancing isn’t for everyone. If you’ve got federal student loans, you might lose certain benefits by refinancing, such as income-driven repayment plans or loan forgiveness options. However, if you have high-interest private loans, refinancing could save you a ton of money in the long run.

You can use the FAFSA student loan simulator to determine your savings should you decide it’s the right move. Below is an example of how much you could save with refinancing.