The class of 2016 graduates have the most debt in U.S. history. More than 41 million Americans owe more $1.2 trillion in student debt. Even worse, over a quarter of student loans are delinquent. (Source) The state of student debt is grim. But what can you do to save money on your student loans?
You can save thousands of dollars by refinancing your student debt for a new loan with lower interest rates and better terms. The problem is that most graduates hate banks. Seventy one percent of millennials would rather go to the dentist than listen to what banks are saying. (Source) So we are keeping things simple.
To save you time, SuperMoney has reviewed the best online student loan refinancing companies. We have also partnered with LendKey, a student loan refinancing marketplace that connects borrowers with more than 300 credit unions and community banks.
Best student loan refinancing companies
Fill out one form and LendKey LendKey can match you with the credit union or community bank with the lowest-cost refinancing loan available. Once you have a list of candidates, use SuperMoney’s student loan comparison database to check expert and consumer reviews of each lender.
SoFi is the largest lender in the student loan refinancing sector. It has helped more than 190,000 borrowers finance more than $15 billion in student loans since it was launched in 2011 by four Stanford MBA students. According to SoFi, borrowers save an average of $17,210 over the life of their refinance loans.
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Instead of only focusing on your credit score and history, Upstart considers your education, area of study and job history when determining rates and eligibility. Upstart has originated over 40,000 loans since it was founded by ex-Googlers in 2012.
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CommonBond is a New York-based company that was founded by three Wharton MBAs in 2011. It has low interest rates and flexible loan terms. Its hybrid loan combines the benefits of fixed- and variable-rate loans. It’s a good choice for borrowers who want to repay their loan fast but don’t want to be tied down to a 5-year loan. According to CommonBond, the average savings of a refinance is $14,600 over the life of the loan.
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When building our top picks for best student loan refinancing companies we focused on the following features:
– Low Rates
– Origination fees
– Prepayment penalties
– Selection of loan types
– Flexible terms
– Eligibility Requirements
– Accepts federal and private loans
Who should refinance their student loans?
Borrowers who are locked in high-interest loans should consider refinancing. Let’s say you have a $100,000 student loan with a 10-year term and a 6% APR. If you refinance it for a 3% APR loan, you would save $17,352 ($144.6 a month) over the life of the loan.
The catch is, only borrowers who have good credit, stable incomes, lucrative careers, or co-signers will qualify for the best rates.
Shop around, compare, and negotiate to find the best deals available. SuperMoney’s student loan comparison engine makes it easy to compare terms and see what other borrowers think of lenders.