When you’re looking for the best way to refinance your student loans, online lenders typically offer the best rates and features. That’s because, unlike traditional banks, they don’t have high costs that come with brick-and-mortar branches, allowing them to offer more competitive features.
Citizens Bank is a traditional bank, but it surprisingly offers rates and features that can compete with the best. Read on to learn about Citizens Bank eligibility requirements, rates, features, and the application process.
About Citizens Bank
Established in 1828, Citizens Bank is one of the largest financial institutions in the U.S.
With 1,200 branches and more than $151 billion worth of assets, the bank has a solid financial foundation. It is headquartered in Providence, Rhode Island and offers competitive terms to those who qualify for student loan refinancing.
Citizens Bank began offering student loan refinancing in 2014. On its website, it claims that its customers have saved an average of $1,584 per year by refinancing with the Citizens Bank.
Who are Citizens Bank’s student loans designed for?
Although Citizens Bank offers great features, it’s not easy to qualify to refinance your student loans with them. The bank targets people with good to excellent credit and a decent income.
You’ll need to have a credit score of at least 680. What’s more, you must have an annual income of at least $24,000.
Meeting those minimums won’t guarantee that you’ll get the best interest rate, though. The better your credit history and the higher your income, the better your chances are of being approved.
As with other student loan refinancing lenders, Citizens Bank requires you to be a U.S. citizen or permanent resident.
Citizens Bank: Student loan refinancing review
As an established bank and lender, Citizens Bank offers rates and features that are worth considering. Refinancing your student loans is a great way to lower your interest rate, monthly payment, or both.
“For many recent graduates, refinancing a student loan is necessary to afford everyday expenses”
“For many recent graduates, refinancing a student loan is necessary to afford everyday expenses,” says Katie Ross, education and development manager at American Consumer Credit Counseling (ACCC).
“A 2013 ACCC survey found that 77% of respondents had outstanding student loans that have held them back from pursuing financial milestones such as living independently, buying a home or a car, and saving for retirement.”
With several repayment terms to choose from and low fixed and variable rates, Citizens Bank gives you more control over your student loan repayment plan.
What are Citizens Bank’s student loan refinance interest rates and terms?
Citizens Bank offers both fixed and variable interest rates.
Fixed rates are usually a bit higher because they don’t change over time. Variable interest rates are good for people who plan to pay off their loans in the next few years. Otherwise, the interest rate may go up beyond what you can afford.
Be careful about choosing a fixed or variable interest rate. Interest rates, which are set by the Federal Reserve, are likely to increase, which could be harmful to your debt repayment plans.”
“Be careful about choosing a fixed or variable interest rate,” says Ross. She adds, “Interest rates, which are set by the Federal Reserve, are likely to increase, which could be harmful to your debt repayment plans.”
See our Citizens Bank review page for current rates.
Here are some other terms for Citizens Bank student loan refinancing:
- Can refinance both private and federal student loans.
- You must be currently employed to qualify.
- No origination fees or prepayment penalty.
- Current repayment periods of five years, 10 years, 15 years, and 20 years.
- You can refinance between $10,000 and $90,000 for undergraduate debt and up to $350,000 for graduate debt.
What is Citizens Bank’s student loan refinancing eligibility criteria?
Citizens Bank requires that you have a credit score of at least 680 to qualify, even without a cosigner. If your score doesn’t meet that minimum, consider a lender like CommonBond, whose minimum score requirement of 660 is slightly lower.
The bank also has a minimum annual income requirement of $24,000. That said, the higher your income, the better.
Citizens Bank will consider your debt-to-income ratio (DTI) during the application process. This number is calculated by dividing your monthly debt payments by your monthly gross income.
A lower DTI means you can take on more debt without feeling stretched too thin so that the lender will view you as less risky and you’re more likely to get a lower interest rate.
What extra features does Citizens Bank offer?
Although Citizens Bank offers competitive interest rates, other features of its student loan refinancing program make it even more appealing.
Setting up automatic payments not only makes it easier to avoid forgetting to pay, but it can also save you money. Citizens Bank currently offers a 0.25% discount when you set up autopay.
To give you an idea of how much you could save, say you’re refinancing $35,000 worth of student loans on a 15-year term at 5.75% APR. Your monthly payment would be $291, and you’d pay $17,316 in total interest.
With the autopay discount putting your APR down to 5.50%, your monthly payment would be $286, and you’d pay $16,476 in interest.
With just one action, you’d save $840.
After you’ve made three years of on-time payments, Citizens Bank allows you to apply to have your cosigner removed from the loan.
The bank will run another credit check on you to make sure you can continue making the payments on your own. This feature can be a way to appease a cosigner who might be apprehensive about signing on for the full loan term.
If you lose your job or experience some other type of financial hardship, you can apply for forbearance on your loan payments. Citizens Bank offers up to 12 months worth of this benefit.
Interest still accrues on your loan while it’s in forbearance, so make interest-only payments in the meantime if you can.
How does Citizens Bank’s student loan refinancing application process work?
There are three steps to applying for student loan refinancing with Citizens Bank:
1. Get your rate
You can start the application process online, in a branch, or over the phone at 1-877-405-2262. If you choose to apply online, you’ll start by clicking on “Get My Rate” on the bank’s student loan refinancing page.
Citizens Bank will start by giving you a pre-approved rate by running a soft credit check. This won’t hurt your credit, but it does mean the bank needs a good amount of personal information to establish your identity. This includes things like your name, address, date of birth, Social Security Number, and how much you’re looking to refinance.
2. Review your offer
Next, you’ll get a preliminary offer based on your basic credit profile. Citizens Bank will also show you different options based on different repayment periods and type of interest rate. You can also change how much you want to refinance to see how the terms change.
If you like what you see, you’ll submit an official application. At this stage, you’ll need to provide some supporting documents for your income, as well as more information about your education and student loans.
Once you apply, Citizens Bank will process it and let you know your final offer.
Citizens Bank contact and reviews
If you have any questions about Citizens Bank student loan refinancing program, you can reach their customer service phone team 24/7 at 1-800-922-9999. If you’re already a Citizens Bank customer, you can also submit a secure message through your online account.
Should you refinance your student loans with Citizens Bank?
If you’re looking for the best rates and features, Citizens Bank should be on your list. But don’t be so quick to choose this bank just because we said so. “Before refinancing, weigh out your options,” says Ross.
Borrowers can choose to refinance through a traditional bank, credit union, or newer alternative lenders such as marketplace lenders.”
She adds, “Borrowers can choose to refinance through a traditional bank, credit union, or newer alternative lenders such as marketplace lenders.”
Continue doing your research and compare top student loan refinancing companies to see which ones offer worthwhile features. As you do the legwork, you can have the peace of mind knowing that you chose the right one.