While Bank of America student loans and student loan refinancing are not directly available, the bank does offer a few solutions that can be used to manage student loan debt. Here’s what you should know about Bank of America student loan refinancing.
Bank of America’s expired student loans
Bank of America has provided both federal and private student loans in the past.
Federal students with the Bank of America
Previously, when students were awarded a federal financial aid package, they could select Bank of America to service their loan.
It provided funding for government initiatives such as Stafford Loans, PLUS loans, Graduate PLUS loans, Federal Consolidation Loans, and the Federal Family Education Loan Program (FFELP).
Now, federal loans are issued directly through the U.S. Department of Education’s Direct Loans Program.
Bank of America private student loans
As for private loans, borrowers could get two types: loans certified by the school and loans that were not.
Certified loans included private student Loans and Bank of America TERI loans. Uncertified loans included CampusEdge Student Loan and the Education Maximizer Loan. Now, all Bank of America private loans have been suspended until further notice.
If you currently have a Bank of America student loan and are looking to refinance it, or if you are looking to the bank to help you refinance student loans from other lenders, here are a few options through Bank of America.
Bank of America student loan refinancing options
There are currently no personal loan or student loan consolidation options from B of A, but the following loan products could assist with refinancing or consolidating.
Cash out refinance
If you have equity in your home, you can use it to get a loan.
Bank of America offers a cash out refinance option, where you can pay off your first mortgage and take out the remaining available equity in cash. This cash can then be used to pay off your student loans.
Casey Fleming, Author of The Loan Guide: How to Get the Best Possible Mortgage, says this option is good if your existing mortgage has room to improve. He adds that you can typically borrow 85% of your home’s value, and interest rates can be variable, fixed, or fixed and then variable.
Often, the rate for a loan, which is secured by your house, will be lower than an unsecured loan. The catch is that, if you fall behind on payments or if you default, it puts your home at risk for foreclosure.
Additionally, this option comes with closing costs similar to a regular mortgage and an origination fee.
Home equity line of credit (HELOC)
A home equity line of credit is another option for home owners. With this route, you typically keep your existing mortgage in place and get the HELOC in addition to it. Fleming says that the amount you can borrow is limited to a percentage of your current home’s value, up to 90% in most cases.
HELOC’s have draw periods, typically of 10 years, in which you can withdraw from your credit line as needed. Payments of principal and interest will begin during the draw period.
After it ends, you will no longer be able to withdraw funds and will have 20 years to repay the balance.
Again, the downside with this option is that your house secures it. It offers an advantage over the cash out refinance because it has little to no closing costs.
Balance transfer credit card
The downside with this option is that the credit line will limit how much you can refinance. Also, the interest rate will jump up after the introductory period.
If you can pay off the balance within the introductory period, this can be a good way to save on interest for a little over a year.
Bank of America student loan refinancing: Final verdict?
Bank of America does have options that can be used for student loan refinancing, but they are not ideal. None of their products are specifically designed for student loan refinancing, and all of them have significant downsides.
So, let’s look at a few of the top lenders who can help you refinance your student loans.
Five alternatives for student loan refinancing
The following lenders specialize in student loan refinancing, providing solutions specifically tailored to the situation.
First up is LendKey, an online marketplace that connects borrowers with a network of credit unions and community banks. These smaller institutions often offer low interest rates and borrower-friendly terms.
Another great option is CommonBond. It offers competitive rates, programs for payment assistance, and helps drive social good with every loan it finances.
All of these lenders offer consolidation for federal and private loans. And all of them have easy online applications, which allow you to pre-qualify without hurting your credit score. With this ability, you can shop around with multiple lenders and find your best rate without hard inquiries showing up on your credit report.
Find your student loan refinancing solution
In conclusion, Bank of America has dropped out of the student loan sector for now. Whether that will or will not change in the future, only time will tell.
The good news is, there is still a wide range of companies offering student loans and refinancing. To review lenders, compare rates, and read unbiased user reviews, head over to our student loan refinancing page.
Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.