It can be super confusing to know what the best option is to refinance or consolidate your student loan debt. There are so many different lenders and banks - along with just as many programs - that it can be overwhelming.
Before we begin, it's important to understand the key differences in student loan refinancing and student loan consolidation.
Student Loan Refinancing - Getting a new private student loan to replace your existing loan and/or loans.
Student Loan Consolidation - Combining multiple Federal loans and/or private loans into one loan.
With all the student loan consolidation companies we're going to discuss, you can refinance and/or consolidate. You can also do some of your loans or all your loans.
It can be confusing to figure out what you should do, but in general, you shouldn't refinance Federal student loans unless you can afford paying your loans on the standard 10 year plan. But, if you can afford, refinancing can make a lot of sense financially.
If you already know that consolidation makes sense, and you're looking for the best places, we recommend Credible. Check out Credible and compare your options in 2 minutes with no credit check. Try Credible here. As a bonus, College Investor readers get a $200 bonus if they complete a refinance!
The Requirements To Consolidate Student Loans
The requirements to refinance student loans are a bit different than when you took out your loans. For Federal loans, you simply had to fill out the FAFSA. With some graduate school loans (such as medical school loans), you might have had to have a credit check beyond the FAFSA.
However, with private student loan consolidation, the requirements are more like getting a car loan or mortgage.
Lenders will typically look at:
If you don't meet all of these requirements, you might need to get a cosigner for your loan. Read this full guide on how to get a student loan with no cosigner.
Credible does offer loans with no cosigner for qualifying candidates.
Things To Consider When Consolidating
When you're looking at the best banks and places to consolidate your student loans, there are quite a few considerations. Every bank or student loan lender has it's unique perk or angle, and you have to take that into consideration when weighing your options.
However, in general, the big things to consider when consolidating your student loans include:
While there is no "right" or "wrong" loan type when it comes to your individual situation, we believe that most borrowers would benefit from a student loan consolidation loan that is only 5-7 years. Borrowers should look for loans that have no origination fees, and if a cosigner is required, there should be an easy cosigner release process.
However, every person has different needs and a different situation. Think about your loan needs accordingly.
1. Citizens Bank
Citizens Bank is one of the few banks on this list. We like them because they offer a lot of great loan options, backed by the stability of a bank.
Citizens Bank offers a variety of loan terms, including 5, 10, 15, 20 year repayment term options - as well as both fixed and variable rate loans.
Citizens Bank also has no application, origination, or disbursement fees, and they offer several loyalty programs where you can get an interest rate discount.
Furthermore, the do have a co-signer release program where a co-signer may be released from loan responsibility after making 36 consecutive, on-time principal and interest payments.
There is, however, a $10,000 minimum loan amount. This might not work for a borrower with a low loan balance.
2. College Ave
College Ave offers some unique student loan products and viable consolidation options. The company is a solid lender to who just recently started offering both fixed rate and variable rate student loans.
College Ave Refinance isn’t simply a consolidation company. When consolidating, you take several existing loans and combine them into one for lower monthly payments and, in some cases, lower interest rates. However, with College Ave, you can refinance a single loan to get better terms or lower rates. You can even refinance a loan as low as $5,000 and as much as $250,000.
They also allow some interesting repayment options, such as an interest-only payment, a deferred payment, and a fixed rate payment.
CommonBond is one of the first student loan consolidation companies. They offer both fixed and variable rate loans.
CommonBond also offers a unique unemployment protection program where loan payments are paused and it helps eligible graduates find new jobs - ever hiring them for short-term consulting projects.
CommonBond also take a unique giving approaching to it's lending - funding Pencils of Promise with every loan it consolidates.
CommonBond is also a no-fee lender.
Whether you’re trying to consolidate existing student loans at low interest rates, or you need a few thousand dollars in cash for the upcoming semester, Connext Private Student loans could offer the loans you want at favorable interest rates.
The Connext loan minimum is $2000 for in-school borrowers and $10,000 for refinancers. The maximum loan amounts are $100,000 for undergraduate borrowers, $150,000 for graduate students, $200,000 for MBA/law students and $250,000 for Medical School/Pharmacy borrowers.
Connext doesn’t have specific credit minimums posted, but they do require borrowers to be creditworthy (or have a creditworthy cosigner).
Earnest is on this list because it's one of the most flexible student loan consolidation companies - they offer the ability to pick any monthly payment and term between 5 to 20 years – saving you more than standard rates and terms.
They also give you the ability to change your loan – you can consolidate your loan for free, change payment dates, even skip a payment once a year and make it up later.
Earnest has no set income requirements for borrowers. They are also fee-free, and offer unemployment protection to pause your monthly payments if you lose your job.
6. Laurel Road
Laurel Road, formally DRB Student Loans, is an established student loan lender with a new name. Laurel Road really focuses on medical and dental graduates, but they have loan options that will work for any borrower.
They might not be the best, however, if you're not in one of those categories. If you do consider Laurel Road, make sure you take advantage of their $200 bonus offer!
What we like about them is that they are one of the few lenders that will refinance more than $300,000 in student loans. They will break it up into a second loan, but they at least will offer the service.
LendKey is a student loan consolidation lender that pools money from community banks and credit unions to offer well priced student loans to borrowers
LendKey offers loans between $5,000 and $300,000, depending on the degree earned by the loan holder. The lowest amount is for undergraduate degrees, which is capped at $125,000.
LendKey has neither prepayment fees nor origination (upfront) fees. That low loan amount is one of the lowest we've seen - which is one of the reasons they make our list. However, LendKey does not allow consolidation for borrowers who didn't graduate.
Rates are based upon your credit. Discounts are given for auto-pay.
8. PenFed by Purefy
PenFed is one of the newest additions to this list of the best places to consolidate student loans. The reason? The have some of the lowest student loan refinance rates we've seen, and they keep getting lower and lower. PenFed is also on the Credible platform, so that you can easily see how PenFed compares to the other top lenders out there.
PenFed offers loans up to $150,000, but you typically have to show strong earnings or have a cosigner that meets their requirements.
PenFed is also the only lender we've seen that does allow for spousal student loan consolidation - which is a unique option some may want to consider.
SoFi is another of the original student loan consolidation lenders - and probably the most well known. They offer a wide variety of fixed rate and variable rate loans, with 5, 7, 10, 15, 20 year repayment terms. SoFi even offers mortgages.
SoFi loans have no origination fees or prepayment penalties. SoFi also offers unemployment protection for borrowers, and even has a career support program.
To get the best rates, you have to have excellent credit or you'll have to have a cosigner for your loan. SoFi does have a cosigner release program.
10. Splash Financial
Splash Financial is a relative newcomer on this list, but they are doing great things with medical school student loan consolidation.
Splash Financial offers student loans with no original fees, and unique repayment plans. For example, they are offering $1 per month repayment options for doctors going through training.
However, they only offer loans between $25,001 and $346,000. That high minimum could be a challenge for some borrowers who would benefit from refinancing. But the high maximum is helpful for doctors.
The great thing is that Splash Financial is on the Credible platform, so you can quickly see how they compare to other lenders in minutes.
Student loan consolidation isn't for everyone. However, if you're able to afford your loans on the standard 10-year repayment plan, and don't plan to take advantage of any student loan forgiveness program, then you should strongly consider student loan consolidation.
These are the top student loan consolidation companies, and you'll strongly benefit from comparing your options amongst these lenders. Also, make sure that you're always paying attention to our list of the best student loan consolidation bonus offers.
To make it easy, we recommend using Credible. Check out Credible and compare your options in 2 minutes with no credit check. Try Credible here. As a bonus, College Investor readers get a $200 bonus if they complete a consolidation!
If you're not quite sure where to start or what to do, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.
If you love one of these companies - let us know and help other readers out!