One of the best parts of blogging over the last seven years is watching the development of an entire industry that didn’t even exist when I started blogging. Back in 2011, nobody could refinance their student loans. You were stuck with what you took out in medical school until you got them paid off, which usually started at 6.8% for federal loans and was as high as 8-10% for private ones. This was a huge difference from when my class graduated in 2003 and every one refinanced at 0.9%. When combined with the rapidly rising cost of tuition, it was deadly. Thankfully, private companies stepped into the breach beginning in 2013 and have been serving young doctors and other high-income professionals ever since. In this post and for the New Year, I wanted to do a post that not only provided a broad overview of what was currently available in this sphere, but also give you the chance to compare and contrast the various companies.
The companies listed in this post are all partners with The White Coat Investor and each of them offers a special deal to WCI readers if you go through the affiliate links on this page. They have all refinanced dozens or even hundreds of satisfied WCI readers. They have sponsored the scholarship, the Financial Bootcamp email course, the forum, the podcast, and other endeavors we have undertaken here trying to boost financial literacy among professionals. I’m grateful for their support. But I don’t expect you to refinance with them out of a sense of gratitude for what they’ve done. I expect you to refinance with them (if appropriate for you) because it’s a heck of a good deal, and it almost always is.
For this post, we asked each of these companies to answer three questions:
- What is new with student loan refinancing at your company in the last year that our readers should know about?
- What do you see as your company’s strengths over its competitors?
- Which of your competitors do you admire most and why?
That last question was just for fun, but I thought the answers were interesting. Most dodged the question (often quite creatively and entertainingly) and others named multiple competitors. I’m going to include the provided answers to those questions and also a few brief comments on each company of my own. Special thanks to our assistant editor Jill for all of her work on this post.
This year, Earnest has been on the move—both moving to a bigger office in downtown San Francisco as well as opening a second location in Salt Lake City as we grow. In October, we partnered with Navient as an independent subsidiary.
Earnest is very different from any other student loan refinancing company. First, we allow borrowers to design their own loan based on the monthly payment that best works for them. For example, if your ideal monthly student loan payment is $600 or $850, we can design a loan around what you need. We know for new doctors this can be really helpful in the early days of figuring out personal finances. Most other lenders, simply drop you into a predetermined term of five, 10, or 15 years or more. We also stand out with our in-house servicing. Every Earnest loan is serviced for the life of the loan by our own team. We have worked with thousands of new MDs and understand your specific concerns.
As a company, we have always admired First Republic Bank because they have an incredible commitment to customer service—as does Earnest.
Earnest wins the award for actually answering the questions they were sent. What stands out most about Earnest in my view is just how flexible their loan options are. You can pick the term, you can pick the payment, whatever you like. You want a 4 1/2 year loan? No problem. You even get a little lower rate than you’d pay with a 5 year. That flexibility can allow you to make your finances really efficient.
Student Loan Refinancing: We recently launched Student Loan Refinancing for Medical Residents, where eligible medical residents and fellows can keep their student loan interest from compounding over the course of residency (up to 54 months), and only make $100 monthly payments during residency or fellowship.
In May we launched SoFi Wealth, the first low-cost online wealth management platform to combine an easy-to-use online and mobile interface with unlimited access to live, licensed financial advisors, giving people the guidance they need to understand, define, and then work toward achieving their investing goals.
SoFi’s benefits go beyond our competitive rates, easy-to-use platform, and speedy turnaround times for funding – we also offer exclusive access to numerous membership benefits including career coaching, networking events, and complimentary financial advising.
We think that student loan debt is a problem that needs solving, and we’re glad to see more and more attention being paid to this space. Ultimately, our product isn’t right for everyone, so we’re glad that we have competitors who can serve those in need.
The thing I like most about SoFi is that YOU like SoFi. Over the years, more of you have refinanced with SoFi than with all of the other companies on this page. They are the big player in this space, a position they’ve earned through innovation, low rates, excellent service, and a commitment to promotion through partnerships like this one with The White Coat Investor. New for 2017? A true resident refinancing program.
First Republic Bank
A lower minimum loan amount: As of September 2017, First Republic now refinances student loans starting at $40,000. To learn more, visit firstrepublic.com/student-loan-refinancing
First Home Program: For clients that have their refinanced their student loan debt with us, we offer attractive rates for buying a first home including an 85% Loan-to-Value program with no PMI
First Republic Bank offers clients the opportunity to refinance their student loan debt with fixed rates as low as 1.95% APR, which are among the lowest rates in the country. Each client also receives their own personal dedicated banker, ready to help with everything from day to day banking activities to guiding them through home ownership.
We are glad there are options available for individuals to refinance their student loans that live outside of our core markets.
More than any of the other companies on this page, First Republic seems to be looking for a long-term relationship with you. They want to do your checking, your savings, your mortgage etc. As a result, they offer very good rates on the student loan refinancing product. In fact, if you qualify, they are often the best. Unfortunately, due to their limited geographic reach, most WCI readers don’t qualify. But if you live in California, New York City, Boston, Greenwich CT, Portland OR, and Palm Beach FL, be sure to include them in your search.
* For all loan terms and conditions, visit www.firstrepublic.com/student-loan-refinancing.
Refinance with First Republic Bank by contacting my banker Kerry Berchtold at 339-235-0419 or [email protected] and let her know you were referred by WCI to get $200 back.
2017 has been a big year for CommonBond. As a company, we crossed the milestone of funding $1.5 billion in refinanced student loans, helping tens of thousands of members save money. We also introduced a unique refinancing benefit for doctors, whereby doctors can refinance their loans with a job offer that starts in the next year. This means they can defer their balance for 12 months while they finish their residency or fellowship, but use their future income to get the best rate on their new loan.
Since day one, our goal has been to set ourselves apart by designing a better student loan experience, combining advanced technology with competitive rates (doctors who refinance with CommonBond save over $50,000 on average) and award-winning customer service from our Care Team. But perhaps most importantly, we remain the first and only finance company with a “one-for-one” social mission: for every loan we fund, we also fund the education of a child in need. To date, we’ve donated more than half a million dollars to Pencils of Promise, and invite CommonBond members to join us each year on a trip to Ghana to see our Social Promise in action.
We remain inspired by the federal government’s programs that support public service borrowers — and we strongly encourage doctors to see if they qualify for PSLF before looking into refinancing.
CommonBond has been with WCI for years now and I have yet to get a complaint about customer service. Their social mission is pretty unique among their competitors. They also refinance Parent Plus loans. They have a particularly high refinancing limit- $500,000 that sets them apart from their competitors. They also have a unique “hybrid” loan, with a fixed rate for 5 years and then a variable rate.
LendKey was focused on improving the student loan refinancing process for our borrowers and working with our network of 275+ not-for-profit lenders to make available loan products even more competitive in 2017. To make the application process easier, LendKey released a major mobile update so applicants can check their rate offers in minutes on their mobile devices and automated the collection of some necessary documentation to reduce paperwork. Loan products also got an upgrade as more lenders joined our platform offering larger loan maximums (up to $300k for medical professionals) and longer term options (like 20yr repayment) to keep monthly obligations low for risk averse borrowers.
LendKey sits in a unique position in the student loan refinance market as a provider of access to hundreds of community lenders across the country. Borrowers get the best of both worlds at LendKey, including the ability to rate shop across various lenders in a few minutes, not having their information shared with any external party, and working directly with LendKey from application until final payment. Not-for-profit lenders found on LendKey also offer unmatched benefits such as interest only repayment plans, cosigner release after 12 on-time monthly payments, lower cost of funds to offer the most competitive rates, the largest unemployment protection in the market at 18 months, and more.
As a digital origination and loan comparison platform, LendKey doesn’t directly compete with any single lender, so we admire and respect each one’s attention to the issue of high-priced student loan debt and their commitment to making that debt more manageable.
Lendkey is unique in this space in that they go out to hundreds of local credit unions and banks to try to get you the best possible deal. Their primary value is that they do the shopping around for you. While they have some similarities to Credible, there are even more available financial institutions, although most are very small.
From working on new product development, to getting publicly listed on the Australian Stock Exchange, and tons of great milestones in between, we’ve had quite a busy year. We’ve launched a marketplace for credit cards and have added a number of new lenders to help deliver transparency, choice and savings to our users.
Those additions include resident-specific refinancing as well as products with no cap on the amount eligible to be refinanced to better help medical professionals reduce the cost of their student loans.
Going to any one lender limits your options to that specific lender’s product suite and underwriting criteria. With Credible, you can receive personalized, pre-qualified rates from up to 10 lenders in just 2 minutes. This is all accomplished without impacting your credit score and without sharing your data with any lender until you’ve picked the loan option that is right for you.
We’re inspired by the fact that marketplaces are growing fast which creates more value to people with student loans; we believe a thriving category is good for all brands.
The big deal with Credible is convenience. With a single application, you can apply with multiple companies and organizations and have them compete for your business, like Kayak or Orbitz. The downside? Many of the best lenders (including most of those on this page) aren’t on their platform. That’s no reason not to include them in your search, as they give you access to a bunch of the smaller lenders in one convenient package, but unfortunately they can’t function as the one-stop shop we would all like them to be for refinancing.
In July, Splash launched our refinance product for medical residents and fellows that not only offers a low fixed interest rate but also one of the most flexible repayment structures on the market – Up to 84 months of loan payment deferment for those in training. Splash also launched a promotion with the White Coat Investor to provide up to $1,000 cash back for those who refinance through the site.
Not only do we cater only to medical professionals, but we are focused on educating and empowering educated financial decisions rather than making a profit on every client. For some clients refinancing may be the right choice, but for others that may be REPAYE or PAYE.
Commonbond because they have been able to make social giving core to who they are and we have similar goals as a company.
Splash wins the award this year for being most responsive to White Coat Investor readers. They were new to us in 2017 and when they first hit the market, they had an origination fee. WCI forum participants never hold back on their true opinions of something, and they were particularly harsh about that fee. To Splash!’s credit, that fee was rapidly removed. They are one of four companies offering a true resident/fellow program and have the lowest required payment ($1 a month) for that program. They also have, at least potentially, the highest cash back offer for WCI readers to refinance through them.
At Education Loan Finance, our goal is to empower our borrowers to take control of their student loan debt through solid advice and relevant information that works. Our management team has over 30 years of experience in student lending and is backed by SouthEast Bank – not some online start-up company. We are also able to offer some of the lowest interest rates available in the industry.
Education Loan Finance’s Personal Loan Advisors are individually dedicated to each of our borrowers every step of the way throughout the refinancing process. Our Personal Loan Advisors work diligently to find the right loan product for our borrowers and have direct lines of communication with our customers if any questions should arise. There is no need for our borrowers to have to explain their situation over-and-over again. We know our customers and pride ourselves on our individualized customer service.
The competition should all be admired for offering hard working successful college graduates with student loan refinancing options that are “empowering a brighter future”.
Southeast Bank wins the award for best dodge of almost ALL of the questions. They are new to WCI readers in 2017, but offer all of the usual options: loan terms from 5-20 years, variable and fixed, competitive rates, lend in all 50 states, no pre-payment penalty, and excellent service (no complaints to me in 2017.) They do have a hardship deferment program, although it is at their discretion. They also have a very low minimum loan ($15,000).
In late 2017, LinkCapital lowered interest rates for both of our loan programs, resulting in interest rate reductions of up to 1.15% for some borrowers. In conjunction with the decrease in loan rates, Link also made improvements to our medical resident loan program structure so that the post-training interest rate reduction that we provide is now automatic.
Our exclusive focus on medical professionals allows us to meet the unique needs of physicians, residents, fellows, and dentists alike. Link borrowers have often said that the level of hand-holding provided throughout the entire refi process is unparalleled and that our team, senior management included, was available to help if any questions arose.
We very much respect Commonbond’s social promise.
Link Capital is great in that they just do student loan refinancing; no hassle, no fuss. No fees or penalties or need to open a bank account. They also offer a resident program with automatic continuation if you go into a fellowship AND your co-signer (if any) is let off the hook in the event of your death or disability.
In 2017 we evolved from DRB Student Loan to Laurel Road, a Division of Darien Rowayton Bank in order to align with our mission to help determined professionals achieve their goals with our tailored financial services and superior customer service. Laurel Road serves customers in all 50 states and to date, we’ve saved our borrowers a cumulative $400 million by funding over $3 billion in loans. On average, medical professionals save $28,000+ over the life of their loans with Laurel Road, with no application, origination, or prepayment fees.* Click here for more information.
Our customers continue to benefit from our status as an FDIC-insured bank. This designation provides Laurel Road with a low cost of capital and thus the ability to provide some of the lowest interest rates in the marketplace to our borrowers. Further, as a leader in the industry, we understand and value healthcare professionals and therefore create unique repayment programs tailored to your unique financial situations. For example, our resident and fellow refinancing program remains best-in-class with a $100/month payment option during training.
We admire all of our competitors’ desire to help young professionals reduce the cost of their student loan debt and ultimately benefit our nation’s healthcare system.
Laurel Road deserves accolades primarily for their pioneering efforts in the student loan refinancing space. Not only were they the first after the Global Financial Crisis to offer this service to indebted professionals, but they also provided the first true resident product. While being the first to do something often means you have to work out the kinks, their new focus and Laurel Road rebranding has also come with an enhanced ability to provide top-notch customer service. You know when you refinance with Laurel Road that hundreds of WCI readers have paved the way for you over the last 5 years.
I hope that overview of the 2018 student loan refinancing landscape is useful to you. The most important thing for those who need to refinance their loans is to actually refinance your loans. If you’re not going for PSLF, and don’t need or don’t benefit from the federal income-driven repayment programs, then get off your duff and refinance. Then get serious about paying them off. As nice as these companies are, you don’t need them moving into your basement permanently any more than Sallie Mae.
What do you think? Have you refinanced your loans? Who did you use and why? Would you like to see more in-depth reviews of each of these companies on the blog this year? Whose answers impressed you most? Comment below!
Fixed 3.75% - 7.03%
Fixed 3.89% - 7.89%
Fixed 5.23% - 8.97%
Fixed 5.10% - 8.93%
Fixed 3.39% - 6.69%
Fixed 3.899% to 7.979%
Fixed 3.20% - 6.25%