Top Banks for Refinancing and Consolidating Your Student Loan 2019

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The Burden of Student Debt

Millions of Americans across the United States are weighed down by student loans. It is estimated that more than 40 million Americans are dealing with student loan debt, and with high interest rates, it will be very difficult for the majority of students to pay off these loans anytime soon. However, there are options out there to help students of all ages pay down their loans. The two most common methods for alleviating debts are refinancing and debt consolidation.

But what does it mean to refinance or consolidate a student loan? Let’s breakdown what these terms mean and look at some of the top banks to get the job done in 2019.

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What Is Student Loan Refinancing?

Essentially, refinancing means acquiring a replacement loan with varied terms. For instance, if you have a student loan with a high interest rate, you can acquire a new loan with a lower interest rate. In most cases, students can refinance both federal and private loans.

You might be wondering how students can simply acquire better terms for a loan. It is actually a pretty simple process. In essence, a third-party lender evaluates a given loan and offers to completely pay off the existing loan, in order to replace it with a new, lower interest rate loan. This is great for students, as it can potentially save them thousands of dollars in interest payments over the course of their loan.

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Who Can Refinance Student Loans?

You may be interested in refinancing your student loans, but how can you qualify? Generally, lenders will look at the following metrics to determine your eligibility:

  • Credit Score – Your credit is one of the most important factors that lenders use when you apply. In general, lenders will look for a credit score of at least 650-680 to consider you for refinancing; the higher your score, the better your chances of getting approved. A high credit score signals to lenders that you have a history of paying your bills on time.
  • Annual Income – Much like a high credit score, a healthy income shows lenders that you have the funds to make monthly payments. If your income is low, it will be harder for you to secure good refinancing terms because the monthly payments may be higher than you can reasonably afford to pay.
  • Savings – If you lose your job or have fluctuations in your income, banks will want to know that you have backup funds to help make payments. Savings also signal to lenders that you are responsible with your money, and thus more likely to make your monthly payments on time.
  • College Degree – Lenders generally want to know that you have either finished your studies or are currently enrolled in a school before approving your refinancing application.

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Is Refinancing Right For You?

Generally, refinancing a student loan is a great way to make debt more manageable and help save you a lot of money. However, not everyone is eligible for refinancing. Additionally, even if you do qualify for a low-interest loan, there are a few things you might want to consider before making a decision.

First and foremost, it is important to think about how the terms of the loan will change. The biggest differences exist between federal and private loans. When you refinance a student loan, you are automatically taking on a new private loan. If your existing loan is private as well, then this is probably not an issue. However, if you are currently paying down a federal loan, you will lose out on a few important benefits that are specific to federal student loan programs, specifically:

  • Loan Forgiveness – Not every student loan is eligible for loan forgiveness, but some do qualify for forgiveness programs. For example, there are various federal programs that will erase some or all student loan debt for teachers. Learn more about Loan forgiveness programs right here.
  • Income-Driven Repayment (IDR) – IDR plans stretch out the life of your loan, while also lowering your monthly payments based on your income. This is especially useful for people with low or inconsistent income.
  • Loan Deferment – When you defer your federal loans, you postpone making payments for a set period of time without accruing any interest. It is common for students to take advantage of loan deferment programs when they finish school, as it may take some time to find a job.
  • Loan Forbearance – Loan forbearance is often confused with loan deferment, and they are quite similar, though there is one important difference. With loan forbearance, you still postpone payments for your federal loan, but you do not get the benefit of postponing interest as well. You are still responsible for paying the interest that accrues during the postponement period. This is why, in most cases, loan deferment is the preferred option.

The benefits listed above can be invaluable to many students struggling to pay down their federal student loans, so it is important to do a cost-benefit analysis before agreeing to refinance your student loan.

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What Is Student Loan Consolidation?

Consolidating student loans refers to the act of combining multiple loans into one. While student debt consolidation does not generally save you any money (and sometimes it can even increase the amount you pay in interest), it does simplify your loans by placing multiple loans with varied terms into one, simple monthly payment program.

It is important to note that federal and private student loans can be both be consolidated, however, federal loans can only be combined with other federal loans, and private loans can only be combined with other private loans. This is due to the fact that federal loans have special low interest rates that are not available to most private lenders.

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Who Can Consolidate Student Loans?

Whether you have federal or private student loans, your lender will generally look at the same criteria that they would consider if you want to refinance: credit score, annual income, savings, and college degree/certificate of enrollment. If you don’t qualify for debt consolidation now, you might qualify down the road if you can increase your credit score and savings.

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Is Consolidating Right For You?

When most people consider making changes to their student loan debt, they immediately consider refinancing as their first and best option; after all, refinancing student loans can end up saving you thousands of dollars over the long-term. However, debt consolidation does have its benefits, and in some cases, refinancing and consolidating can be combined to help save money and simplify student loans.

Let’s take a look at the pros and cons of consolidating to determine if student loan consolidation is right for you:

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The Pros of Debt Consolidation

  • For students who either have multiple loans through various federal programs, or multiple private loans with varied terms, consolidation can greatly simplify your student loan debt
  • Rather than having to make several payments per month and remember different due dates, consolidation allows for one simple monthly payment
  • If you’re struggling to make your current payments, consolidation can lower your monthly payments by extending the life of your loan
  • If you want to consolidate federal loans, it may grant you access to income-driven payment options, as well as loan forgiveness programs
  • Consolidation gives you the ability to change variable-rate loans to a fixed interest rate

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The Cons of Debt Consolidation

  • Generally, debt consolidation increases the length of your loan, meaning that you will potentially pay much more in interest over the course of the loan
  • When multiple loans are combined, the outstanding interest is added to the principal balance of the new loan, which means that the interest going forward will accrue on a higher balance
  • Consolidating multiple loans means that you could end up losing certain benefits, such as principal rebates, interest rate discounts, and loan cancellation benefits
  • For federal loans, you could lose your accumulated credit for payments made toward loan forgiveness plans

As you can see, there are a lot of different factors to consider when choosing between refinancing, consolidating, or simply continuing with your existing student loans. Refinancing is generally best for those who want to save money over time with lower interest rates, and are not concerned about losing federal loan benefits. Alternatively, consolidating is best for people who want to simplify their student loans and make lower payments each month, even if it means extending the life of their loan.

So, now that we have covered the basics of student loan refinancing and consolidation, it’s time to look at the best banks to help you restructure and manage your student loan debt in 2019:

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Top Banks for Refinancing and Consolidating Your Student Loan 2019


Earnest specializes in low-interest rate loans, and is a great option for students in need of refinancing or debt consolidation. Currently, Earnest’s variable APR ranges from 2.43% to 7.21%. Additionally, they offer restructuring plans for both private and federal loans, with terms ranging from 5-20 years. You can learn more about refinancing or consolidating student loan debt with Earnest right here.

Laurel Road

Laurel Road makes it easy for students to secure loans and restructure debt with just a few clicks. As of 2019, Laurel Road offers variable APR ranging from 2.43% to 6.65%. Just like Earnest, their plans apply to both private and federal loans, and they provide both fixed and variable loans. However, their loan terms are a little more rigid, with only 5, 10, 15, and 20 year plans.


LendKey has a wide array of online services, from student loan refinancing to home improvement loans. According to their latest offerings, LendKey has variable APR ranging from 2.44% to 6.87%. For LendKey, it doesn’t matter if you are an undergraduate or graduate, they can find a restructuring plan that fits your needs. They offer refinancing terms of 5, 7, 10, 15, and 20 years.

Education Loan Finance

Education Loan Finance is a relatively new company, but they still offer some of the best debt restructuring plans and rates on the market. For example, with Education Loan Finance, you can get a variable APR as low as 2.43%, and a fixed APR as low as 3.39%. They also provide refinancing with term lengths of 5, 7, 10, 15, or 20 years. You can learn more about refinancing or consolidating student loan debt with Education Loan Finance right here.

Splash Financial

Splash Financial not only provides low rates, but also allows you to check and compare your rates without affecting your credit score. Their variable APR starts at 3.05%. While this isn’t as low as some of the other lenders on this list, they do have fixed APR ranging from 3.75% to 7.03%. Additionally, Splash Financial offers a wide range of refinancing and consolidation packages.


U-Fi is one of the best options for students who don’t meet the traditional refinancing requirements set by other institutions. For example, U-Fi offers refinancing for students pursuing Associate Degrees, which many other lenders do not. Additionally, U-Fi can provide loan restructuring for up to a 25 year term, which can greatly reduce monthly payments. Their rates are also competitive, with variable APR starting at 2.49%, and fixed APR ranging from 3.70% to 5.82%.

Citizens Bank

Citizens Bank is great for those whose income does not meet the standards of some other lenders. To refinance or consolidate your student loans with Citizens Bank, you only need a minimum annual income of $24,000. What’s more, they offer restructuring plans on loans up to $350,000, with relatively low rates starting at 3.89% (fixed) and 2.93% (variable). 

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June 21, 2019


Matthew is an experianced FiGuides writer and researcher.  He holds B.A. in Philosophy from the University of Georgia and enjoys taking a deep dive on personal finace projects. Protection Status