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The decision to refinance a student loan involves applying for a new loan to pay off your current student loan, but it’s important to shop and compare multiple offers, including banks and credit unions, before you settle your lender.
If you already have an account with a bank, then the bank can be a good choice. You may receive a discount on loan interest. Choosing a local bank can also provide more personalized services.
Five banks to refinance student loans
If you are considering refinancing your student loan, here are five banks that will help you get started with your search.
How to refinance student loans at a bank
If you refinance your student loan at a bank, you will go through the same process as an online lender.
- Shopping:First, we start by comparing interest rates for multiple companies. This should include banks and other lenders.
- Prequalification: With most student loan refinancing companies, you can get fee estimates with soft credit checks, making the comparison process simple and risk-free.
- Apply online: Once you have decided on a lender, you can apply directly through the website. You need to provide information about yourself, your school, and your student loans. Once you submit your application, the lender will perform a credit check and ask you to provide documents such as pay stubs and copy of your driver’s license.
- Don’t drop your old loan payments immediately: The lender will pay off the existing loan directly, but will have to continue paying until it is confirmed.
5 banks that won’t refinance student loans
Most banks do not offer student loan refinances.
- US Bank: The bank has completely finished its student loan program.
- Chase Bank: Tracking student loans were sold to Navient.
- Sally May: Sallie Mae operates under Sallie Mae Bank and does not offer student loan refinance.
- rise: Ascent focuses on undergraduate and graduate degrees student loans, along with career training like Boot Camps. They raise funds through several banks, but do not offer student loan refinance.
- Abe: ABE raises funds through a bank doctor, but does not provide student loan refinance.
Is there a difference in refinancing with a bank or other lender?
When it comes to refinancing student loans, options tend to be limited in terms of banks available. Only a handful of banks offer student loan refinances. You may also be able to find online student loan lenders to refinance your loan.
That said, we will compare prices, terms and other terms between the bank and other lenders. You can make the best decision on your student loan and determine if a refinance makes sense.
Why a few banks refinance student loans
Student loan expert Mark Kantrowitz says that many large banks are small segments of their business and don’t create or refinance private student loans. It also comes with additional regulations, such as private student loan disclosure requirements.
Kantrowitz points out that many large banks stopped refinancing private lending and student loans after the end of 2010. The loan program guaranteed much larger loan volume and profits, so the end result was little incentive for major banks to offer student loan refinance products to such a limited market.
Some major banks see car loans as an easier way to contact recent university graduates, he says. Other banks with large online presences include credit cards and credit cards and Personal loan.
Conclusion
Refinancing your student loan has its benefits, but you need to approach this step carefully. Refinancing federal student loans with private lenders means losing access to benefits such as income-driven repayments and tolerance.
If you are refinancing, get offers from multiple lenders, including banks and credit unions. If you have an existing relationship with the bank, you may be able to get a better deal on refinancing your student loan.
