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LendKey Review: Refinance Your Student Loans For Lower Rates With Community Banks

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If only your student loans weren’t eating up such a big portion of your paycheck every month. You could,

Although unfortunately there’s no magic genie that will make your student debt disappear, there is a way to adjust your monthly payments and save money on interest — student loan refinancing.

Not only could refinancing snag you a lower rate, but it also lets you select new repayment terms that better match your budget. But with hundreds of banks offering to refinance your student loans, how do you know where to start?

One of my favorite services is LendKey, a student loan refinancing marketplace that matches you with offers from credit unions and local banks. Since it works with small institutions, LendKey can show you some of the best offers out there.

Curious to learn more? Read on for this full LendKey review to see if LendKey student loan refinancing could be right for you.

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LendKey review: What is LendKey, anyway?

LendKey is a student loan refinancing marketplace that partners with hundreds of community banks and credit unions to bring you refinancing offers. All you have to do is enter your information once, and LendKey will show you a variety of offers instantly.

By using LendKey’s platform, you can see a lot of offers at once without very little effort from your end. And since the banks are competing for your business, rather than the other way around, you can feel confident you’re seeing strong offers with low rates.

As of the time of writing, LendKey’s partners offers variable interest rates starting at 2.67% and fixed rates starting at 3.49%. These rates are lower than the current federal student loan interest rates (5.50%), and are likely much lower than the rate you got on a private student loan.

Note that not everyone is going to qualify for the lowest rates. You need strong credit and a decent income to qualify (or a cosigner), as this criteria shows the lender you’ll be able to pay your loan back on time.

But fortunately, you can check your rates with LendKey without worrying about a hard credit check. LendKey will collect a few pieces of information and show you prequalification offers, so you can see your rates without dinging your credit score.

Now that you get the gist of the LendKey student loan refinancing platform, let’s take a closer look at the pros and cons of using LendKey.

Pros of refinancing student loans through LendKey

What are the main benefits of using LendKey’s student loan refinancing platform? Here are the top perks.

Shows you offers you might not see anywhere else

LendKey doesn’t partner with big banks or giant financial institutions, but rather with community banks and credit unions. Without LendKey’s platform, you might never see these offers from spots like the Navy Federal Credit Union or your local bank.

By going through LendKey, you’ll see offers from smaller institutions that you might not come across on your own.

Competitive interest rates

After LendKey reviews your information, it will show you what interest rate you could qualify for. As mentioned above, variable rates start at 2.67% and fixed rates start at 3.45% (you can choose which one you prefer).

Let’s say, for example, you owe $30,000 at a 6.8% rate with a 10-year term. If you qualified for a 3.45% rate on a 10-year term, you could save $5,914 on your debt!

Instant prequalification rate quote that uses a soft credit check

Some banks want to gather all your information and run a hard credit check before showing you a student loan refinancing offer. And hard credit checks can hurt your score.

But LendKey only runs a soft credit check to prequalify you for offers, so you can compare them without harming your score and with no commitment.

If you see one you like, then you can submit a full application and consent to a hard credit inquiry to finalize the process.

Choice of flexible repayment terms between 5 and 20 years

Saving money on interest isn’t the only perk of refinancing your student loans. You also have the chance to select new repayment terms and adjust your monthly payments.

Let’s say you’re making a decent income and want to move up the timeline on debt repayment. You could choose a short term of five years to get out of debt ahead of schedule. Although your monthly bills might get higher, you’ll be out of debt sooner and pay less interest.

On the flip side, maybe your bills are too burdensome right now, and you need more money in your bank account from month to month. If this is the case, consider a long term of 15 or 20 years.

Although you’ll be in debt longer and pay more interest overall, you could cut your monthly payments way down. And you can always throw extra payments if and when your income increases to speed up repayment.

Crunch the numbers to see what your monthly payments would be on each term, as well as how much interest you’d pay overall. Since LendKey’s partners offer terms of 5, 7, 10, 15 or 20 years, you have the flexibility to choose a repayment schedule that works best for you.

Zero prepayment or origination fees

None of LendKey’s partners will charge a fee for disbursing your refinanced student loan. Nor will you get penalized for prepaying your loan ahead of the term you agreed to. So you don’t have to worry about any hidden fees or costs related to refinancing.

Option to refinance with a cosigner

Let’s say LendKey reviews your information and decides your credit score or income aren’t strong enough to qualify for student loan refinancing. Or maybe you can qualify on your own, but you’re not getting the lowest rates.

LendKey lets you add a cosigner to your application to boost your chances. Note that a cosigner becomes just as responsible for the loan as you are, so make sure you and your cosigner are on the same page about who’s paying off the debt.

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Cons of using the LendKey student loan refinancing marketplace

Now that you have a sense of the pros of refinancing with LendKey, let’s take a look at some of its cons.

You won’t see every offer out there

LendKey partners with local banks and credit unions, many of which provide low rates and strong customer service. But it doesn’t partner with every refinancing lender out there, so you won’t see every offer under the sun.

For instance, you might prefer to go with another marketplace, such as Credible, or an online lender, such as Earnest or SoFi. Before going with one of LendKey’s recommendations, it could be worth doing extra research outside the LendKey platform to see if you can get an even better offer somewhere else.

You should still research lenders before signing on the dotted line

LendKey’s platform shows you offers, but LendKey isn’t providing the loan itself. So if you see an offer you like, you should then head to the lender’s website to research more details and read customer reviews.

Although LendKey simplifies the loan shopping process, this extra step might add a little more work to your busy day.

No obvious disclosure of maximum interest rates

Finally, LendKey highlights its minimum interest rates on its website, but it doesn’t clearly show its maximum rates. It could be useful to see this information so you know the minimum and maximum rate you could get.

While LendKey doesn’t state this information upfront, you can find out by checking your rates, a process which just takes a minute or two.

How to refinance your student loans with LendKey, step by step

The LendKey platform is easy to use, but let’s take a quick look at how to check your student loan refinancing rates. After heading to LendKey.com, you’ll start by clicking on “Refinance Student Loans” (LendKey also offers private student loans). Then click on “Apply.”

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Next, you’ll enter basic personal information, such as your name, address, income, loan amount, and the school you attended.

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After you fill it out, LendKey reviews your information and shows you prequalification offers. You can filter your offers based on your preferences. Maybe you only want to see loans with a 10-year term, or limit your offerings to ones with a fixed rate, for example. You’ll use this easy slider tool to make it so.

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Remember that prequalification isn’t full qualification; you’ll only get fully approved after submitting a complete application. This isn’t a very tough process, but you will have to upload some paystubs, loan statements, and that kind of thing.

That said, this rate quote will give you a sense of your offers so you can decide whether moving forward with student loan refinancing could be beneficial for you.

Attention: Read this before refinancing your student loans

Refinancing has a number of perks, including saving money on interest and restructuring your debt. Plus, you can combine multiple loans into one, thereby simplifying repayment.

But you want to be careful about refinancing federal student loans, as refinancing with a private lender turns your loans private. As a result, your loans are no longer eligible for federal programs, such as Public Service Loan Forgiveness or income-driven repayment plans.

Some private lenders offer temporary forbearance if you lose your job, but not all of them are so flexible if you’re having trouble repaying. So if you’re not confident about your ability to repay your loan, you might want to hold off on refinancing until you are. Or at least, you could refinance your private loans for lower rates, but leave your federal loans alone.

Although it’s easy to focus on what you’d gain through student loan refinancing, don’t forget to learn about what you could lose, too, so you can make the right decision for you.

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LendKey review: Final thoughts

Ultimately, LendKey is an easy-to-use platform that helps you review multiple student loan refinancing offers at once. By offering a prequalification check, it lets you compare deals without dinging your credit.

And it shows you low-interest deals from local banks and credit unions you might not know about otherwise. Even if you don’t go with LendKey in the end, it’s definitely worth checking your rates through this platform.

By shopping around, you can find the lowest rate on a refinanced loan and save the most possible money on your student debt.

By |2019-03-12T16:14:13+00:00March 12th, 2019|Manage your money|