Laurel Road Student Loan Refinancing Review
Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice, and in 2017 he received the SABEW Best in Business Award.
Laurel Road is a private lender that offers a variety of student loan products, including newly-originated student loans, parent loans, in-school loans, and student loan refinancing.
In this review, we’ll dive into Laurel Road’s refinancing loans. Here’s what prospective borrowers need to know about Laurel Road’s refinancing loans, and some other information to keep in mind as you begin the refinancing process.
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Rates & Terms:
Fixed Rates: 3.5 - 7.02%
Variable Rates: 3.23 - 6.65%
Terms: 5, 7, 10, 15, 20 years
There’s a lot to like about Laurel Road’s refinancing loans and the company’s platform in general. Here are some of the key reasons you might want to consider Laurel Road for your refinancing needs:
- Federal and private -- Laurel Road can refinance federal and private student loans. Some private student lenders will only refinance private loans.
- Soft credit inquiry -- Laurel Road allows prospective borrowers to check their APR without affecting their credit score, a very useful tool for comparison shopping.
- Term choices -- Laurel Road allows borrowers to choose from five different loan term lengths -- five, seven, 10, 15, or 20 years. This isn’t the most flexible of any private lender, but many competitors offer just two or three choices.
- Cosigners welcome -- Laurel Road allows borrowers to apply with a creditworthy cosigner if they choose to do so.
- No fees -- Laurel Road has no application, origination, or disbursement fees. There’s also no prepayment penalty if you decide to repay your loan early.
- No maximum -- Laurel Road doesn’t have a maximum refinancing loan size. As long as your qualifications justify the loan, the maximum you can borrow is only limited by the amount of student loan debt you have to refinance.
- Forbearance options -- If you experience a financial hardship while repaying a Laurel Road refinancing loan, you may be eligible for a forbearance where you’ll make either partial payments or none at all for one or more three-month periods. In all, you may be able to get a total of 12 months’ worth of forbearance over the term of your loan.
- Autopay Discount -- Borrowers get a 0.25% interest rate reduction if they pay their loan automatically from their bank account. This is a pretty standard feature and is reflected in the APR ranges discussed in this review.
- Competitive APRs -- Laurel Road offers competitive rates compared to online competitors. However, it’s important to mention that in order to get the lowest rates, you’ll need stellar credit and will need to commit to a repayment term of five years. Interestingly, Laurel Road’s APRs tend to max out significantly lower than other competitors, so this could be an excellent option for borrowers with less-than-ideal credit who are likely to be placed in the higher end of their appropriate APR range.
What could be improved
There’s no such thing as a perfect lender for everybody, and if there is, I certainly haven’t found it. With that in mind, here’s when borrowers might want to consider alternatives:
- Must have a degree -- Laurel Road only lends to applicants who have completed their degrees and also have special requirements for borrowers with Associate degrees. If you took out student loans but didn’t graduate, Laurel Road is not an option for you.
- No in-school deferment -- You can’t get an in-school deferment on a Laurel Road loan if you decide to return to school to pursue a graduate or professional degree. Some competitors offer deferments, so if you might go back to school, you may want to consider one that has this feature.
What to look for when refinancing student loans
As you can probably imagine, the most common reasons to refinance are to save money on interest and to lower the monthly loan payment. So APR and loan term lengths are obviously two key factors to consider.
In addition to these, it’s important to consider other factors such as:
- Deferment/forbearance options
- Ease of applying
- Discounts for autopay and other things
- Origination and prepayment fees (or the lack thereof).
How to refinance with Laurel Road
Laurel Road’s application process is quick and easy. The first step is to fill out the online pre-approval form to check your interest rates, which shouldn’t take much more than a couple of minutes.
If you decide to move forward, you’ll proceed with the online application and upload information about yourself and the loans you want to consolidate. Then Laurel Road will provide your finalized APRs and loan terms, and you’ll sign your loan documents electronically. Your loan proceeds will be sent directly to your existing lenders.
Alternatives to consider
First, if you have federal student loans, it might not make sense to refinance your loans with any private lender. Federal loans have some big advantages, such as eligibility for Public Service Loan Forgiveness (PSLF) and income-driven repayment plans. By using a private student loan to refinance your federal loans, you’ll lose these benefits.
In addition, it’s important to shop around before settling on a refinancing lender. Different financial institutions offer different features and have different underwriting standards, so your APRs can vary significantly from one lender to the next. Since most refinancing lenders allow you to view your rates and terms without a hard credit pull, there’s no good reason not to compare some of the best student loan lenders before you decide on one.
This is right for you if:
Laurel Road has competitive rates and an easy application process, so it is a good place to consider for anyone looking to consolidate their student loans with a private lender. It can be an especially smart choice for people with less-than-ideal (but still good) credit histories, as it offers some of the lowest maximum APRs in the industry.