LendKey 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.

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LendKey is an online lending platform that, among other things, facilitates refinancing for student loans through partnerships with credit unions and community banks. So far, LendKey’s platform has funded $2.7 billion in loans for more than 87,000 borrowers. In this review, we’ll take a look at the pros and cons of LendKey’s refinancing loan product and some other things prospective borrowers should know before making a decision.

Ratings Methodology
Provider Rates & Terms Great For Get Started
Rates & Terms:

Fixed Rates: 3.49 - 8.36%

Variable Rates: 2.06 - 8.93%

Terms: 5, 7, 10, 15 & 20 years

Great For:
  • Low rates
  • No fees
  • Flexible term options
Get Started: Check Rate
  • Checking rates won't impact your credit score

Top perks

There’s a lot to like about LendKey’s refinancing loans. Here are some of the positive factors borrowers need to know about the platform:

  • Low APRs -- LendKey offers potential applicants rates that are competitive among the lender's online competition.
  • Autopay discount -- LendKey offers a 0.25% interest rate reduction for borrowers who agree to automatically make their loan payments from a bank account. This has become a pretty standard feature of refinancing loans but is still worth mentioning. (Note: The APRs mentioned earlier are inclusive of this discount.)
  • No fees -- LendKey doesn’t charge an origination or prepayment fee for its loans.
  • Flexible terms -- Borrowers can choose from five, seven, 10, 15, and 20-year repayment terms.
  • Federal and private loans -- Some other refinancing lenders are only able to refinance private student loans, but LendKey allows borrowers to refinance both types.
  • Soft credit pull -- LendKey allows prospective borrowers to check their APR offers without affecting their credit score.
  • Cosigners welcome -- Borrowers can apply with a creditworthy cosigner in order to improve their chances of approval and potentially lower their APR.
  • Deferment options -- LendKey allows borrowers to temporarily suspend payments in times of financial hardship.

What could be improved

While there’s an extensive list of things LendKey does well, it’s important to realize that there’s no such thing as a perfect lender. Here are some potential drawbacks that could make another option more appealing:

  • Must have a degree -- In order to be eligible for refinancing, you must have completed an associates, undergraduate, graduate, or doctorate degree from an eligible school.
  • Excellent credit needed for low APRs -- LendKey’s advertised lowest APR is quite low, but the best rates are reserved for applicants with near-perfect FICO® Scores of 830 or higher and only to those who request a five-year loan term.
  • No stated APR range -- Many lenders state an APR range, that is, the lowest and highest APRs borrowers can expect. LendKey doesn’t do this.

How to refinance

The process for applying is rather easy. Simply use LendKey’s quick pre-qualification form to find your APR offer. If you decide LendKey is right for you, accept your loan offer and complete the full application.

It’s worth noting that while there’s no hard credit pull involved with checking your rates, there will likely be a hard credit pull if you choose to move forward and apply.

When it makes sense to refinance with LendKey

LendKey is an excellent lender for borrowers who prefer to give their business to credit unions and smaller banks as opposed to large financial institutions. Its loans can be a great choice for student loan borrowers who have completed their degrees and have excellent credit scores, and who want flexibility when it comes to repayment.

Alternatives to consider

If you have federal student loans, it’s often not a great idea to refinance them at all. Refinancing specifically refers to using a private lender to obtain a new loan, and quite frankly, federal student loans are superior to their private counterparts in several key ways. For example:

  • Federal student loans can potentially qualify for Public Service Loan Forgiveness (PSLF) and teacher loan forgiveness. Private loans aren’t eligible for these programs.
  • Borrowers can enroll in income-driven repayment plans with their federal student loans. Income-driven plans allow borrowers to cap their monthly payments at a certain percentage of their discretionary income.
  • It’s generally easier to defer payments on a federal student loan if you experience financial hardship. To be fair, some private lenders do have deferment programs, but most aren’t quite as flexible as federal student loans.
  • If you have subsidized federal loans, the government pays your interest while in school or on a qualified deferment. By refinancing these loans, you’ll lose the government interest subsidy, which could be a big difference if you eventually go back to school.

If any of these things apply to you, it’s probably a good idea to leave your federal student loans as they are, or look into a Direct Consolidation Loan, which retains the benefits of federal loans.

And finally, if you’re sure that you want to pursue a private refinancing loan, be sure to check your rates with several of the best student loan lenders before you choose one. Many lenders (including LendKey) allow you to check your APR on refinancing loans with no effect to your credit score, so there’s no good reason not to do some shopping around and doing so could save you hundreds of dollars (or more) in interest.

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