10 things you should know about Laurel Road student loan refinancing

Laurel Road, a digital lending platform backed by KeyBank, specializes in student loan refinancing with competitive rates and unique perks for healthcare professionals. If you’re balancing monthly cash flow with total interest—or debating giving up federal protections like IDR and PSLF—this guide clarifies your options.

Refinancing is a significant financial move that can lower your interest rate or change your repayment timeline. However, it isn’t the right choice for every borrower. In this guide, you will learn about interest rates, eligibility requirements, the application process, and unique benefits for medical professionals. Here are the 10 key facts you need to know to decide if refinancing with Laurel Road fits your financial goals.

Context: how Laurel Road student loan refinancing works

Before diving into the specific features of Laurel Road, it is essential to understand what refinancing actually entails. Refinancing involves taking out a new private loan to pay off one or more existing student loans, which can be federal, private, or a combination of both. The goal is typically to secure a lower interest rate, reduce monthly payments, or simplify billing by combining multiple loans into one.

Laurel Road began as a fintech lender in 2013 with a specific focus on healthcare professionals but has since expanded to serve all qualified graduates. In 2019, it was acquired by KeyBank, a Fortune 500 company, combining the user-friendly experience of a digital lender with the stability of a major bank.

The most critical consideration for any borrower is the trade-off involved in refinancing federal loans. When you refinance federal debt with a private lender like Laurel Road, you permanently lose access to federal benefits. This includes Income-Driven Repayment (IDR) plans, Public Service Loan Forgiveness (PSLF), and generous federal forbearance options. For borrowers with stable incomes and strong credit who do not plan to utilize these federal programs, the potential interest savings from refinancing can be substantial. However, if you rely on income-based payments, sticking with federal options is usually safer.

Decision guide: is Laurel Road a fit for you?

Refinancing is a personalized decision that depends on your credit profile, career path, and financial stability. Use this quick checklist to see if Laurel Road aligns with your needs before spending time on the application.

1. Competitive interest rates and how they’re determined

Interest rates are often the primary driver for refinancing, and Laurel Road is known for offering competitive options. As of late 2024, they provide both fixed and variable interest rates. A fixed rate remains the same for the life of the loan, providing payment stability, while a variable rate may start lower but can fluctuate based on market conditions.

According to Laurel Road (accessed October 2024), variable rates are typically based on a market index like the Secured Overnight Financing Rate (SOFR). If this index rises, your interest rate and monthly payment will increase. Conversely, if the index falls, your rate may decrease. This makes variable rates riskier but potentially cheaper in the short term.

Your specific rate is determined by several factors, including your credit score, income, debt-to-income ratio, and the loan term you choose. Generally, shorter loan terms (like 5 or 7 years) come with lower interest rates compared to longer terms (like 15 or 20 years). Additionally, according to Laurel Road (accessed October 2024), the lender offers a 0.25% rate discount if you enroll in automatic payments from a bank account, which helps reduce the total cost of borrowing.

According to Mark Kantrowitz, financial aid expert, “Private loans can offer variable interest rates, which may be lower than federal fixed rates initially.” This potential for lower rates is why many borrowers with high-interest Direct Unsubsidized or PLUS loans consider refinancing once they have established good credit.

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2. Flexible loan terms and repayment options

Choosing the right repayment term is just as important as securing a low interest rate. Laurel Road offers a variety of term lengths to help borrowers balance their monthly budget against total interest costs. Typically, borrowers can choose from loan terms of 5, 7, 10, 15, or 20 years.

There is a direct trade-off when selecting a term:

• Shorter Terms (5-7 years): These usually carry the lowest interest rates and result in the lowest total cost over the life of the loan. However, they require higher monthly payments, which can impact your monthly cash flow.
• Longer Terms (15-20 years): These options lower your monthly payment, making the loan more manageable on a month-to-month basis. The downside is that you will likely pay a higher interest rate and accumulate significantly more interest over the extended life of the loan.

Importantly, Laurel Road does not charge prepayment penalties. This means if you choose a longer term to secure a lower required monthly payment for safety, you can still pay extra whenever you want to pay off the debt faster, effectively creating your own shorter term without the contractual obligation.

3. Loan amount minimums and maximums

Before applying, it is crucial to ensure your loan balance fits within Laurel Road’s lending limits. Private lenders set specific floors and ceilings for the amount they are willing to refinance.

According to Laurel Road (accessed October 2024), the minimum amount required to refinance is typically $5,000. This is standard for the industry, though some competitors may have higher minimums. If your remaining balance is below this threshold, you may need to stick with your current servicer or pay the loan off aggressively rather than refinancing.

On the upper end, Laurel Road is known for accommodating high-balance borrowers, particularly those with advanced degrees. For standard undergraduate and graduate degrees, maximum limits are generous, often covering the full cost of education debt. For qualified healthcare professionals, according to Laurel Road (accessed October 2024), there is often no aggregate maximum limit, allowing doctors and dentists with significant debt loads to refinance their entire portfolio in one transaction. Always verify the current limits for your specific degree type before applying.

4. Credit score and income eligibility requirements

Laurel Road maintains specific eligibility criteria to ensure borrowers can repay their loans. Unlike federal loans, which often do not require a credit check for students, private refinancing is credit-based. To qualify on your own, you generally need to demonstrate financial stability and a history of responsible credit usage.

Key eligibility factors include:

• Credit Score: While specific cutoffs can vary, borrowers typically need a credit score of 660 or higher to qualify. The most competitive rates are generally reserved for those with excellent credit (750+).
• Income and Employment: You must have stable, verifiable income that is sufficient to cover your debts and living expenses. Laurel Road will look at your debt-to-income (DTI) ratio to ensure you aren’t overleveraged.
• Citizenship: You must be a U.S. citizen or permanent resident with a valid I-551 card.
• Education: You must have graduated from an eligible Title IV accredited institution. Laurel Road generally does not refinance loans for borrowers who did not complete their degree.

According to Betsy Mayotte, President of The Institute of Student Loan Advisors, “Private loans can make sense for students who have strong credit or a creditworthy cosigner.” If you are a recent graduate or a parent helping a child, checking these requirements upfront can save time and protect your credit score from unnecessary hard inquiries.

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5. Cosigner options and release policy

If you don’t meet the credit or income requirements on your own—or if you want to qualify for a lower interest rate—applying with a cosigner is a common strategy. A cosigner is typically a parent, guardian, or spouse with strong credit who agrees to take equal responsibility for the loan.

Adding a creditworthy cosigner can significantly improve your chances of approval and may help you secure a lower interest rate. This is particularly helpful for recent graduates who have high income potential but a short credit history.

However, being a cosigner is a long-term commitment. To address this, Laurel Road offers a cosigner release program. According to Laurel Road policy (accessed October 2024), borrowers may apply to release their cosigner after making 36 consecutive, on-time monthly payments. To qualify for the release, the primary borrower must also meet Laurel Road’s underwriting criteria regarding credit score and income at the time of the request. This feature provides a clear exit strategy for parents or family members, allowing the student to eventually take full ownership of the debt once they are financially established.

6. Types of loans eligible for refinancing

Laurel Road offers flexibility regarding the types of loans you can refinance. You can combine various loans into a single new loan with one monthly payment, simplifying your financial life.

Eligible loan types typically include:

• Federal Student Loans: Direct Subsidized, Direct Unsubsidized, and Graduate PLUS loans.
• Private Student Loans: Loans from banks, credit unions, or other online lenders.
• Parent PLUS Loans: Parents can refinance existing Parent PLUS loans to lower their rate.
• School-Specific Loans: Loans for medical, dental, nursing, and law school are all eligible.

Laurel Road also allows for the refinancing of Parent PLUS loans into the child’s name, provided the child meets the underwriting criteria (credit score, income, etc.). This effectively transfers the debt from the parent to the child, which is a feature not all lenders offer. Remember, if you refinance federal loans, you convert them into a private loan, losing access to federal benefits discussed in the federal loans guide.

7. Application process and timeline

Laurel Road utilizes a streamlined, digital-first application process designed to be quick and transparent. Understanding the steps can help you manage your expectations regarding how long it takes to get funded.

1. Check Your Rate (2 Minutes): You can view estimated rates and terms by filling out a short form. This involves a soft credit pull, which does not affect your credit score.
2. Select Your Loan: If you like the offer, you choose your preferred term length and interest rate type (fixed or variable).
3. Upload Documents: You will need to provide proof of income (pay stubs or tax returns), government ID, and statements for the loans you want to refinance.
4. Hard Credit Inquiry: Once you submit the full application, Laurel Road will perform a hard credit pull to finalize approval.
5. Sign and Accept: After final approval, you sign the promissory note electronically.
6. Disbursement: Laurel Road pays off your old lenders directly. According to Laurel Road (accessed October 2024), this process typically takes 2-4 weeks depending on how quickly your previous lenders process the payoff.

During the transition, it is vital to keep making payments to your old servicers until you receive written confirmation that the loans have been paid in full. Missing a payment during the processing window can negatively impact your credit.

8. Unique benefits for healthcare professionals

One of Laurel Road’s strongest differentiators is its suite of benefits tailored specifically for healthcare professionals. Because the company started with a focus on doctors and dentists, their underwriting and loan features are often more accommodating to these career paths.

Key benefits for medical professionals include:

• Resident and Fellow Programs: According to Laurel Road (accessed October 2024), medical and dental residents may qualify to pay as little as $100 per month during their residency and fellowship, allowing them to manage cash flow while completing training.
• Underwriting Flexibility: Laurel Road may consider future earning potential for residents and fellows, rather than just current income, which helps young doctors qualify for refinancing earlier in their careers.
• Higher Loan Limits: Recognizing the high cost of medical education, Laurel Road often has no aggregate loan limit for qualified healthcare professionals, allowing for the refinancing of substantial balances.

These programs are available to a wide range of professionals, including physicians, dentists, nurses, physician assistants, and veterinarians. If you work in healthcare, these specialized terms can offer significant advantages over standard refinancing options.

9. Borrower protections: forbearance and hardship options

While private lenders generally offer fewer protections than the federal government, Laurel Road provides several safety nets for borrowers facing financial difficulty. It is important to understand these policies before signing your loan agreement.

Economic Hardship: If you lose your job or experience a significant drop in income, Laurel Road typically offers forbearance options. According to Laurel Road policy (accessed October 2024), borrowers may qualify for up to 12 months of forbearance over the life of the loan, usually granted in 3-month increments. During this time, you may pause or reduce payments, though interest will likely continue to accrue.

Death and Disability Discharge: In the unfortunate event of the primary borrower’s death or permanent disability, Laurel Road generally discharges the loan balance. This matches the policy found with federal loans and protects your estate or family from inheriting the debt.

While these protections are robust for a private lender, they are not as comprehensive as federal options, which can include income-driven repayment plans that can last for decades or result in forgiveness. Refinancing requires a higher degree of financial confidence that you will remain employed and able to make standard monthly payments.

10. Customer service and user experience

The final key fact to consider is the quality of the lender’s service. Laurel Road is backed by KeyBank, which provides the infrastructure and security of a major national bank while maintaining the agility of a digital platform.

Borrowers manage their loans through an online dashboard or mobile app, allowing for easy payment tracking, autopay setup, and document access. Customer support is available via phone, email, and chat. As of late 2024, Laurel Road generally maintains strong ratings for customer satisfaction, with many users citing the ease of the online application and the specialized knowledge of support staff regarding healthcare loans.

Having KeyBank as a parent company also means that Laurel Road customers can easily access other banking products, such as checking accounts, mortgages, or personal loans, often with relationship discounts. For borrowers looking for a “one-stop-shop” for their financial life, this integration can be a valuable perk.

Fees associated with Laurel Road refinancing

Understanding the fee structure is essential to calculating the true cost of your loan. Laurel Road is transparent about its fees, which is a significant advantage for borrowers.

Source: Laurel Road (fee schedule as of October 2024)

The absence of application, origination, and prepayment fees means that the interest rate you are quoted is the primary cost driver. You can pay off your loan as aggressively as you want without being penalized, which is an excellent strategy for saving money on interest.

Frequently asked questions about Laurel Road refinancing

Can I refinance my student loans with bad credit through Laurel Road?
Typically, no. Laurel Road requires good to excellent credit (usually 660+) for approval. However, if you have a creditworthy cosigner with strong income and credit history, you may still be able to qualify.

Does checking my rate with Laurel Road affect my credit score?
No. Laurel Road uses a soft credit pull to provide you with preliminary rate estimates. This allows you to shop around and compare rates without any negative impact on your credit score. A hard credit inquiry is only performed if you proceed with the full application.

Can I refinance Parent PLUS loans through Laurel Road?
Yes. Parents can refinance Parent PLUS loans to potentially secure a lower rate. Additionally, Laurel Road allows parents to transfer the loan to the child, provided the child meets the credit and income underwriting requirements.

How long does Laurel Road refinancing take?
According to Laurel Road (accessed October 2024), the entire process, from application to funding, typically takes 2 to 4 weeks. The timeline depends largely on how quickly you upload documentation and how fast your current loan servicers process the payoff.

Does Laurel Road offer student loan refinancing for medical residents?
Yes. Laurel Road is a market leader in this space, offering specialized programs that allow residents and fellows to make reduced monthly payments (often as low as $100) during their training period.

Laurel Road stands out as a top-tier option for student loan refinancing, particularly for borrowers with strong credit and those in the healthcare field. By combining competitive rates, a digital-first experience, and the stability of KeyBank, they offer a compelling package for many families and graduates.

Key takeaways:

• Competitive Rates: Offers both fixed and variable rates with an autopay discount.
• Healthcare Focus: Specialized low-payment options for residents and fellows.
• Flexibility: No prepayment penalties and terms ranging from 5 to 20 years.
• Safety Net: Includes economic hardship forbearance and cosigner release options.

If you are a parent looking to reduce the burden of PLUS loans, or a graduate seeking to lower your interest costs, Laurel Road is worth investigating. Remember, refinancing is a tool for financial progress—when used correctly, it can free up cash flow and accelerate your journey to being debt-free.

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References and resources

For further research and to verify the most current rates and terms, consult the following resources:

• StudentAid.gov – Official source for federal loan information, IDR plans, and PSLF details.
• College Finance Refinancing Guide – Compare Laurel Road against other top lenders.
• Private Student Loans Guide – Learn more about how private loans work.
• Laurel Road Official Website – Verify current interest rates, fees, and eligibility criteria directly with the lender.