If you have student loan debt, refinancing can help you save money, allowing you to replace your current loan with a lower-cost alternative. There are certain eligibility requirements for refinancing — for example, lenders may require you to have a minimum credit score and to prove that you have a steady source of income. If you don’t meet these eligibility requirements, you may still be able to take advantage of refinancing with the help of a co-signer.
The criteria, repayment terms, and interest rates for refinancing vary between lenders. Doing your research will allow you to find a fitting lender that best suits your needs. One popular option for student loan refinancing is Laurel Road. If you’re a college student, young professional, or the parent of a student or recent graduate, you’ve probably already come across this name as you research your refinancing options.
The below guide provides greater insights into Laurel Road refinance student loans and can help you determine if this is the right path for you.
Is Laurel Road Good for Refinancing Student Loans?
Laurel Road is a trusted provider of student loan refinancing services. That said, you should always read the fine print of any student loan refinance provider before taking this step.
The entire point of refinancing is to streamline your student loan repayments and save money in the long term. Whether you can accomplish this through Laurel Road depends on various factors, including how much student loan debt you have, current competitive interest rates, and your current or future employment status.
Laurel Road is an industry leader in the refinancing of student loans and may be the right option for you — but first, you should gain a better understanding of critical points like interest rates, monthly payments, borrower benefits, and more. Read on for the essential facts.
To qualify for Laurel Road refinancing, you must be a U.S. citizen or a permanent resident with a green card (I-551) and must have attended an accredited institution that is authorized to receive federal aid. When you apply for refinancing, you further must have graduated or currently be in the last year of your undergraduate degree. If you’re a parent applying to refinance a PLUS loan, your child can still be in school and the graduation requirement doesn’t apply.
Further, you must have a minimum credit score of 700 (“good”) to qualify for Laurel Road refinancing. If you have a subpar credit history, you may not be eligible without a co-signer (like a parent). A co-signer release is available in case you want to take over the loan later when you’ve improved your credit. That said, you can still qualify for refinancing if you’ve filed for bankruptcy (as long as it was at least four years ago). If you have bad credit and want to refinance your student loans, check out this guide.
There is no minimum income requirement for Laurel Road student loan refinancing. However, you must be employed in a “professional capacity.” This means that self-employed individuals may not qualify, although this isn’t strictly specified in the Laurel Road underwriting details.
Refinancing Minimums and Maximums
Refinancing is usually only worth it if you have a certain minimum amount of debt. Laurel Road student loan refinancing is possible if you have a minimum loan amount of $5,000. While some lenders place caps on how large of a loan you can refinance, Laurel Road is open to any amount. You can refinance the total amount of your loans if you’d like. This makes Laurel Road stand out: They offer some of the highest loan amounts in the industry. Note that if you have to refinance more than $300,000 in debt, the lender will divide the refinanced loan into two distinct loans.
Further, refinancing is also available for professionals with an associate degree — which isn’t always the case. Laurel Road offers refinancing for associate degrees in the health care field (up to $50,000 for eligible programs at a Title IV eligible school). Applicable programs include paramedic/EMT, nursing, radiologist, and physical therapy assistant, among others. To qualify, you must have graduated or be currently enrolled in your final term with an employment offer in hand. That employment offer must be in the same field as your degree.
Laurel Road offers payment terms ranging from five to 20 years. The lender further offers a favorable grace period to borrowers in line with federal standards. When you graduate, drop below half-time enrollment, or withdraw from an eligible institution, you have up to six months to make your first payment.
Laurel Road further offers noteworthy repayment options for dental and medical residents. As soon as borrowers get a medical or dental residency or fellowship, they qualify to pay just $100 monthly until six months following the conclusion of their residency or fellowship. Note that interest will continue to accrue during this time, and unpaid interest is capitalized upon the conclusion of the reduced payment period.
In general, Laurel Road is a preferred provider for health professionals. The lender offers special pricing for eligible dentists, optometrists, physicians, and physician assistants. The eligible degree programs are specified on their website. The exact discount will vary depending on the individual applicant’s profile (e.g., credit score, employment).
Laurel Road offers both fixed interest rates and variable interest rates for student loan refinancing. As of February 2021, variable interest rates were set at 1.89% to 5.90% APR. Note that variable rates fluctuate over time and adapt to market realities. Following the COVID-19 pandemic, interest rates are generally lower. The interest rate maximum is capped at 9% to 10%.
As of February 2021, fixed interest rates were set at 2.80% to 6.00% APR. Fixed interest rates won’t change for the life of the loan. This ensures consistency and can offer added security for borrowers who want to be certain about their future payment obligations. That said, a fixed rate means you won’t be able to tap into possibly favorable fluctuations in interest rates.
Interest Rate Discounts
Some lenders will offer discounts to give you lower interest rates. This helps them stand out from the competition and attract favorable borrowers who they can count on to pay back the money they owe. Laurel Road is no exception and it’s important to take such reductions into account when considering whether this is the right refinancing option for you.
One interest rate discount worth mentioning is the autopay discount. Borrowers can get a 0.25% discount if they set up automatic payments from the borrower’s bank account. Lenders offer these kinds of options because it gives them added security. They can have greater confidence knowing that they will get the money they’re owed in a timely fashion (and that payments won’t be forgotten). For a large loan refinancing plan, that 0.25% can add up and make a big difference over time.
Finally, if you are a member of an accredited professional association (e.g., one for health care professionals), you may also benefit from an interest rate discount or a cash bonus.
As mentioned, Laurel Road has relatively stringent eligibility requirements for student loan financing. You need a credit score of at least 700 and should prove gainful employment in a professional capacity (e.g., self-employed individuals may not qualify). Professional associate degree applicants must be employed in a position in line with their field of study (or be in their final term with a relevant job offer already in hand).
If you don’t meet these criteria, you may need a co-signer. A trusted individual (like a parent) with a more favorable credit history and employment record can co-sign the loan. Note that your co-signer becomes legally liable for the loan — if you can’t pay, they are obligated to pay instead. If they fail to pay, their own credit score may take a hit. The great news is that Laurel Road offers a co-signer release that is available after 36 months. To qualify for the co-signer release, you must meet the relevant underwriting criteria (e.g., credit score, employment status, etc.) and must have made timely payments for three years.
This means you can get the refinancing you need but cut your co-signer loose and take over the loan once you’re more financially stable. This can bring both you and your co-signer peace of mind.
It’s also worth noting that Laurel Road does offer loan forgiveness on a case-by-case basis (e.g., if the borrower passes away or becomes permanently disabled and unable to work). It’s not fun to consider but it’s absolutely worth mentioning. The last thing you want is to saddle your loved ones with unpaid school loans in case something does happen to you.
Parent PLUS Refinancing
Laurel Road is known for having great loan options for parent PLUS loan borrowers (parents who have taken out loans for their children). Their parent PLUS refinancing option allows parents to refinance an existing loan at a lower rate.
In some cases, the loan can even be refinanced in the name of the child, removing this financial obligation from the parents’ shoulders. Of course, the child will have to meet the underwriting standards (e.g., credit score, employment) in order to take over the loan in their name. This isn’t a given and not all lenders offer this option.
This benefits both sides of the equation. The parent can breathe a sigh of relief knowing they are no longer legally bound to this debt. Meanwhile, the adult child will have gotten the parental support they needed while studying and can take over the loan after they’ve gotten a gainful employment offer.
Application and Origination Fees
Laurel Road is fairly straightforward when it comes to the fine print and disclaimers. There are no origination fees (an origination fee is a cost issued by a lender when they process a loan). While most private lenders don’t issue origination fees, it’s always worth double-checking refinancing loan terms to make sure you don’t get caught off guard by this added expense. The late fees charged are also fairly modest at just $28.
Laurel Road doesn’t charge any application fees, so it’s low risk to apply for refinancing with them. You can check your Laurel Road refinancing rate without a hard credit pull. This is a plus because hard credit pulls negatively affect your credit score. Only once you’ve checked your rate and want to proceed with the application will a hard credit score be needed.
While those facts and figures are fair and speak to the lender’s overall good reputation, note that Laurel Road is still a private lender and doesn’t offer the same level of protection as a Federal student loan will. For instance, you won’t qualify for public service loan forgiveness or income-based repayment programs.
Forbearance and Deferment Options
Laurel Road doesn’t offer academic deferment. However, note that some lenders are offering private loan relief because of economic hardships incurred by COVID-19, and Laurel Road is among them. Borrowers may be eligible for forbearance or an extension if they can prove economic hardship related to COVID-19. Interested individuals should contact Laurel Road’s loan servicer, MOHELA.
Laurel Road does offer a few forbearance options. You can postpone loan repayment for three months at a time for a total period of one year. However, you have to provide proof of qualifying economic hardship. Options might include unpaid maternity leave or involuntary job loss.
Borrower Bonuses and Benefits
The market of private lenders is vast and there’s a lot of competition. For this reason, some lenders offer bonuses and perks to try to get you to sign with them. Laurel Road offers a $200 bonus when you refinance with them. There is also a referral bonus: You can get up to $400 for every person you recommend to refinance with Laurel Road who ends up refinancing through them.
Explore the Best Student Loan Refinancing Options Today
Laurel Road is a reputable option in student loan refinancing. They are an especially smart choice for individuals pursuing an education and career in health care, thanks to the added benefits given to physicians, nurses, physician assistants, and dentists.
Laurel Road is just one of the many private lenders available, however. Before you refinance your private student loans, do your research. First, you have to decide if it’s worth it or not (this guide can help). Then, it’s important to do your research regarding options. While refinancing can be helpful in streamlining repayments and saving money, every person’s situation is unique.
CollegeFinance.com provides students and their parents with the information they need to make smart choices when it comes to student loans. Whether you want more details about online lenders or need support in the application process, we can help.