Laurel Road Student Loan Refinancing Review: How Much Could You Save?

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It would be understandable if you lost track of Laurel Road. It rebranded away from Darien Rowayton Bank in April 2018 and was acquired by KeyBank a year later. But while it has a new name and home, the online-only lender is still one of our favorite choices for student loan refinancing.

Refinancing, if you need a quick refresher course, allows you to consolidate your federal and private student loans with a newer (and maybe more helpful) loan servicer. Perhaps most importantly, you might also be able to lower your interest rate or reduce your monthly payment.

If you’re interested in refinancing student loans, choosing the right lender can ensure you get the full benefits. In our Laurel Road student loan review, we’ll take a look at whether this lender could be helpful for your repayment, including…

Laurel Road student loan refinancing review: The basics

As you shop around for youir best deal, here’s an overview of the features and terms offered for Laurel Road student loan refinancing:

  • Refinancing options: Laurel Road offers general student loan refinancing, as well as:
    • Parent PLUS Loan refinancing: You could improve your repayment, or put the loan in your student’s name.
    • Medical school graduates: Pay as little as $100 per month while completing your residency or fellowship.
  • Rates and fees: You can opt for a variable or fixed interest rate. For college graduates and parents, APRs range from 1.89% – 5.90% for variable rates, or 2.80% – 6.00% for fixed rates. Pay no application, origination, disbursement or prepayment fees, although there is a late payment fee of 5% of the amount due, up to a maximum penalty of $28.
  • Loan terms and amounts: Student loan terms can run from one year up to 20 years, and you can refinance any amount above $5,000 (upon meeting underwriting criteria).
  • Eligibility requirements: To be eligible to refinance with Laurel Road, the student for whom the original loans were taken out must have graduated and completed at least an undergraduate degree — an associate’s degree is acceptable for certain healthcare professionals. Applicants must also be a U.S. citizen or permanent resident, and you’ll need to meet Laurel Road’s underwriting criteria, which considers factors like your credit score and debt-to-income ratio.
  • Additional features: Laurel Road provides the option to add a cosigner to your student loan refinancing application. It also offers forbearance for some types of economic hardships, such as a job loss, as well as student loan forgiveness in the case of death or permanent disability.

What we like about Laurel Road student loan refinancing

Like many other student loan refinancing options, Laurel Road has both positive and negative points to consider. First, here’s what we like best about refinancing student loans with Laurel Road:

Flexible refinancing options

Laurel Road avoids a one-size-fits-all approach and instead offers borrowers a tailored solution for student loan refinancing. The terms and limits on Laurel Road are more flexible than many other lenders, allowing you to refinance student loans in a way that makes sense for you.

The lender has no limit on the amount you can refinance with them, for example. It can lend to borrowers in all 50 states, Washington, D.C., and even Puerto Rico. On top of this, it offers several standard terms for student loan refinancing — namely 5, 7, 10, 15, or 20 years.

But what if you want a term shorter than five years or a unnamed term of, say, 12 years to get the right monthly payment amounts for your budget? Laurel Road says it can offer any term of fewer than 20 years that satisfies its underwriting criteria — applicants would start out by selecting a standard term, then would contact the lender to adjust it before finalizing the loan.

Another feature that allows Laurel Road to work with more borrowers is the option to add a cosigner when applying. A cosigner could help you qualify or receive a better refinancing rate.

Low rates and no fees

If you’re trying to refinance to lower your interest rate, Laurel Road could be a smart option. Both its variable and fixed rates are competitive, and these lower rates could save you significant interest.

The lender charges no fees to apply for, originate or process your student loan refinance. Plus, Laurel Road offers a 0.25% interest rate discount when you authorize it to collect monthly payments through automatic withdrawals.

You don’t have to guess about whether this lender can offer you the best deal either. Visit Laurel Road’s site, and you can request a customized rate estimate based on your specific student loans and credit background. These rate offers are generated with a soft credit check, so they won’t damage your credit.

Clear borrower protections

If you’re refinancing federal student loans, know that doing so will convert them into private loans. You’ll lose access to federal borrower protections such as deferment, forbearance and income-driven repayment plans.

Still, some private lenders — including Laurel Road — do offer protections in case hard times hit. For example, in the case of recent graduates who refinance before their student loan grace period is up, Laurel Road commits to honoring that grace period and delaying payments until it’s over.

Medical students are also in luck: During residency or fellowship — and for the six-month grace period after it — you’re only responsible for $100 monthly payments.

If you struggle in repayment after leaving school, Laurel Road offers a forbearance feature to postpone your monthly payments for up to three months at a time. However, you can’t exceed 12 months in the aggregate during the term of your loan.

Laurel Road will also forgive the total amount of your refinanced student loan should you die or become permanently disabled, something that most but not all student lenders offer. These protections offer peace of mind in case the worst happens.

What to keep in mind about Laurel Road student loan refinancing

No lender can meet every applicant’s needs. Based on our Laurel Road student loan refinancing review, here’s what you should consider before deciding whether to complete an application.

Not everyone can get approved

Laurel Road states that it can offer its low rates because it works with well-qualified borrowers. Simply put, not everyone can or will get approved to refinance student loans with this lender. You’ll likely need good credit and a low debt-to-income ratio (or a cosigner who fits that bill) for your Laurel Road application to get approved.

Unfortunately, however, this is true for most student loan refinance companies. In fact, Laurel Road’s credit requirements are not the strictest out there, but rather are in line with many competitors. Both Laurel Road and CommonBond, for example, require a minimum credit score of 660 as of the writing of this report.

If you’re hold anything less than a traditional four-year undergraduate degree, you might not be eligible either. Laurel Road only works with associate’s degree holders who are working (or have received a job offer) in the following roles and fields:

  • Cardiovascular technologist
  • Dental hygiene
  • Diagnostic medical sonography
  • EMT or paramedic
  • Nuclear technician
  • Nursing
  • Occupational therapy assistant
  • Pharmacy technician
  • Physical therapy assistant
  • Radiation therapy
  • Radiologic/MRI technologist
  • Respiratory therapy
  • Surgical technologist

If you have an associate’s degree but don’t have a qualifying career, consider Earnest.

You might need a cosigner

If your credit isn’t strong enough to qualify, you will likely need to add a cosigner to have a chance of approval. Of course, finding a willing cosigner with good credit isn’t always easy, and including a cosigner always carries some risk.

On the plus side, Laurel Road may allow you to release your cosigner after making 36 on-time, consecutive monthly payments.

No in-school deferment available

If you refinance your student loans with Laurel Road, keep in mind that your new debt can’t be deferred once you enter repayment.

Say you decide to return to school to finish up your degree or add a new diploma to your wall. In that case, you’d still be responsible for keeping pace with your monthly payments.

If scoring an in-school deferment option from a refinancing lender is important to you, consider CommonBond.

Is refinancing student loans with Laurel Road right for you?

Ultimately, Laurel Road has a lot to offer borrowers. It can be a particularly smart choice for parents and medical students in residency or fellowship.

This Laurel Road student loan refinancing review is a great starting point, but it’s always worthwhile to explore all your options. To find a lender that offers the features and terms most important to you, start by trying out our student loan refinancing marketplace.

Melanie Lockert and Andrew Pentis contributed to this article.