Laurel Road v. LendKey: Which is Better for Student Loan Refinancing?
Updated on March 17, 2021
By Trish Sammer
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So you want to refinance your student loans. How do you know which lender to choose?
Many people choose Laurel Road or LendKey. Let's take a look at the advantages and term options for each lender so you can make a better, educated decision about which one is for you.
Why refinance with Laurel Road?
One of the major drawbacks to refinancing federal loans is that you lose federal protections like forbearance and forgiveness. Most private lenders don't offer these benefits. But Laurel Road solves that problem. The lender is one of the few in the market that offers low interest rates and protections like forbearance and forgiveness under certain circumstances.
Additionally, the lender will forgive the full amount of the loan if the borrower dies. Borrowers who qualify due to a disability can also qualify for full or partial forgiveness. This kind of flexibility could serve you well if your finances or life circumstances change.
The lender also promises savings: Laurel Road customers save an average of $20,000 or more over the life of their loans.
Why refinance with LendKey?
Do you prefer having lots of options but would rather someone else do the legwork of comparing lenders and terms? LendKey might be for you. The lender operates as a portal, with its platform connecting you to direct lenders based on your personalized needs. From there, you're able to see a comparison of terms and rates and make a decide what's best for you.
This unique approach to refinancing is what makes LendKey a popular choice. But what's more, the company's emphasis is on credit unions and community lenders, rather than big banks, that offer low interest rates and remarkable customer service. So you can be sure you're in good hands.
Advantages of LendKey and Laurel Road
LendKey's portal gives you the chance to compare interest rates and loan terms of more than 300 community banks and credit unions, all within a single portal and a single application. In other words, the LendKey experience is designed to meet your needs by giving you options. And if you need assistance, LendKey's loan specialists can help you navigate the choices.
On the other hand, Laurel Road offers extreme flexibility. In addition to the benefits outlined above, the lender is a great choice for medical students. A special program for medical students allows them to refinance as a soon as they're matched to a residency or fellowship program. Through this program, medical students enrolled in a residency or fellowship pay just $100 per month while they're enrolled, and accrued interest does not capitalize during this time.
Comparing rates and fees
Luckily, both lenders offers similarly flexible, competitive repayment plans. Here's what that means. LendKey rates start at 1.90% for a variable interest loan or 2.95% for a fixed interest loan. Laurel Road's variable rate loans start at just 1.99% interest and fixed rate loans start at 3.00% interest.
Remember, a variable rate can fluctuate, while a fixed rate stays the same over the life of your loan. Your credit score and other factors will ultimately affect the interest rate you qualify for).
Neither of the two lenders charge origination fees, and loan terms for both range from 5 to 20 years. Generally, the longer the term of the loan, the higher the interest rate.
Do the lenders offer discounts?
Yes, both offer a .25% interest rate reduction when you sign up for automatic monthly payments.
In addition, once you've paid off 10% of your loan principal, LendKey will also offer a 1% interest rate reduction. And while it's technically not a discount, Laurel Road's referral program offers you up to $400 for each person you refer who refinances their loans with the lender.
How do eligibility requirements compare?
To qualify with LendKey, you must have an income of at least $24,000 a year, a credit score in the mid 600s, and a degree from an eligible school. You can refinance between $5,000 and $250,000 of existing student loan debt, but the exact amount varies based on your degree.
To keep its interest rates low, you generally must be a low-risk borrowers with a good credit history to qualify with Laurel Road. The lender will look at your income, debt, and expenses to decide if you qualify. You must also:
- Be a US citizen or permanent resident with a Green card
- Be a graduate of a Title IV institution in the U.S., and
- Have at least $5,000 in student loans to refinance.
Parents refinancing PLUS loans must have children who graduated from Title IV institutions.
Comparing the application process
To start the process, visit LendKey’s “check your rates” page. Here, you'll enter information about yourself, your school, and your existing loan. Those who qualify will be shown several offers from different lenders. And even though another lender will technically refinance your loans, LendKey will handle origination and servicing. If you want a more detailed explanation of the application process, head over to our LendKey review. The application process takes just 15 minutes.
Applying with Laurel Road is easy. You can see rate options instantly after completing a short online form; the lender doesn't need to pull your credit just yet. This means you can decide if the lender is good fit before you your credit is checked. For the application, you'll also need:
- A photo ID
- Two recent pay stubs or other proof of income, and
- Payment statements for your existing student loans
At the end of the day, it's up to you to decide which lender meets your personal and financial needs. But you can be sure that either LendKey or Laurel Road will provide a means to help you pay down your debt with ease.
Want to compare more lenders? We've done the research for you. See how the best refinancing companies compare in rates and loan terms.
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