Did you know that it's possible to get a lower interest rate on your Great Lakes student loan? It totally is. The only catch: You'll have to say "so long" to Great Lakes.
To refinance your Great Lakes student loan to a lower interest rate, you'll need to apply for refinancing through a private lender. The good news is this whole process is pretty easy, and people do it all the time. In fact, 94,000 people refinanced their student loans last year. Here's what you need to get a better deal on your own student loans.
If you have a federal student loan, you also have a loan servicer. Great Lakes is one of the big ones and it's one of several companies the federal government uses to service student loans. Great Lakes was recently in the news because they were acquired by Nelnet, another big loan servicer.
A loan servicer is an organization that acts as the middleman between you and the federal government, administers your loan, and takes your payments. If you need to adjust the payment terms on your loan, you talk to your servicer.
You can't refinance your loan with your existing federal loan servicer, though. You have to switch to a private lender for that.
Refinancing is the closest thing you get to a do-over on your student loan. You take out a new loan with a private lender, and that lender pays off all your other loans for you. What you’re basically doing is replacing your old loan, or multiple different loans, with a single new one.
If you have federal loans, refinancing will mean you’re replacing those loans with a private loan.
The big benefit to refinancing is that you can score a lower interest rate. That equates to a lower monthly payment (most people who refi lower theirs by about $253 per month) or big savings over the life of your loan. In fact, our data shows that the average person who refinances can save around $16,000.
You can also replace many different loans with a single loan—which makes managing and paying off your debt easier.
In addition, refinancing gives you the chance to reset the timeframe of your loan—lengthening it if you want to reduce your monthly payment, or shortening it to pay less interest in the long run.
When you refinance your federal loans, those loans are replaced with a private loan.
There’s a big benefit to this: a chance to score a lower interest rate. Refinancing with a private lender is the only way you can reduce your interest rate on a federal loan.
That’s because federal loans aren’t set according to your credit score. Everyone gets the same rate, depending on the type of loan you have and when you took it out. The current rate for undergraduate Direct Subsidized and Unsubsidized Loans taken out on or after July 1, 2018 is 5.05%.
When you refinance with a private lender, that lender takes a look at your credit score and financial situation—and offers you a new interest rate based on what they see. If you have a high credit score, you could get considerably lower interest—some lenders, like Lendkey, are offering rates as low as 2.47%.
The downside to this is that you lose access to federal protections like income-driven repayment and student loan forgiveness for public service employees.
The federal government does offer its own (partial) answer to refinancing with a private lender: consolidation. Under this program, you replace multiple federal loans (and only federal loans) with one Direct Consolidation Loan, and you keep your federal perks.
The downside is that you also keep your federal interest rate—and it may even go up. Interest rates for Direct Consolidation Loans are set based on the weighted average of interest rates across all your loans, rounded up to the nearest eighth of a percent.
The first step is to pick a new lender and get a sense of the interest rate they would offer you.
Every lender’s criteria will be slightly different, but you can get a ballpark idea of how much you could save by plugging your loan info into an online refinancing calculator. Ours is here, if you’d like to compare rates from several different lenders at the same time.
Most lenders have an online application process that takes about 20 minutes or so. You’ll need info on your current student loans, plus your salary information and work history—so get those documents ready.
The lender will ask you some questions about your financial life and existing loans, then do a “soft pull”—a credit check that doesn’t show up on your score. After that, they’ll make you an initial offer.
Once you pick a lender, they’ll handle all the communication with Great Lakes to refinance your loan.
There are plenty of lenders out there—and you could go on a research binge to find a great one. But you don’t have to, because we’ve already dug into this question.
Here are some of our preferred lenders. All of these have low rates, great industry reputations, and something special that makes them stand out:
Refinancing your Great Lakes student loan is a smart move if you want to save on interest. Use our free calculator to see how much you could save.
Earnest empowers people with the financial captial they need to live better lives.
Using technology, data, and design to build affordable products, Earnest's lending products are built for a new generation seeking to reach life's milestones. The company understands every applicant's unique financial story to offer the lowest possible rates and radically flexible loan options for living life.
Click here to apply with Earnest and to see how much you can save.
Many ELFI customers save hundreds per month month and thousands over the length of the loan term.
Education Loan Finance is designed to assist borrowers through consolidating outstanding education loans into one single loan that effectively lowers your costs of education and/or makes repayment very simple. Education Loan Finance - backed by the strength of SouthEast Bank - combines the benefits of traditional education loan refinancing with the superior products, service, and support found in the private market.
Check out their low rates today to see how much you can save.
Attractive Bonus and Referral Programs:
Works with 275+ not-for-profit community lenders for higher approval chances
LendKey operates student loan programs for over 275 not-for-profit and community lenders across the country. By partnering with these lenders, LendKey is able to give consumers direct access to the best rates available from the most borrower friendly institutions. As the servicer of all loans obtained through its platform, you can rest easy knowing your personal information will be safe and that the best customer service team will be ready to answer your questions from application until your final payment.
Operates in all 50 states; 2nd largest student loan refinancing lender
Laurel Road is a national online lender with customers in all 50 states, the District of Columbia, and Puerto Rico. Many of our non-bank competitors are not able to lend in all 50 states.Laurel Road has grown to be the second largest player in the student loan refinancing space in large part because of our reputation as the go-to low rate provider.
For every loan they fund, they contribute to the education of a child in need
CommonBond was founded in 2011 by three MBA graduates from the University of Pennsylvania’s Wharton School who wanted to help their peers escape from high-interest student loan debt. Its original focus was on grad students, but it has since expanded to cover undergrads as well.
Of all the companies we reviewed, CommonBond has some of the best customer service. The company prides itself on being easy to reach by email, phone, or live chat. It offers networking events, expert panels, insider newsletters, and even has a program help borrowers who lose their jobs to find new ones. CommonBond also makes you feel good about choosing to refinance with them by donating money to an education nonprofit for each loan they write.
Get a personalized review of your refinancing options with CommonBond today.
Offers unemployment protection and career/coaching/networking
SoFi, which stands for “Social Finance,” was created by a group of Stanford business students who found themselves with a mountain of debt after graduation. They set out to change the student loan industry and help borrowers like themselves to get lower interest rates. SoFi has some of the lowest interest rates and, unlike the other lenders we reviewed, it has no maximum amount you can finance. However, Nevada residents can’t currently refinance with SoFi. Minimum loan balances are higher in Arizona, Massachusetts and Pennsylvania due to state laws. Additional state restrictions may apply.
Special offers for medical resident and fellow refinance products
Splash Financial is a leader in student loan refinancing with new rates as low as 3.25% fixed APR which can save you tens of thousands of dollars over the life of your loans. No application or origination fees and no prepayment penalties. Splash Financial is in all 50 states and is intensely focused on customer service. Splash Financial is also one of the few companies that offers a great medical resident and fellow refinance product. You can check your rate with Splash in just minutes.
Click here to see more of Splash's offerings and to see how you can save money.