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How to Refinance LendKey Student Loans

Kat Tretina
how to refinance lendkey student loans
how to refinance lendkey student loans

Federal student loan
Payments Return August 31

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Federal student loan
Payments Return August 31

We've got you covered.

Get Purefy’s free 20-page Ultimate Guide with just one click.

LendKey is a popular student loan servicer that boasts low interest rates from its network of community banks and credit unions. Currently, the lender services over $2 billion in loans.

Depending on when you took out your LendKey student loan and your credit score at the time, you may have a relatively high interest rate. By taking advantage of student loan refinancing, you could save money and pay off your debt faster. But is this approach for you?

Continue reading to learn how to refinance LendKey student loans and get the best rates possible.

Who Is LendKey?

Founded in 2009, LendKey connects borrowers to hundreds of credit unions, community banks, and online lenders. LendKey’s platform has over 300 partner lenders, helping borrowers get loans with competitive interest rates.

As a marketplace, LendKey allows borrowers to submit a single form and connects that borrower to matching loans offered by its partner lenders. The options include private student loans for undergraduate and graduate students, student loan refinancing, and home improvement loans.

Who Has LendKey Student Loans?

LendKey’s loans are designed for undergraduate and graduate students enrolled at least half-time at an eligible school. If you took out private student loans to complete a bachelor’s or master’s degree, you may have used LendKey to find a loan.

While LendKey isn’t the lender behind the loan, it is the loan servicer for all student loans issued through the platform. Even if your loan was issued by one of LendKey’s partner credit unions, LendKey is still the loan servicer.

LendKey Student Loan Terms and Rates

Through LendKey, students can borrow up to 100% of the school-certified cost of attendance. Unlike other lenders, which allow students to defer payments until after graduation, LendKey requires payments while the student is in school; the student must make either a flat monthly payment or cover the interest that accrues each month.

Repayment terms range from 5 to 15 years, and students can choose between variable and fixed interest rates.

As of April 24, 2022, LendKey’s rates are:

     Variable: 1.57% to 7.80% (including 0.25% autopay discount)

     Fixed: 3.99% to 8.49% (Including 0.25% autopay discount)

Refinancing Your LendKey Student Loans

If you applied for a private student loan through LendKey but had less-than-perfect credit, you may have gotten a fairly high interest rate. For example, its fixed rate loans can have rates as high as 8.49%. With such a high rate, your balance can grow quickly due to interest accrual.

If you can’t seem to make any progress against your loan principal, student loan refinancing can help you tackle your debt.

When you refinance, you apply for a loan from another lender to pay off your current student loans. By taking out a new, larger loan to pay off the smaller existing loans, you’ll have one interest rate and monthly payment — hopefully with more favorable terms than before.

Student loan refinancing rates are still very low. At the time of publishing, fixed rate loans start at 2.43%, and variable rate loans start at just 1.74%. By taking advantage of these low rates, you could save money and consolidate your debt.

Benefits of Refinancing LendKey Student Loans

If you worked with LendKey to take out private student loans, there are some distinct advantages to refinancing your debt:

1. You Could Qualify for a Better Rate

Depending on your credit score and income at the time you took out your loans, you may have a high interest rate. By refinancing your LendKey student loans, you could potentially qualify for a lower rate, which could also mean a reduction in your monthly payment amount.

If you qualify for a lower rate, you could save a substantial amount of money throughout the life of your loan. In fact, borrowers often save thousands by refinancing their private student loans.

Tip: If you don’t have an established credit history, ask a parent or relative to cosign your loan application. If they have good credit, they can help you qualify for a better interest rate than you’d get on your own.

2. You Could Lower Your Monthly Payment

As a recent college graduate, your budget may be tight, leaving you with very little breathing room. If that’s the case, you can refinance your loans and reduce your monthly payments.

Depending on your situation, you could lower your payment by qualifying for a lower interest rate. Or, you can extend your loan term to significantly reduce your payment — some lenders offer terms as long as 20 or 25 years.

Of course, you’ll pay more in interest with a longer loan term because the interest has more time to accrue. But for some borrowers, that downside can be worth it to get more cash flow each month as they build their careers.

Tip: If you choose a longer loan term to get a lower monthly payment, keep in mind that top refinancing companies don’t charge prepayment penalties. As your income increases and your finances get more comfortable, you can decide to make extra payments against your debt. You’ll cut down on interest charges and pay off your loans faster.

3. You May Remove a Cosigner

If you took out private student loans for your undergraduate degree, you likely had to have a cosigner to get a loan. Private student loans are credit-based and they often have minimum income requirements, so there are few college students who can qualify for loans by themselves.

While a cosigner can help you get the cash you need to pay for school, it’s a big commitment. Over time, your cosigner may find that the loan affects their ability to qualify for other types of credit, and they may want to be removed from the loan.

When you refinance, you may be able to qualify for a loan entirely on your own. If you meet the lender’s eligibility requirements, you can be the sole borrower on the loan, and your cosigner will no longer have any obligation for it. Since refinancing will pay off the existing student loans, the cosigner is effectively released with no action required on their part. On their credit reports, the original loan will show as “paid in full” after you refinance, and it will no longer affect their ability to get other forms of credit.

4. You Can Streamline Your Payments

Chances are you had to take out several student loans to pay for college, perhaps even multiple loans each semester. You may have a mix of federal student loans and private student loans, including loans from LendKey and other private student loan lenders. If you do have several loans, you know how difficult it can be to keep track of them all. With different due dates, interest rates, and loan servicers, it’s easy to miss a payment or mix up accounts.

When you refinance your student loans, you can decide to refinance some or all of your loans — including federal and private loans. Your existing loans will be paid off and you’ll have one new loan, making it easier to remember your payment due dates and budget for the future.

Tip: Some student loan refinancing lenders even allow you to combine your loans together with your spouse’s student loans. As a couple you can combine your debt and streamline your payments, making it easier to tackle your debt as a team.

5. You Don’t Have to Worry About Losing Federal Loan Benefits

As you research your options for repaying your student loans, you’ll find that experts caution borrowers against refinancing federal student loans. That’s because when you refinance, your loans become private loans, and you’ll lose eligibility for perks like income-driven repayment and Public Service Loan Forgiveness. You’ll also no longer qualify for the federal loan payment pause that was extended through August 31, 2022 as a result of the CARES Act.

But if you have LendKey student loans, that’s not an issue for you. LendKey loans are private student loans, so you aren’t eligible for federal loan benefits. You can refinance your private debt without worrying about losing any extra perks.

The 4 Best Companies to Refinance Student Loans

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Potential Drawbacks to Refinancing LendKey Loans

Student loan refinancing can be a powerful tool for managing your debt. However, it’s not always a good solution. If you’re not sure if you should refinance your LendKey student loans, make sure you think about the following drawbacks:

Not Everyone Will Qualify for Refinancing or Lower Rates

What makes student loan refinancing so appealing is the ability to lower your interest rate. However, not everyone will qualify for a lower rate than they have now.

To qualify for student loan refinancing, you usually need good-to-excellent credit and reliable income. You also need to meet other criteria, such as a low debt-to-income ratio.

But to get the lowest possible interest rates, you need to meet those requirements and choose a shorter loan term — usually 5 to 8 years. Lenders reserve the lowest rates for borrowers that have excellent credit and select shorter terms. Otherwise, you may qualify for a more modest reduction, or no reduction at all.

Some Borrowers Will Need a Cosigner

If you don’t meet the lender’s requirements on your own, you can still qualify for a loan if you add a cosigner to the application.

While that can be a great way to qualify for refinancing and get a lower rate, it’s a big favor to ask of a parent or relative. Not everyone will be willing to act as a cosigner, or they may not have the credit scores or income that lenders require.

Your Grace Period May End Early

There are some refinancing lenders that allow you to refinance your student loans while you’re still in school or during your loan grace period. However, make sure you think about how repayment will be handled; in most cases, your payments will begin as soon as the loan is disbursed and your existing loans are paid off. That means your payments may no longer be deferred if you are in school or within the grace period, and you’ll have to start making payments on the new loan.

If you aren’t employed yet, you may want to hold off on refinancing until your grace period ends and you find a job. There are some lenders that will honor the existing grace period, so you may have the option to refinance with a lender that won’t require immediate repayment.

Lender Policies May Be Different

Student loan refinancing is offered by private lenders, so their terms and policies can vary. Before refinancing your debt with a particular lender, make sure you review the loan terms and conditions and ask about any financial hardship policies.

Some lenders will allow you to postpone your payments or make reduced payments if you lose your job or become seriously ill, but not all do, so it’s important to understand what their policies are before accepting a loan. 

See How Much You Can Save

Student Loan Refinance Calculator

View Details

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Student loan refinancing combines your current loans into a single loan with a new rate and term. See how much you can save by entering your loan information below, or by getting quotes from multiple lenders using Purefy’s rate comparison tool.

Step 1: Enter Current Loan Information

Loan Balance
Your remaining student loan debt to be repaid.
Interest Rate
The amount that the lender charges in interest, expressed as a percentage.
Current Monthly Payment
The total amount of your monthly student loan bill.
Add Multiple Loans to Calculate

Step 2: Enter New Loan Information

New Interest Rate
Your updated interest rate after refinancing student loans.
Term
The length of time you have to repay your student loan debt in full.

Add Multiple Loans

Insert additional loan

Step 3: See How Much You Can Save

$15,310

Lifetime Interest
Savings

$1,018

New Monthly
Payment

$128

Monthly
Savings

Current Loan New Loan Savings
Rate 6.7% 4.2% 2.5%
Lifetime Interest $37,520 $22,210 $15,310
Monthly Payment $1,146 $1,018 $128

Like what you see? Check your actual prequalified rates from the industry’s top lenders in just 2 minutes or less.

When Does It Make Sense to Refinance LendKey Student Loans?

If you aren’t sure if student loan refinancing is right for you, ask yourself the following questions. If your answer to any of them is “yes,” refinancing your LendKey loans may be a good idea.

Do you want to save money?

If you want to lower your total repayment cost — how much you’ll repay in principal and interest over the life of your loan — refinancing can help you achieve that goal.

By refinancing to a lower rate, more of your payment goes toward the principal rather than accrued interest. Even if you only make the minimum monthly payments, you’ll save money over time. In fact, the savings can be in the thousands.

For example, let’s say you had $35,000 in student loans at 5.00% interest and a 10-year term. If you refinanced your debt and qualified for a 10-year loan at 3.5% interest, you’d save over $3,000 in interest charges.

To find out how much you can save by refinancing your loans, use the student loan refinancing calculator.

Has your credit score or income increased?

When you were applying for your student loans to pay for school, you likely had minimal credit history and income. Now that you’ve graduated from college and have started working, you may be earning a solid salary and have better credit.

With reliable income and a good credit score, you can refinance and qualify for better terms than you have on your existing student loans. By refinancing your debt, you could save a substantial amount of money and pay off your debt faster.

Do your loans have a cosigner you want to remove?

If you had to add a cosigner to your private student loan application to get approved — and most college students do — you may want to remove your cosigner now that you’re working and independent.  You can remove the cosigner by refinancing your loans; once the loan process is complete, you’ll be the sole borrower.

Do you want to get rid of your debt faster?

If your student loan debt is a major stressor in your life, you may be motivated to pay your loans off as quickly as possible. In addition to strategies like making extra payments and taking advantage of autopay discounts, refinancing can be a great way to pay off your student loans faster.

If you refinance to a lower interest rate, more of your payments will chip away at the loan principal. If you make additional payments or lump sum payments, you can make more progress against your debt and pay your loans off months or even years faster.

Are you happy with your current loan servicer?

Terms and customer service can vary by lender. While some servicers may be very responsive, offer lengthy forbearance periods for financial hardships, and allow you to apply for cosigner release, that’s not always the case.

If you’re unhappy with your current loan servicer, refinancing is a way to switch loan servicers. When you refinance, you can move your loans to another lender. That’s why it’s a good idea to research a lender’s policies and repayment options as well as interest rates to find the best fit.

Free eBook: How to Conquer Student Loans

Free eBook: How to Conquer Student Loans

How to Refinance LendKey Student Loans in 5 Simple Steps

After weighing the pros and cons, you may decide that it makes sense to refinance your LendKey student loans. You can complete the refinancing process in just five easy steps:

1. Compare Rates With Purefy

Although you can manually shop around and compare rates from refinancing lenders on your own, it can be time-consuming. A faster and more efficient way is to compare rates with Purefy. By filling out one short form, Purefy will show you loan options and rates from top refinancing lenders. And comparing rates won’t impact your credit score.

2. Enter Information About Your Loans

When you request rate quotes, you’ll be prompted to enter information about your existing loans, including the current interest rate(s) and the remaining loan term. If you don’t know that information off the top of your head, log into your LendKey account and view your most recent loan statement. 

3. Select the Best Loan for You

Purefy will show you multiple loan options from leading refinancing companies. You can choose the loan term, interest rate type, and rates that match your needs. For example:

     If you want to pay off your debt quickly and want the lowest possible interest rate, you may opt for a 5-year variable rate loan.

     If you want to keep your existing loan term so you don’t have an increase in monthly payments, you may want a 10-year fixed rate loan.

     If you want to reduce your monthly payment, you can opt for a loan term of 15 to 20 years to dramatically lower your payment.

4. Complete the Application

Once you’ve selected a loan, you can complete the loan application. You’ll be prompted to enter your personal information, including your Social Security number and address, as well as details about your employer and current student loans.

You may need to submit supporting documentation along with your application, such as:

     Copy of your driver’s license or passport

     W-2s, pay stubs, 1099s, or tax returns

     Recent bank statements

     Recent loan statements

5. E-Sign and Close Your Loan

In most cases, lenders will review your application and decide whether to approve you quickly (usually within a few days).

If approved, you’ll receive a notification from the lender with a loan agreement. The agreement outlines all of the fees, terms, and conditions of the loan, so review it carefully. If you consent to everything within the agreement, you can sign the loan documents with an electronic signature to finalize the refinance.

It can take a few weeks after the loan closing date for the lender to pay off your existing loans and for the payments to clear. Continue making payments with your previous servicers until you get an alert that the loans are paid in full to avoid late fees or damage to your credit — any extra payments will be refunded to you after the loan is closed.

Get Help With Your Refinancing Application

Now that you know how to refinance LendKey student loans along with the pros and cons of refinancing, you can make an informed decision about how to proceed. For many borrowers, student loan refinancing can be an excellent way to save money, reduce their payments, and get out of debt faster.

If you still have questions about refinancing, or just need help navigating the application process, you can schedule a free student loan refinancing consultation with Purefy. A Purefy student loan advisor can help you learn how refinancing works, its advantages and drawbacks, and guide you through every step of the application process.

Every consultation is completely free and personalized to your needs. You can schedule an appointment online and pick a time that’s convenient for you. 

Interested in Student Loan Refinancing? Check Out the Top Lenders of 2022.

Compare interest rates and perks to find the best lender for you.

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