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Pros and Cons of 4 Top Student Loan Refinance Companies

Kat Tretina
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There are plenty of reasons to refinance student loans. You can lower your interest rate, save money, pay off your loans faster, and even lower your monthly payment. But with so many student loan refinancing companies out there, it can be difficult to pick the right lender.

To help you pick a lender, we broke down the pros and cons of four of the best student loan refinance companies.

Benefits and drawbacks of the best student loan refinance companies

Purefy’s four partner lenders have several qualities in common. They offer long loan terms, and none of them charge prepayment penalties or origination fees.

However, they differ from each other in several key ways. Here’s what you need to know about each lender.


Earnest is an online lender specializing in student loan refinancing, private loans, and personal loans.


  • High loan maximum: With Earnest, you can refinance up to $500,000 in student loans, making it a good choice for those who went through expensive programs like medical school or law school.
  • Forbearance available: If you’re experiencing a financial hardship, like losing your job, you may enter into forbearance and temporarily postpone your payments.
  • Flexible repayment terms: Earnest allows you to pick your loan term. You can pick any length between five and 20 years, so you can select a seven year loan or even a 18-year loan.


  • No cosigners permitted: Earnest does not allow you to apply with a cosigner, so you have to meet its eligibility requirements on your own.
  • Not available in all states: Earnest does not offer student loan refinancing in all states. Residents in Kentucky and Nevada are not eligible.

ISL Education Lending

Unlike most refinancing lenders, ISL Education Lending is a non-profit organization. It offers both private student loans and refinancing loans.


  • Cosigner releases available: With ISL Education Lending, you can apply for a cosigner release after making just 24 consecutive monthly payments on time.
  • Interest rate reduction for military service members: Active duty service members can have their interest rates reduced to 0% for up to 24 months.
  • Borrowers do not have to graduate: ISL Education Lending is one of the few lenders that will refinance your loans if you didn’t graduate with a degree.


  • Fixed-rate loans only: ISL Education Lending only offers fixed-rate loans. If you’d prefer a variable-rate loan to take advantage of a lower initial rate, you’ll have to work with another lender.
  • High credit requirements: To qualify for a loan, you need a credit score of at least 670, or a cosigner with excellent credit.

PenFed Credit Union

PenFed Credit Union was established in 1935 and currently has over 1.6 million members, making it one of the largest, most trusted credit unions in the country.


  • Spouse loan consolidation: PenFed is the only lender that offers spouse loan consolidation, allowing you to combine your loans with your spouse’s debt.
  • Cosigner release after just 12 months: You can qualify for a cosigner release after just 12 consecutive monthly payments.
  • Parent refinancing: PenFed allows parent borrowers to refinance and transfer the loans into their child’s name.


  • Higher loan minimum: PenFed has a higher loan minimum than many other lenders. You must  have at least $7,500 in student loan debt to qualify for refinancing.
  • Limited loan term options: While other lenders allow you to customize your repayment term, PenFed has fixed loan term options.


College Ave is a refinancing lender based in Wilmington, Delaware. In addition to refinancing, it also offers private student loans and parent student loans.


  • Flexible repayment options: With CollegeAve, you can select your own loan term. Rather than having only a few options to choose from, you can pick a personalized loan term that works for you, such as a non-standard six- or nine-year term.
  • Clear borrower requirements: CollegeAve is transparent about its underwriting requirements, so you can find out if you’d qualify for a loan without having to apply and go through a credit check first.
  • Long loan terms available: CollegeAve offers loan terms as long as 20 years. You can spread out your payments over a longer loan term to reduce your monthly payments.


  • Low loan maximums: College Ave has relatively low loan maximums. The maximum for undergraduate student loans and most graduate school loans is $150,000. If you have a veterinary, medical, dental, or pharmacy degree, the maximum is $300,000.
  • No cosigner release available: CollegeAve does not allow borrowers to apply for cosigner releases, so your cosigner will share responsibility for the loan until it’s paid off.

Choosing a student loan refinance lender

Now that you know the advantages and drawbacks of our selections for the best student loan refinance companies, you can make an informed decision when choosing a lender.

Each of the lenders on this list is excellent, offering competitive rates and multiple repayment terms. To ensure you get the lowest rate, use Purefy’s Compare Rates tool to get quotes from the lenders without affecting your credit score. Once you find the right loan for you, you can submit your application online.

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