DRB Student Loan Consolidation
DRB offers the stability of a traditional bank, but is still able to provide interest rates competitive with the start-ups.
Article updated 9/18/16 to include information about DRB’s $150 Bonus to new customers and to update rates.
For borrowers weighing their student loan consolidation options, one company worth a look is Darien Rowayton Bank, or DRB for short. The headline on DRB is definitely the lowest rates on the market. While DRB loans do have features that should scare some borrowers away, there are also many advantages to DRB that make it a good choice for many borrowers.
Darien Rowayton Bank Basics
Darien Rowayton Bank is a traditional bank based out of Connecticut. Even though they only have physical branches in Connecticut, DRB consolidates both federal and private student loans in all 50 states.
Variable Interest Rates with DRB start at 3.64% and fixed-rate loans start at 4.20%. They offer 5, 7, 10, 15, and 20 year repayment terms on their loans, and there is no maximum loan amount… though there is a $5,000 minimum. Like most legit lenders, there is no origination fee and there is no prepayment penalty.
The DRB Advantages
These days many of the student loan consolidation companies seem to be recent start-ups without a physical presence outside of the internet. Many lenders also provide consolidation services, but have their loans serviced by a third party. At present, very few traditional banks offer student loan consolidation services.
Darien Rowayton is a notable exception. DRB is a traditional bank, and they service all of their own student loans. This setup should provide borrowers with a relatively straightforward borrowing and repayment experience.
That being said, the biggest advantage to DRB has to be the tight interest rate range. They don’t advertise the lowest interest rates, but if you are in the market for a fixed 20-year loan, the 5.15% could be a great option. With rates maxing out at 7.20%, borrowers will not get a terrible deal.
Another notable advantage to DRB is their cosigner program. For starters, they don’t put a huge emphasis on all borrowers having cosigners, and going without a cosigner is definitely ideal. However, for borrowers that will need a cosigner, there is no fixed waiting period for a release. That means as soon as a borrower has good enough credit and income on their own, the cosigner can be removed from the loan.
A final advantage worth pointing out is the new customer bonus. The student loan consolidation market has become so competitive that many of the top tier companies are now offering a bonus for new customers who sign up. Like other lenders, DRB is offering $150 to all new customers. It should be noted that over the life of a loan, $150 is a relatively small amount. That being said it is a nice little perk and a great reward for putting in the effort to lock down lower interest rates on your student debt.
Be on the lookout…
While there is a lot to like about DRB, there are several things that borrowers should consider carefully before signing up. This is especially true for people with federal government loans. Federal loans have special terms, including repayment plans and forgiveness programs that no private lender can offer. All potential borrowers should weigh the federal benefits against lower interest rate savings.
One other thing for borrowers to be aware of is the ceiling on the variable rate loans. The maximum interest rate on a variable rate 15 or 20 year loan is 10%. Any borrower considering a variable rate loan needs to carefully consider the consequences of potential higher interest rates and the possible ceilings.
The Bottom Line
As long as borrowers are careful to avoid some of the potential financial mishaps we noted above, DRB is an excellent option. The repayment plan options and low interest rates advertised by DRB are among the very best. However, an advertised rate versus an actual rate are two different things. Check your rate to find out if DRB is a good deal for you.