Citizen's/Charter One Bank
Citizen's Bank is one of the last of the major banks offering student loan consolidation. The rates are not terrible; but better options exist.
Updated on 9/14/17 to include the latest interest rate information and $200 new customer bonus.
Charter One Bank, along with parent company Citizens Bank, is one of the few remaining traditional banks left in the student loan refinance marketplace. Though Citizens and Charter One are technically two different entities, the loan rates and terms appear to be exactly the same. Based upon their advertised interest rates, their loans may be among the best options available. Like many lenders, there are some reasons for concern with these loans, but overall Charter One/Citizens seems to have a very competitive program. Because Citizens is a solid choice but for a couple drawbacks, Citizens is currently ranked #6 in our student loan consolidation company rankings.
Interest rates start at 2.78% for variable interest loans and the current highest rate is 8.18% (because these are variable rate loans the rates could go up or down over the life of the loan). The fixed rate loans start at 3.74% and peak at 8.49%. One the lower end, these rates are excellent, but the higher rate loans are pretty abysmal. Whether or not Citizens/Charter One ends up being the best deal will depend upon your credit score and income.
Citizens does get high marks for the length of time available to repay the loans. With up to 20 years to repay your loans, Citizens has one of the longest repayment plans in the market. Smart borrowers know that paying the minimum over the life of the loan is a recipe to spend a lot on interest, but by stretching out repayment so far, the minimum is much more manageable for months when the budget is tight.
Citizens Bank Interest Rates vs. Other Lenders
When we break down the interest rates according to loan type (fixed and variable) as well as loan length, Citizens has a number of noteworthy options. Currently Citizen’s offers the 3rd lowest rate on 5-year variable-rate loans, the 2nd best rate on 10-year variable rate loans, the 3rd lowest rate on 15-year fixed-rate loans, and the 2nd lowest rate on 20-year fixed-rate loans. These rates compare vary favorably to the competition.
Ultimately, while Citizens advertised rates across many loan types are very competitive, the only way for an individual borrower to verify they are getting the best possible rate is to apply with several different student loan refinance companies. This is because each lender uses a unique formula when evaluating credit applications.
One thing we don’t like is Citizens emphasis on co-signers. While co-signing may be a necessity for some, it is something that most borrowers would be wise to avoid. The mandatory 36 month waiting period for a co-signer release is also one of the longest we have seen. Many co-signers will want to be able to be removed from the loan within a year or two.
Citizens and Charter One seem to be targeting people with federal loans for their refinancing. Here at the Student Loan Sherpa, we think private consolidation of federal loans can be a huge mistake. However, for others is it is good idea. It is important for any perspective borrower to understand that if you consolidate your federal loans with a private lender, you will never qualify for student loan forgiveness or an income-driven repayment plan.
However, Citizens and Charter One do a better job than most companies at pointing out some of the risks associated with private loan consolidation.
The Bottom Line
This new loan consolidation program vaults into the top seven of our Student Loan Consolidation Rankings, based largely on the low interest rates advertised. Due to the large range of possible interest rates, borrowers would be wise to apply to several different companies in order to find the lowest rate actually available. By working with multiple companies, potential customers also get the opportunity to directly compare the companies and how they interact with their customers before any contracts are signed. Please note, if you do decide to go this route, be sure to apply to all of them in a short period of time in order to prevent any damage to your credit report.
Because Citizen’s is one of the many lenders on the Credible student loan platform, borrowers are able to submit one application to check their rates with many lenders. Additionally, borrowers can get a $200 bonus when they refinance through this route.