Connext Refinance Review
Connext isn't terrible, but much better options exist.
Article Update July 2nd, 2019: The Connext website has been down for several months now and it appears that they are no longer offering student loan refinancing. If things change, this article will be updated accordingly. For now, borrowers looking for student loan refinancing will have to investigate one of the many other companies currently offering refinancing services.
Connext is a very interesting student loan refinance and consolidation lender in theory, but from a consumer perspective, Connext is a somewhat disappointing option. As a result, Connext checks in at 11th place out of 18 lenders in our Student Loan Refinance Rankings.
What makes Connext interesting is that they are not the actual lender of the loans. Instead, they have a pool of lenders and Connext matches lenders with borrowers. In this regard, Connext is similar to how LendKey works. The difference being that Connext works with a variety of lenders while LendKey works exclusively with credit unions and non-profits. Unfortunately, the Connext interest rates don’t keep pace with other lenders in the market.
Connext Refinance Basics
Like most legitimate lenders, there are no student loan origination for prepayment fees with Connext. Interest rates on the refinance loans start at 3.97% and go as high as 9.85%.
Borrowers interested in refinancing with Connext will need to refinance a minimum of $10,000 in student loans. They must also have graduated from a list of Connext approved schools. Maximum loan consolidation goes as high as $250,000 for medical students, but for undergraduate borrowers, the max is $100,000.
Connext offers 5, 10, 15, and 20 year variable-rate loans as well as 5, 10, and 15 year fixed-rate loans.
We like that Connext isn’t just the company that issues the loan; they are also the company that services the loan. This means that the interactions you have with customer service during the refinance process are likely to be a good indication of how you will be treated as a customer. Many other lenders just refinance the loans and then have another company responsible for the actual loan servicing.
Connext also participates in the Credible student loan platform. This is ideal for borrowers because it allows them to check their rates with a number of different lenders with one short application. Not only does it make shopping around a little easier, Credible also offers $200 for all customers who refinance. This bonus applies regardless of the lender selected.
The headline rate for Connext, currently 3.97% is somewhat competitive, but things quickly go downhill from there. We are especially disappointed with the starting rates for the 10, 15, and 20 year loans. Borrowers looking for longer loan terms would do well to focus on lenders with better 10, 15, and 20 year starting rates. The wide range of possible rates is also a concern. Borrowers may get approved for a loan, with interest rates at nearly 10%, refinancing with Connext may not offer any savings.
We also don’t like the Connext co-signer release policy. Borrowers with a co-signer have to make 36 consecutive, on-time payments AND meet credit approval requirements. This is one of the most strict co-signer release policies in place.
Finally, like nearly all other refinance companies, Connext will consolidate or refinance federal student loans. For some borrowers this makes sense, but going this route means that you will never be able to get student loan forgiveness or enroll in an income-driven repayment plan. This issue applies with nearly all lenders, but it is important borrowers understand the consequences of refinancing federal loans with private lenders.
Connext has potential, but most borrowers will likely be able to find better rates and terms with other lenders. As a result, Connext ends up in the bottom half of our student loan refinance lenders rankings. That being said, all lenders look at applications slightly differently, so it is certainly possible that Connext will end up offering a competitive rate. The only way to know for sure is to shop around and check your rate with Connext and others.