First Republic Review
The best rates in the refinance market, but extremely strict requirements to qualify for a loan.
Reviewing First Republic’s student loan refinance option, the “Eagle Gold All-In-One Loan”, is difficult. On one hand, there is a ton to love about it. The absolute lowest interest rates on the market is a top perk. On the other hand, few people will meet the numerous requirements for the loan.
If lenders like SoFi and Laurel Road are the high-end sports cars, and lenders like LendKey are the family sedans, First Republic is the private jet in the student loan refinance and consolidation world. It is a great way to go, but not a realistic option for most borrowers.
First Republic Basics
First Republic will refinance federal and private student loans. The refinance length is 5 to 15 years. Interest rates on the 5-year fixed-rate loan start at 1.95%, while the 15-year fixed rate loan starts at 2.95%.
These interest rates are by far the best available in the student loan refinance market.
Like other legitimate lenders there are no prepayment, origination, or annual fees associated with a First Republic Student Loan Refinance.
Unfortunately, borrowers must meet a number of requirements to qualify for a First Republic loan.
First Republic Limitations
Borrowers will not be able to qualify for a First Republic Loan unless they can jump through a number of hoops.
High Loan Balance Requirement – Surprisingly, First Republic will not help borrowers with small or even average loan balances refinance their loans. The minimum balance to refinance is $40,000 and the maximum balance to refinance is $300,000. Most student loan refinancing lenders having a minimum refinance balance requirement of $5,000 to around $10,000.
Excellent Credit Required – First Republic states that the minimum credit score to qualify for one of their loans is 750. This does not mean that a 750 will necessarily qualify for a loan, it is just the minimum they will even consider.
Limited Geographic Range – Unlike most other student loan refinancing companies, First Republic borrowers have to finish their applications in person at a local branch. Branches are limited to California, Portland (Oregon), Boston, Palm Beach (Florida), Greenwich and New York City. Unless you live within their “service area,” First Republic will not refinance your student loans. This means that geography precludes most people from getting a First Republic Loan.
Personal Liquidity Requirement – On their website, First Republic indicates that potential borrowers need documents to verify “personal liquidity with full account statements.” However, the site does not indicate the amount of liquid assets necessary to qualify for a loan. We have heard from readers who indicated that the requirement was 25% of the loan balance. That means if you want to refinance $100,000 in student loans, you have to have access to $25,000 in cash. This requirement will preclude a large number of borrowers.
Checking Account Requirement – A student loan lender requiring a checking account is not unheard of, however, the First Republic Checking account requirements are quite strict. The minimum balance to open an account is $500, but unless your average monthly balance is above $3,500 you will have to pay a $25 fee each month.
Auto Debit Requirement – The industry standard is that if you sign up for automatic withdrawals for your student loan payments you get a .25% interest rate deduction. First Republic imposes a strict penalty if you do not meet this requirement. Borrowers who refuse automatic withdrawals from their account have to pay their base interest rate plus 5.00%. That means if you have a 1.95% loan and do not sign up for the auto debit, your interest rate will jump to 6.95%. The same 5.00% penalty is also imposed for borrowers who do not direct deposit their main source of income into their First Republic account.
Lots of Work Experience Required – First Republic will only refinance your student loans if you have more than 24 months of experience in your industry. Recent grads will have to look elsewhere.
Finally, it is worth noting that the First Republic Eagle Gold All-In-One Loan is not actually a student loan. This has a several major impacts. First, because it is not actually a student loan, borrowers will not be able to deduct student loan interest on their taxes. Second, this loan offers no forbearance or deferment options. Repayment terms will be far less forgiving than with any other lender. Third, if you refinance your federal loans, you will never be able to utilize programs like student loan forgiveness or income-driven repayment plans.
Other Refinance Options
Most borrowers will not be eligible for a First Republic Loan due to geography or First Republic’s strict credit, income, and asset requirements.
The good news is that there are a number of other lenders to consider:
|Pros:||SoFi is the only lender who will help a borrower find a job, and they routinely have the lowest rates offered.||LendKey works with a large network of smaller credit unions and banks. As a result, many applicants get the best offer from LendKey.||Splash has the best new customer bonus right now, and they have unique 8 and 12 year repayment terms.||Because ELFI is backed by a bank rather than investors, ELFI rates tend to stay low and fluctuate less than others.|
|Cons:||SoFi has grown into a large company offering mortgages, personal loans, and investment services. They no longer focus entirely on student loan refinancing.||Going the LendKey route does require working with a local bank or credit union. For many, this is a plus, but it is an extra step.||Splash is a newer lender and the longest length loan is 15 years instead of the industry standard 20.||ELFI is one of the newest lenders in the marketplace. As a result we have limited head to head information.|
First Republic Student Loan Consolidation Advantages
If you are able to meet the long list of First Republic requirements, the advantages go beyond just the low interest rates.
Private Banker – First Republic borrowers will work with this local banker when they apply for their loan and be able to contact this person whenever they have questions about their debt. Being able to talk to the same person and sit face to face is a huge advantage.
Early Payment Bonus – If you manage to pay off your loan within 48 months, First Republic will rebate the interest that has been paid on the loan up to 2.00% of the original loan balance. This makes First Republic the only lender that actually incentivizes early repayment.
Given First Republic’s extremely low interest rates and the fact that they actually incentivize borrowers to pay off their loan early, their student loan refinancing option cannot be generating much income for the bank. Instead, it appears that First Republic is offering these low rates to attract wealthy individuals into becoming long-term private banking and wealth management customers.
Borrowers who are able to jump through all of First Republic’s hoops will be in a position to save a great deal of money on their student loans. If we looked purely at lenders from an interest rate perspective, First Republic would rate first in our student loan refinance rankings. However, due to the unique nature of the First Republic refinance option and the fact that the overwhelming majority of borrowers will not be able to qualify, we will not include First Republic in our rankings.