For the past five years, Laurel Road has been one of the top student loan refinance lenders. Laurel Road has built its reputation on being a top choice for healthcare professions, especially doctors, optometrists, and dentists. However, we find that Laurel Road is a solid option regardless of occupation, which is why it appears in the top five of our refinance company rankings.
When reviewing Laurel Road and comparing it to other lenders, Laurel Road has a track record of offering excellent interest rates in a variety of categories. Laurel Road also has recently gained a reputation for higher application approval rates.
While there is plenty to like about Laurel Road, it is not a company or a refinance product free of concerns, which we will get into below.
Laurel Road Basics
Laurel Road offers both fixed-rate and variable-rate student loans. Borrowers have the option of 5, 7, 10, 15, and 20-year repayment terms. Generally speaking, the longer-term loans have slightly higher interest rates but lower monthly payments because the loan is spread out over a more extended period. Interest rates on the variable-rate loans start at 1.64% APR with a current max of 5.61% APR. The fixed-rate loans start at 2.25% APR and go as high as 5.75% APR. The minimum refinance or consolidation loan is $5,000, and there is no maximum.
Like other legitimate lenders, Laurel Road has no loan origination fees or prepayment fees.
Additionally, Laurel Road also offers loan refinancing tailored explicitly to parents who took out loans for their children as well as physicians in their residency.
Advantages to Refinancing with Laurel Road
One of the significant benefits of Laurel Road is that it is the product of a bank, rather than a student loan company. Banks face greater scrutiny in their lending practices, meaning borrowers face a much lower likelihood of lender shenanigans when applying for a loan.
At present, Laurel Road has some of the best interest rates in the student loan refinance marketplace. Not only does Laurel Road’s starting rate of 1.64% beat most lenders, but they have excellent rates in nearly all loan categories.
If you are a medical professional, Laurel Road has several unique services tailored especially to your situation. This includes a residency and fellowship repayment option that allows you to pay just $100 per month until you become an attending physician. This will enable borrowers to immediately lower interest rates and keep payments down until their finances allow for higher payments.
Finally, Laurel Road offers a $150 bonus to new customers. Borrowers should still focus on finding the lender who provides the best interest rates, but the new customer bonus is a nice perk for going through the steps to refinance.
Disadvantages and Concerns
The drawbacks to Laurel Road apply to pretty much every other lender on the market.
First, they allow consolidation of federal student loans in their private loan refinance. For some borrowers, this is a very smart financial move. Reducing the interest rates on federal loans can save thousands over the life of the loan. However, taking this step could also be a huge mistake because it means that student loan forgiveness programs and income-driven repayment plans are no longer an option. Make sure you are certain you want to give up the perks of having a federal student loan before you refinance.
Second, Laurel Road does offer a co-signer release program, but borrowers should advise their co-signers not to expect or rely upon a co-signer release. For starters, borrowers are not able to even apply for a co-signer release for the first 36 months their loan is in repayment. At that point, a release application can be submitted, but won’t necessarily be approved. Because of the many steps and uncertain nature of co-signer release programs, we encourage all co-signers on all loans to plan on being on the loan until it is paid in full.
Things to Know About Laurel Road
In preparing the Laurel Road refinance review, we reached out to ask for some additional information that might be hard for most borrowers to track down. Here is what we learned.
- Laurel Road loans are serviced by MOHELA. Of the many companies that service student loans, MOHELA is usually considered to be among the best.
- Borrowers without a degree will not be able to refinance with Laurel Road, but those with an associate’s degree can be refinanced up to $50,000.
- Parents with Parent PLUS loans are also able to refinance with Laurel Road. A Parent PLUS loan can also be refinanced in the name of the child for whom the loan was borrowed.
- Laurel Road uses TransUnion credit reports.
- Loans are usually funded within 20 days from the date the application is submitted, but this timeline depends upon how fast borrowers submit requested documents.
Final Thoughts on the Laurel Road Review
Laurel Road, has consistently appeared in the top five of our student loan refinancing rankings. Not only does Laurel Road currently advertise some of the best rates on the market, but they also have a reputation for actually offering those low rates to borrowers. For this reason, checking rates with Laurel Road is usually time well spent for borrowers looking to refinance.
However, while Laurel Road scores high in our metrics, it shouldn’t be the only place that borrowers check rates. Each borrower has a different credit profile and each lender evaluates applications differently. All borrowers should check rates with 3-5 lenders to make sure they are getting the lowest rate possible.