Sherpa Rating
LendKey works with local credit unions to find low rates for borrowers with less-than-perfect credit.
Refinancing is still risky for federal loans because it permanently erases all federal student loan benefits.
LendKey’s unique network of local banks and credit unions often results in the lowest interest rate available for many borrowers.
Other lenders may offer better interest rates.
LendKey Student Loan Refinance Review Overview
LendKey ranks highly in the Student Loan Sherpa Refinance Lender Rankings because they have a long track record of approving borrowers that other lenders reject and offering low interest rates.
However, there are some red flags with LendKey that borrowers should review before moving forward.
LendKey Basics
LendKey offers a wide range of loans and has very competitive interest rates.
| LendKey Overview | |
|---|---|
| Loan Terms | 5, 7, 10, 15, and 20 Years |
| Variable Rate Loans | 5.02 - 8.18% |
| Fixed Rate Loans | 4.49 - 10.68% |
| Minimum Refinance Amount | $5,000 |
| New Borrower Bonus | $150 |
Borrowers can refinance both federal and private loans with LendKey. Like most legitimate lenders, LendKey does not charge application fees, origination fees, or prepayment penalties.
How does LendKey Refinancing work?
The application process is identical to any other lender. Borrowers fill out basic loan information and authorize a credit check. At the end of the process, LendKey matches borrowers with a local credit union that provides the funds for the loan.
This approach aims to allow smaller credit unions and local banks to compete on a national scene. By working together, they can reduce advertising costs, enabling them to offer the lowest interest rates on the market. However, because they are local credit unions, acceptance rates tend to be slightly higher than many national lenders.
The LendKey Pros
Without question, the big advantage to LendKey is the lower interest rates paired with more forgiving underwriting criteria. Many borrowers refinance with LendKey for the first time. As their credit scores and income improve, they may refinance again with a new lender at an even lower rate.
LendKey also advertises an interest-only repayment option for the first four years of the loan. While it sounds nice, it is something we likely wouldn’t recommend for most circumstances. That said, if you are a resident physician or someone who will have a relatively low salary before an expected significant hike, it could be an excellent route.
Finally, LendKey is currently offering a $150 bonus to new customers. We don’t think $150 is enough to tip the scales one way or another when it comes to finding the best lenders, but it is a nice perk.
LendKey Refinance Reviews from Reddit, the BBB, and Others
In preparing the LendKey refinance review, I looked at consumer feedback from other sources to find common complaints.
When researching lenders, consumer complaints are expected. The major red flags come if the same complaint keeps coming in or if there are an unexpectedly large amount of borrower complaints. I observed no such red flags with LendKey.
Here is what I found at various resources:
The Consumer Financial Protection Bureau (CFPB) – The CFPB database on LendKey complaints looks fairly standard. LendKey has more complaints than some lenders, but not a concerning amount. The most common issues raised were from borrowers who had problems with payment processing and falling behind on payments due to financial hardships.
The Better Business Bureau (BBB) – For a lender that has been in business for a long time, I was surprised to see only six customer complaints on the BBB site. Most of the complaints were from people with rejected applications, but this trend applies to most lenders.
Reddit – Looking through the student loans subreddit posts about LendKey, most people seemed satisfied with LendKey and pleased with the interest rates offered. One person did complain about the time it took LendKey to process payments, which was also an issue raised in the CFPB database.
Student Loan Sherpa Readers – In general, reader feedback on LendKey is somewhat limited compared to other lenders. Generally speaking, fewer reader comments with complaints is a positive sign. I’d also add that when I have personally helped readers shop around, LendKey approval rates and offered interest rates have been very competitive. Often they are the best on the market.
A Warning About LendKey and Others…
LendKey refinances private loans with federal government loans. Going this route makes sense in some circumstances, but it could be a massive mistake in others. Because there is no way to “undo” a student loan refinance, it is essential that the borrowers know whether combining their federal and private loans is a good idea.
Borrowers who are worried about a possible job loss or income reduction in the future would be wise not to refinance their federal loans. Federal loans come with borrower protections that no private lender can match.
Switching from one private lender to another does not carry the same risk. Borrowers with private loans can utilize a refinance to lock in lower interest rates and lower monthly payments. For this reason, it is often advisable to only refinance private loans.
LendKey: Frequently Asked Questions
Yes. LendKey has been in business since 2009, and they don’t engage in shady practices like charging loan application fees or early payment penalties.
Checking rates with LendKey does not result in a hard credit pull. The initial rate check is “soft” and does not impact your credit score.
If a borrower decides to refinance with LendKey, there is a hard credit check. This is the procedure used by all refinance lenders.
If you are shopping for student loans, LendKey is a company that deserves consideration.
Ultimately, whether or not LendKey is a good option will depend almost entirely upon interest rates. Click here to check rates directly with LendKey.
The rates in this article are bullshít. You should update them as no lender can offer rates this low. In fact, I went through Lendkey myself but they could not even put together a loan.
Students loans are much more complicated issues now-a-days. But there are so many choices. Thanks for your good review
Lendkey reps were always pleasant while speaking with them, but nobody could give me the correct answer about my loans. It took way too long for lendkey and nelnet to communicate leading to a high principle amount because of the time it took to switch over.
I also was told that when paying extra, it would be separate from my automatic monthly payment. this was also not true. Their website takes >/= 1 week to become accurate after payments and is not very user friendly.
The low interest rate was nice but the website is inconvenient and if you plan to pay your loan off faster than intended with automatic payments, don’t choose lend key. Because I paid extra towards my loan my automatic monthly payment was lowered, therefore making it even more difficult for me to knock down the principle amount.
thumbs down honestly, and I rather have stuck with Nelnet and paid extra than have switched to lendkey.
If you’ve consolidated once before at say 7%, can you sell off/reconsolidate for a better percentage?
Can you consolidate your private loans but not your federal?
Yes you can. It can be a really smart move to go this route.
Lendkey was very disorganized with my application. They pulled my credit as well as my cosigners and did not give me an offer, call me back, or return any of my calls. Avoid at all costs!
Students loans are much more complicated than I realized. There is so many choices and pitfalls. Thanks for the information.
I agree.