Splash Financial Refinancing
Splash is new to student loan refinancing and consolidation but the rates are solid and worth investigating.
Article Updated October 9, 2018 to reflect the latest available interest rate information and a new customer promotion of up to $2,000.
The latest company to enter the student loan refinance marketplace is Splash Financial. Splash Financial first entered the student loan refinance business as a lender focusing exclusively on young doctors in their residency or in a fellowship. This year Splash Financial opened up their services to all college graduates. The new program features competitive interest rates, but might not be the best choice for all student loan borrowers.
Splash Financial Basics
Splash offers both fixed-rate and variable-rate student loan refinancing and consolidation. Borrowers have the option of 5, 8, 12, and 15 year refinancing. This represents a slight deviation from the more typical industry standard of 5, 7, 10, 15, and 20 year repayment periods.
Interest rates at Splash start at 2.91% for the 5-year variable-rate loan and 3.75% for the 5-year fixed-rate loan. Borrowers wishing to refinance or consolidate with Splash can borrow a minimum of $7,500 up to a maximum of $300,000. Like other legitimate lenders, there are no prepayment or loan origination fees with Splash Financial.
Splash requires applicants to have at least $42,000 per year in income and a credit score above 700. Borrowers with an income between $25,000 and $41,999 or a credit score between 670 and 699 are eligible for approval if they apply with a cosigner.
Splash Interest Rates
The refinance rates with Splash are among the best in the industry.
Borrowers considering Splash would be wise to consider the 5-year variable rate loan, as the 2.91% is the lowest rate offered by splash. Another repayment option worth strong consideration would be Splash’s 15 year fixed rate loan, starting at 4.91%. The slightly lower rates offered on the shorter term loans don’t really justify the higher payments and reduced flexibility caused by the shorter repayment length. Borrowers can always opt to pay extra to pay off the loan faster, but the very slight interest rate premium for the longer fixed rate loan makes it a better choice.
Splash Advantages – Where Splash Financial Excels
Interest rates with Splash are very solid and usually within .5% of the top lenders in the industry. Graduates looking to refinance would be wise to check their rates with Splash as all lenders evaluate applications according to customer criteria and depending upon individual circumstances, Splash may end up offering the best rate.
One aspect of Splash that we especially liked in our review of the company was how they responded to criticism in their initial refinance product that was designed just for doctors. Splash charged loan origination fees and received justifiable criticism. Splash responded to the consumer complaints and eliminated all loan origination fees. No lender gets everything right, and it is a very good sign when a lender accepts responsibility for an error in judgment and makes things better.
Though Splash now serves a wider audience, the specialty of Splash is still refinancing for doctors. They even offer special rates for the doctors that are still in training.
Borrowers interested in repayment terms of exactly 8 or 12 years will find that Splash is one of the few companies offering that particular repayment length. The rates offered are also excellent compared to the 7 and 10 year loans offered by other lenders. Splash is a great choice for mid-length loans.
A final advantage to Splash is that they offer new customers a bonus of up to $2,00 for signing up. However, the $2,000 promotion is limited to borrowers who refinance at least $200,000 in student loans. Borrowers who refinance at least $100,000 can get a $1,000 bonus and borrowers who refinance at least $50,000 can get a $500 bonus. This Splash promotion will be running until November 30, 2018. We think the bonus is nice, but in the long run the rate will be the number that really makes a difference in a consumer’s bottom line.
Splash Disadvantages – Some Red Flags to Review
The two major disadvantages with Splash apply to nearly all student loan refinancing companies.
First, Splash Financial offers consolidation and refinancing of federal student loans. For some borrowers this move makes sense, but for others it can be a mistake. When borrowers refinance federal loans, they give up perks such as income-driven repayment plans and forgiveness programs like Public Service Loan Forgiveness. For some, the lower interest rates justify giving up the federal protections. For others, it is a huge mistake. Federal borrowers should carefully consider their options before refinancing loans with a private lender.
The second issue to highlight is the Splash cosigner release program. Splash advertised that a cosigner can be released from the loan after one year of on-time payments. All cosigners should understand that they are committed to the loan for the life of the loan and that a cosigner release is far from a certainty. Securing a release requires a re-evaluation of the borrower’s credit and there is very little incentive for any lender to grant this release.
Finally, we also note that Splash is a very young company. In some cases this can mean a great opportunity for consumers and in others it can be the cause of headaches. As we hear back from Splash borrowers we will update this article to reflect their thoughts on the quality of Splash services. That being said, Splash loans are serviced by PenFed, a long-standing credit union with a sterling reputation. The PenFed relationship should reduce or eliminate many of the “new lender” concerns associated with Splash.
Splash may be new to student loan refinancing, but their refinancing and consolidation products seem to be the real deal. As a result Splash checks in at a very respectable 6th out of 18 lenders in our student loan refinance lender rankings. Borrowers looking to lock in lower student loan interest rates would be wise to check their rates with Splash to see how they stack up against other lenders.