Lori Meadows
Student loans can be a burden on borrowers for a lifetime, interfering with financial goals and standard of living. LendKey is a platform that offers student loan refinancing and private student loans, providing an opportunity for borrowers to pay off their student loans early without any penalties. With competitive interest rates, flexible repayment options, and loan servicing, LendKey helps borrowers tackle their student debt more effectively. By understanding the various features and benefits of LendKey's services, borrowers can make informed decisions about managing and potentially eliminating their student loan debt.
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What You'll Learn
- LendKey does not charge prepayment penalties
- Student loan refinancing could result in a longer loan term
- Some companies offer student loan repayment assistance as a workplace benefit
- Lenders in LendKey's network are mostly smaller, local banks and credit unions
- Borrowers can release their cosigner after 24 consecutive on-time payments
LendKey does not charge prepayment penalties
Student loans can be a burden on borrowers for a lifetime, interfering with long-term financial goals. LendKey offers student loans, refinancing, and home improvement loans. They do not charge prepayment penalties, meaning there are no fees for making extra payments to reduce a refinance loan balance or paying off a loan early. This is a common fee that many refinance lenders charge, but LendKey does not.
LendKey's refinancing options can help borrowers pay off their student loans early. They offer refinancing to borrowers without a degree and to international students, as well as loans to students in all 50 states. LendKey also has no affiliation with the federal government or the U.S. Department of Education, so borrowers can refinance federal student loans with LendKey without losing eligibility for specific federal benefits.
Borrowers can also take advantage of LendKey's partnership with Curu, a platform that provides comprehensive credit analysis to help borrowers improve their credit health. Curu's analysis can help borrowers ensure they are on the right path to credit success and provide a comprehensive view of their financial accounts.
LendKey also offers extended forbearance for longer loan terms, which can serve as a safety net for borrowers. However, borrowers are required to make payments while they are still in school. Additionally, LendKey does not offer biweekly payments via autopay, which may be a disadvantage for some borrowers who wish to pay off their loans faster and pay less in interest over time.
Overall, LendKey's lack of prepayment penalties and refinancing options can help borrowers pay off their student loans early and improve their financial health.
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Student loan refinancing could result in a longer loan term
Student loan refinancing can be a great way to save money and simplify your loan payments. By refinancing, you can often lower the amount of interest you owe every month, helping you save more on your monthly payments over time. For example, if you have a $100,000 student loan with a standard 7% interest rate, you will pay just below $40,000 in total interest over a 10-year loan, averaging about $1,160 per month. By refinancing to a 4% interest rate, you can save about $150 per month in interest and nearly $18,000 over the course of a decade.
However, student loan refinancing could also result in a longer loan term. When you refinance, you can choose a new repayment term, which may be longer than your previous loan term. While a longer repayment period can reduce your required minimum monthly payment, even if the interest rate reduction is less than expected, it will also mean that you are paying off your loan for a longer period of time. For example, if you refinance your loan halfway through the repayment period, you may benefit from lower monthly payments for the rest of the term, but it may stretch out the amount of time it takes to pay off the loan completely.
Therefore, it is important to carefully consider the pros and cons of refinancing your student loan and to review your financial goals before making a decision. While refinancing can offer lower interest rates and more flexible repayment options, it may also result in a longer loan term and the loss of certain protections and benefits associated with federal loans, such as income-driven repayment plans and loan forgiveness programs. Additionally, refinancing may not always result in a significantly lower interest rate, so it is recommended to use student loan refinancing calculators to determine the potential savings before making a decision.
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Some companies offer student loan repayment assistance as a workplace benefit
Student loans can be a significant burden, often interfering with long-term financial goals and standard of living. As such, many borrowers opt to pay off their loans early. One way to do this is by refinancing to a lower interest rate, which reduces monthly payments and the total cost of the loan.
Some companies have recognized the burden of student loan debt on their employees and have implemented programs to help pay it off. In fact, according to an American Student Assistance (ASA) survey, 86% of employees would commit to a company for five years if the employer helped pay down their student loans. This benefit can help businesses attract and retain talent, with 45% of workers considering student loan repayment assistance the single most important employee benefit.
There are two main categories of student loan repayment assistance: direct repayment programs and discretionary programs. Direct repayment programs involve employers putting cash payments directly toward an employee’s student loan through recurring payments or matching the employee’s contributions each month. A discretionary program, on the other hand, allows employees to allocate their company’s discretionary benefit dollars to student loan debt, giving them more autonomy over their benefits.
Some companies that offer student loan repayment assistance include:
- Financial services company Ally, which provides employees with $100 monthly toward student loan repayment, with a $10,000 lifetime maximum.
- Chegg, an educational services company, which offers a respectable annual boost to student loan repayments, even for those who did not graduate with a degree.
- Clayco, a construction engineering company, which offers student loan repayment assistance to employees who make at least the minimum payment each month. Employees can choose to receive $100 per month toward their student loans for the first year, increasing by $50 each subsequent year up to a maximum of $250 per month in the fourth year.
- Fidelity, a financial services company, which offers employees a student loan repayment benefit with a lifetime maximum of $15,000.
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Lenders in LendKey's network are mostly smaller, local banks and credit unions
Yes, you can pay off a LendKey student loan early. LendKey offers refinancing solutions to help borrowers pay off their student loans early. Refinancing your student loan could free up money for an emergency savings account. Refinancing typically offers a single lower interest rate relative to your existing loans, which results in a lower minimum monthly payment and reduces the total cost of the loan.
LendKey's lending solutions allow lenders to customize digital loan programs to suit their target borrowers' needs. They can choose risk criteria that align with their objectives and adapt parameters to changing market dynamics. LendKey's web-based application processes are secure, fully compliant, and auditable, making it easy for financial institutions to trace their origination processes, review loan files, and track performance.
LendKey also offers free tools and online resources to help borrowers succeed. It has partnered with Curu, a platform that provides comprehensive credit analysis to help borrowers improve their credit health. Curu displays real-time financial account information in one place and sends notifications for upcoming credit card payment due dates. LendKey also partners with Savi, which provides an online concierge service that searches across 150+ federal loan forgiveness and repayment options.
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Borrowers can release their cosigner after 24 consecutive on-time payments
LendKey does not penalize borrowers for paying off their loans early. There are no penalties for early payments or for repaying a loan in full before its term is over. However, the time it takes to release a cosigner from a LendKey loan is unclear. LendKey partners with credit unions and community banks, each of which has its own internal policies. Therefore, borrowers are advised to check with their specific lender to confirm their cosigner release policy.
To release a cosigner from a loan, borrowers must make 24 consecutive on-time payments. This process can be facilitated by setting up automatic payments from a bank account. This way, the desired monthly payment is withdrawn from the borrower's bank account at the end of each month.
LendKey offers two repayment options on its private student loans, both of which require in-school payments. The first is a flat-fee repayment, and the second is an interest-only repayment. While LendKey does not offer biweekly payments via autopay, borrowers can make greater-than-minimum payments through this method.
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Frequently asked questions
Yes, you can pay off your LendKey student loan early. LendKey does not charge any prepayment penalties, so if you can pay off your loan early, you won't be charged for it.
Paying off your student loan early can help you reduce the cost of your loan significantly. It can also help you build an emergency financial cushion or save for a down payment on a home.
You can pay off your LendKey student loan early by making greater-than-minimum payments via autopay. You can also set up automatic payments for more than your monthly balance to reduce the interest that accrues over time.
Yes, you can consider refinancing your LendKey student loan. Refinancing can help you lower your interest rate and reduce the total cost of the loan. You can also look into student loan repayment assistance programs offered by some employers.
