Updated April 2, 2018

Laurel Road Student Loan Review: Pros and Cons

This article contains references to products from our partners. We may receive compensation if you apply or shop through links in our content. You help support CreditDonkey by reading our website and using our links. (read more)

If your student loan interest is too high, consider refinancing with Laurel Road. But wait. Read this review to learn how it works and what to watch out for.

Overall Score

4.6

Customer Service

4.5

Loan Term

5.0

Ease of Use

5.0

Interest Rates

4.0

Payment Flexibility

4.5
5-point scale (the higher, the better)

Pros and Cons

  • Low repayment options for medical residency
  • Keep federal grace period
  • Forgiveness is available due to disability
  • No mobile app
  • Forbearance options are on a case-by-case basis

Bottom Line

Good option to maintain your federal loan grace period

Darien Rowayton Bank (DRB) is one of the biggest players in the student loan refinancing market. As of June 2017, DRB is now referred to as Laurel Road. Nothing has changed with their offerings other than the look and feel of their website.

Refinancing is a great option to get a break on your current rate.

But before you go ahead with one, remember:

Refinancing your debt is just as big a deal as signing up for the first loan - you need to do your homework and compare terms and lenders.

Read our review of Laurel Road. You will find out the benefits of refinancing, what to watch out for, and how this bank measures up against other refinance lenders.

10 REASONS TO Use Laurel Road

  1. Competitive rate. Laurel Road offers some of the lowest and most narrow rate ranges around.

  2. You can pick your loan term. Laurel Road lets you choose from 5, 7, 10, 15, or 20 years. On both their fixed and variable loans. Giving you flexibility in deciding how long you need to pay them off.

    And if you want a different term, Laurel Road will work with you to come up with the term you want, if it's under 20 years.

  3. You can save money. Less money spent on interest payments = more money towards the principal. This means you will pay off your loans faster.

    That means that over the life of the loan, more money stays in your pocket. According to the Laurel Road website, the average savings is about $20,000.

    Compare with other lenders. Shop around with different lenders to see who gives you the best rate. You can get multiple rate quotes with no obligation. Check out some of those top student loan refinance lenders.

  4. No limit on what you can refinance. Some lenders limit the amount you may refinance, but Laurel Road has no maximum limit. There is a minimum of $5,000 in loans to qualify.

  5. You won't pay fees to refinance. The whole point of refinancing is to save money. You don't want to throw away any of your hard-earned dollars on fees. Laurel Road doesn't charge an application or loan origination fee. And you won't pay a penalty fee for repaying your loans early.

  6. You can put your loans on hold if you lose your job. Laurel Road will give you up to a 12-month forbearance period if you become unemployed. Which means one less stress to worry about.

  7. You won't lose your grace period. Laurel Road will honor a deferment or grace period from your current lender. If you're in a medical residency, you may be able to defer your payments until six months after it ends.

  8. Additional rate discount if you're a Laurel Road customer. Have a checking account with DRB? You can get an extra 0.25% knocked off your interest rate when your loan is set up for automatic payments.

  9. You can get paid for spreading the word about Laurel Road. Any time a friend or family member refinances with Laurel Road, you'll get a $400 cash referral bonus. There's no limit on how many people you can refer, so it's an easy way to earn extra money that you can put towards your loans.

    You can also choose to share some of this referral money with the person you referred. They have an easy-to-use sliding scale to determine your bonus.

  10. You're not restricted based on where you live. Some refinance lenders only offer loans in certain states. This is a problem for some borrowers. Laurel Road is available in all 50 states, so that's one less obstacle you must overcome.

WHAT ARE THE RISKS?

In most cases, refinancing student loans to get a lower interest rate seems like a smart thing to do. But there are a few things to consider:

  • You're taking a risk on refinancing federal loans. Laurel Road will let you refinance your federal and private student loans together. This is not always a good idea.

    When you roll a federal loan into a private one, you lose several important benefits of the federal loan. The option to enroll in an income-driven repayment plan. Or forgiveness of your loans if you go into a public service career. This is important to consider if you may want to work in the public sector or won't have a higher income for years.

  • You could end up with a much higher rate. Laurel Road offers a variable rate loan option. That sounds great. Your actual loan rate can go up if the 3-month Libor index, to which the variable rate is tied, climbs. The maximum variable APR tops out at 9% for 5- and 10-year loans and 10% for 15- and 20-year loans. Those rates could be higher than what you have currently.

  • You may need a co-signer. When you apply for a refinance loan, your credit is going to be put under a microscope.

    If you can't meet the minimum standards, you'll need a co-signer to get a loan. Not able to find someone who's willing to put their credit reputation on the line for you? Then refinancing might be out of the question.

IS NOW A GOOD TIME TO REFINANCE?

© Francisco Osorio (CC BY 2.0) via Flickr

Common sense dictates that the best time to refinance is when interest rates are low. Right now, rates are near historic lows and have been for a while - but they won't stay that way.

Whether you should refinance now depends on what kind of rate you qualify for. If your credit isn't that great now, you may be better off waiting until it improves. But, if you've got a high score, you'll want to try and cash in on lower rates before they go up.

CAN ANYONE REFINANCE WITH Laurel Road?

© Beraldo Leal (CC BY 2.0) via Flickr

Laurel Road has some guidelines you must meet to be eligible for refinancing. The bank wants to see that you've completed a degree and established yourself in a career. Or at least have an offer waiting.

Your credit score and income still come into play, but those aren't the only things the bank wants to know.

Here's a rundown of what the bank requires:

  • You must be a U.S. citizen or permanent resident
  • You must have a bachelor's, graduate, or professional degree
  • You must be employed
  • You must have at least $5,000 in loans
  • You must meet the credit underwriting standards

Are you a professional in the medical field? You'll also need to have a license to practice and proof of malpractice insurance.

Applicants who decide to go forward with Laurel Road need to provide the bank with background information. This may include pay stubs, student loan statements, and proof that you've graduated.

As far as getting approved goes, your credit history and score carry a lot of weight, as do your income and work history. If you don't have the kind of credit score that Laurel Road is looking for, you'll either need to get a co-signer or look for another lender to refinance with. Looking at your credit reports before you apply can give you an idea of what your odds are.

WHAT'S THE APPLICATION PROCESS?

© Franco Folini (CC BY-SA 2.0) via Flickr

Signing up for a Laurel Road loan is like signing up for a bank account. To start a refinance application with Laurel Road, you need to fill out a short online form to find out if you're eligible. You'll need to enter the name of your school, the state where it's located, your citizenship status, and email address.

If you're eligible, you can move on to the next phase. You'll need to create an account with a unique user name, password, and security question. From there, you'll add in more detailed information, including:

  • Your name
  • Address
  • Social Security number
  • Employer name
  • Income
  • Birth date
  • Driver's license number
  • Loan account information

After you've entered the required information, you can submit your application online. If you're approved, Laurel Road will pay off your old loans with the new one. Once the old loans are zeroed out, you start making monthly payments to Laurel Road.

IS IT WORTH IT?

© mail_collector (CC BY 2.0) via Flickr

Refinancing is all about getting the best rate that you can get. You may not get the lowest advertised rate you see. Some borrowers are going to save more money than others. If you've got great credit, you're more likely to get a better rate than if you just have an average FICO score.

And if the rate you're offered isn't as low as what you were expecting, there's no obligation to move forward with the refinance.

Someone who has a lot of time left on their loan is also going to get more value out of refinancing. Most of the money you pay in the early years of the loan goes towards the interest. If you've only got a year or two left, refinancing might not be worth the effort.

HOW DOES IT COMPARE?

© John Loo (CC BY 2.0) via Flickr

There's a lot of overlap among the firms that refinance student loans, but they are also different in many ways. To finish up our review, we've compared Laurel Road to three other companies that can help you save on your loans.

SoFi

 

Laurel Road Student Loans

SoFi Student Loans

 

Benefits and Features

Variable APR
2.99%-6.42%
2.570% to 6.980% APR (with AutoPay)
Fixed APR
3.5%-6.99%
3.899% – 8.179% APR (with AutoPay)
Minimum Amount
$5,000
$5,000
Maximum Amount
No maximum
No maximum
Loan Term
5 to 20 years
5 to 20 years
State Residency
All states eligible
All states eligible
Degree Requirements
Bachelor's or higher
Associates or higher
Income Requirements
None
None
Employment RequirementsMust be employed or have an offerMust be employed or have an offer to start within 90 days
Interest Only Payments
No
No
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
Yes
Can release a cosigner
Varies case by case
No
Auto-Pay Interest Rate Reduction
Yes
Yes
Soft Credit Check
Yes
Yes
Unemployment Protection
Yes
Yes
Customer Service
Loan Term
Ease of Use
Interest Rates
Payment Flexibility
 Learn More
 Terms Apply. SoFi Disclaimers

Laurel Road: Pricing information from published website as of 03/18/2018

SoFi: Pricing information from published website as of 08/03/2018

EARNEST

Like Laurel Road, Earnest offers refinancing for fixed and variable rate loans, with terms lasting from 5 to 20 years. This lender handles both federal and private loan refinancing for borrowers who've completed a degree and have at least $5,000 in debt.

 

Laurel Road Student Loans

Earnest Student Loans

 

Benefits and Features

Variable APR
2.99%-6.42%
2.57%-5.87%
Fixed APR
3.5%-6.99%
3.25%-6.32%
Minimum Amount
$5,000
$5,000
Maximum Amount
No maximum
No maximum
Loan Term
5 to 20 years
5 to 20 years
State Residency
All states eligible
Most states with the exception of: AL, DE, KY, NV, and RI and no variable rate loans to residents of: AK, IL, MN, NH, OH, TN and TX
Degree Requirements
Bachelor's or higher
Associates or higher
Income Requirements
None
None
Employment RequirementsMust be employed or have an offerMust be employed or have an offer for a position to start within 6 months
Interest Only Payments
No
No
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
No
Can release a cosigner
Varies case by case
Only on existing loans
Auto-Pay Interest Rate Reduction
Yes
Yes
Soft Credit Check
Yes
Yes
Unemployment Protection
Yes
Yes
Customer Service
Loan Term
Ease of Use
Interest Rates
Payment Flexibility

Laurel Road: Pricing information from published website as of 03/18/2018

Earnest: Pricing information from published website as of 03/18/2018

CITIZENS BANK

Citizens Bank is another traditional bank with more than 1,100 branches around the country. You'll need to have at least $10,000 in loans to refinance with Citizens Bank, which won't snub you if you didn't get your degree. You can't be enrolled in school to qualify. And your current loans can't be in an income-driven repayment plan.

 

Laurel Road Student Loans

Citizens Bank Student Loans

 

Benefits and Features

Variable APR
2.99%-6.42%
2.63%-7.98%
Fixed APR
3.5%-6.99%
3.20%-8.34%
Minimum Amount
$5,000
$10,000
Maximum Amount
No maximum
$350,000
Loan Term
5 to 20 years
5 to 20 years
State Residency
All states eligible
All states eligible
Degree Requirements
Bachelor's or higher
None, but you must have made 12 on-time payments to be eligible
Income Requirements
None
$24,000
Employment RequirementsMust be employed or have an offerMust be employed or employed before first payment due date
Interest Only Payments
No
No
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
Yes
Can release a cosigner
Varies case by case
Yes
Auto-Pay Interest Rate Reduction
Yes
Yes
Soft Credit Check
Yes
Yes
Unemployment Protection
Yes
Yes
Customer Service
Loan Term
Ease of Use
Interest Rates
Payment Flexibility

Laurel Road: Pricing information from published website as of 03/18/2018

Citizens Bank: Pricing information from published website as of 03/18/2018

What we like about Citizens Bank
If you need a co-signer to get approved for a refinance, Citizens Bank gives you the option to release them from the loan after you make 36 months' worth of on-time payments.

Why we like Laurel Road better
Citizens Bank limits you to refinancing, depending on your degree. With only a bachelor's degree they will refinance up to $90,000, but with a medical degree, they will refinance up to $350,000. With Laurel Road, there's no upper limit on the amount of debt you can refinance. That makes it the more attractive choice for professionals who borrowed heavily to get through medical school or law school.

LENDKEY

LendKey isn't quite as well-known as Laurel Road or the other lenders we've profiled, but it's still worth a look. The company connects borrowers with a network of credit unions to help you get the best deal on your federal and private loans.

 

Laurel Road Student Loans

LendKey Student Loans

 

Benefits and Features

Variable APR
2.99%-6.42%
2.56%-7.74%
Fixed APR
3.5%-6.99%
3.15%-8.12%
Minimum Amount
$5,000
$7,500
Maximum Amount
No maximum
$300,000
Loan Term
5 to 20 years
5 to 20 years
State Residency
All states eligible
Most states except: ME, ND, NV, RI, and WV
Degree Requirements
Bachelor's or higher
Bachelor's or higher
Income Requirements
None
$24,000
Employment RequirementsMust be employed or have an offer
Must be employed
Interest Only Payments
No
Yes for the first 4 years
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
Yes
Can release a cosigner
Varies case by case
Yes
Auto-Pay Interest Rate Reduction
Yes
Yes
Soft Credit Check
Yes
Yes
Unemployment Protection
Yes
Yes
Customer Service
Loan Term
Ease of Use
Interest Rates
Payment Flexibility

Laurel Road: Pricing information from published website as of 03/18/2018

LendKey: Pricing information from published website as of 03/18/2018

What we like about LendKey
LendKey's rates are comparable to what Laurel Road offers, but it has an advantage as far as repayment options go. For example, you could choose to make interest-only payments on your loans during the first four years.

Why we like Laurel Road better
We'd still go with Laurel Road based on how much borrowers stand to save. According to LendKey's website, their borrowers save an average of $16,000 versus the $20,000 average savings you could get with Laurel Road.

THE BOTTOM LINE ON REFINANCING WITH Laurel Road

Refinancing with Laurel Road makes sense for borrowers who have a lot remaining in outstanding loans and qualify for the best interest rates based on their credit. There is some risk if you're taking out a variable rate loan since the maximum rates are set so high. But that may not be an issue if you're going with a shorter loan term or making extra payments to clear the debt faster.

One other issue to consider is you may need a co-signer to qualify. And if you plan to release them from your loans, you may not be eligible for at least 36 months. They might not be comfortable having their name on the loan for the long term.

Rebecca Lake is a journalist at CreditDonkey, a student loan comparison and reviews website. Write to Rebecca Lake at rebecca@creditdonkey.com. Our data-driven analysis has been recognized by major news outlets across the country and has helped young adults make savvy decisions. (read more)

Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

More from CreditDonkey:


How to Build Wealth in Your 20s


10 Financial Pitfalls to Avoid in Your 20s


Smart Career Moves

More Articles in Reviews

May
28
2017

Lenovo Reviews

Lenovo laptops are popular. But does that mean this brand is a must-have? Read this review before you buy a laptop.







About CreditDonkey®
CreditDonkey is a student loan comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: Many of the card offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.