March 22, 2018

LendKey Review


Saving thousands of dollars on your student loans sounds perfect, and that's just what LendKey promises. Is it the real deal, though?

Overall Score

4.4

Customer Service

5.0

Loan Term

5.0

Ease of Use

3.5

Interest Rates

5.0

Payment Flexibility

3.5
5-point scale (the higher, the better)

Pros and Cons

  • Offer interest rate reduction beyond auto-debit reduction
  • Excellent customer service
  • Return policy within 30 days you can return your loan
  • Cumbersome application process
  • Lack of transparency regarding loan documents

Bottom Line

Good option for customer service

LendKey filled a void that existed in the student loan refinancing industry. Small banks and credit unions didn't have a way to extend their reach beyond their small community. Advertising their rates and offering online applications is often too costly for them.

Enter LendKey, the company that brings small banks and/or credit unions together with potential borrowers.

What Is LendKey?

LendKey helps take the confusion out of shopping for a student loan refinance. With one simple platform, they give you access to hundreds of banks vying for your business. Don't confuse LendKey with lenders, though. They are a third-party online platform that connects you to the banks and credit unions offering the loans. You use LendKey to apply for the loans and from there, get matched with appropriate lenders.

If you choose a loan, you then move forward with the chosen bank. LendKey does not underwrite or fund the loan. LendKey offers its service free of charge to borrowers. The only cause for concern is the hard credit inquiry that will occur if you choose a lender and go through the application process with them. However, that would be the case no matter where you applied for a student loan refinance.

LendKey promises that you will lower your payments and simplify your finances. They also promise the chance to receive multiple offers with different options for your comparison.

Keep reading to see just how LendKey stacks up to its promises.

Who Benefits from LendKey?

© CreditDonkey

If your income and/or credit situation has improved since you graduated college, refinancing your student loans may help. If you don't have the time or wherewithal to do the research yourself, LendKey helps you understand your options all in one portal. It takes the confusion and effort out of the process.

All you need in order to find out your available rates is to enter basic information about yourself. At this point, they conduct a soft credit inquiry, which does not affect your credit score. This gives you the chance to run the numbers and see if you actually benefit from a refinance.

A lower rate doesn't always mean you should do it. Look at all of your refinance options, including any federal programs (such as forgiveness programs), to make sure this is the right choice.

Reasons Why We Like It

© CreditDonkey

Assuming that refinancing your student loan debt is the right choice, we like LendKey for the following reasons:

  • Flexible underwriting guidelines: Because LendKey matches you with one of hundreds of lenders in their network, you'll find more flexibility with the underwriting guidelines compared to applying with lenders one at a time.

  • No origination fees: Lenders networking with LendKey do not charge an origination fee for their service. This could save you thousands of dollars on the refinance.

  • Have multiple options in one user-friendly portal: The offers you receive after completing the application are pre-screened offers. You can compare the offers without affecting your credit score. They base your approvals on your location, degree, types of loans, and loan amounts. The offers are then contingent upon proof of your income and credit score.

  • Release a co-signer: After you successfully make 12-36 consecutive months of on-time payments, you may apply for a co-signer release. This gives you full ownership of the loan and releases your co-signer's liability.

  • Simply your finances: Consolidating multiple student loans into one loan makes it easier to keep track of your balance and what you owe. It may eliminate confusion and even late payments by making your finances easier to handle.

  • Consolidate private and federal student loans into one loan: You may be eligible to consolidate any type of student loan, including federal loans. However, you may want to consider all of your options before doing so.

  • Fixed or variable rate options: LendKey matches you with lenders that offer both fixed and variable rate options. You can compare the different programs using LendKey's refinancing calculator to determine if refinancing is right for you.

  • Discount for automatic payments: Once you accept a loan from LendKey, you can opt for automatic payments. This will reduce your rate by one-quarter of a percent.

Reasons You May Want to Look Elsewhere

  • You have federal student debt: As we discussed above, it's not always a good idea to consolidate your federal student loans. The government offers a variety of repayment and even forgiveness options, including longer repayment periods, income-based repayment plans, and even plans that forgive your balance after meeting certain criteria. Refinancing with LendKey would eliminate these options.

  • You don't have time to research the banks: LendKey doesn't do the research on the banks for you, nor do they offer any information on them. If you want to know a bank's reputation or the fine print that goes along with the loan, you have to call the bank yourself. This could mean more hours conducting research online or making phone calls. If you were looking for a streamlined service, this may not be it.

  • You have parent loans: LendKey doesn't allow you to refinance your parent loans with your standard student loans. If you have parent loans, you may want to look at other institutions that allow the inclusion of these loans.

The Application Process

LendKey's application process is like that of any other bank offering student loan refinancing options. If you just want to check the available rates in your area, you'll only need limited information, including:

  • Name
  • Address
  • Annual income
  • School and degree type
  • Loan amount and loan type

It should only take a few minutes to complete the initial application. You'll receive offers within a few minutes of submitting your application. You can then review the offers, do your research, and choose the loan that fits your needs.

Once you choose a lender to complete the application process with, you'll need to provide more information about yourself. This is all done through the LendKey interface, though. The lender will respond with a conditional offer, which lets you know what information/proof they will need to approve your loan.

Contacting LendKey: LendKey offers phone support between the hours of 9 AM to 8 PM Eastern Standard Time, Monday - Friday, by calling 1-888-549-9050.

They also offer limited help online via their knowledgebase and existing blog.

How It Compares

SoFi:
Alumni and individual investors provide the funds for borrowers at SoFi. They offer loan programs similar to those from LendKey, but may have slightly lower interest rates.

 

LendKey Student Loans

SoFi Student Loans

 

Benefits and Features

Variable APR
2.56%-7.74%
2.480% to 7.524% APR (with AutoPay).
2.730% to 7.774% APR (without AutoPay).
Fixed APR
3.15%-8.12%
3.999% to 7.804% APR (with AutoPay).
4.249% to 8.054% APR (without AutoPay).
Minimum Amount
$7,500
$5,000
Maximum Amount
$300,000
No maximum
Loan Term
5 to 20 years
5 to 20 years
State ResidencyMost states except: ME, ND, NV, RI, and WV
All states eligible
Degree Requirements
Bachelor's or higher
Associates or higher
Income Requirements
$24,000
None
Employment Requirements
Must be employed
Must be employed or have an offer to start within 90 days
Interest Only Payments
Yes for the first 4 years
No
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
Yes
Can release a cosigner
Yes
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
 Terms Apply. SoFi Disclaimers

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

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

Earnest:
Rather than your credit score and current income, Earnest looks at your savings pattern, number of investments, and job history to determine your ability to consolidate your student loans. Earnest offers loans as low as $5,000, which is less than most lenders in the LendKey network offer.

 

LendKey Student Loans

Earnest Student Loans

 

Benefits and Features

Variable APR
2.56%-7.74%
2.57%-5.87%
Fixed APR
3.15%-8.12%
3.25%-6.32%
Minimum Amount
$7,500
$5,000
Maximum Amount
$300,000
No maximum
Loan Term
5 to 20 years
5 to 20 years
State ResidencyMost states except: ME, ND, NV, RI, and WVMost 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
$24,000
None
Employment Requirements
Must be employed
Must be employed or have an offer for a position to start within 6 months
Interest Only Payments
Yes for the first 4 years
No
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
No
Can release a cosigner
Yes
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

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

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

CommonBond:
With their streamlined application process, CommonBond is a plausible choice for your loan consolidations. They offer an elaborate program for borrowers who experience hardship after taking a loan, as well as many financial education programs.

 

LendKey Student Loans

CommonBond Student Loans

 

Benefits and Features

Variable APR
2.56%-7.74%
2.6%-7.1%
Fixed APR
3.15%-8.12%
3.18%-7.25%
Minimum Amount
$7,500
$5,000
Maximum Amount
$300,000
Up to $500,000
Loan Term
5 to 20 years
5 to 20 years; Hybrid loans are 5 years of fixed payments and 5 years of variable payments
State ResidencyMost states except: ME, ND, NV, RI, and WV
All states eligible
Degree Requirements
Bachelor's or higher
Associates or higher
Income Requirements
$24,000
None
Employment Requirements
Must be employed
Must be employed or have an offer
Interest Only Payments
Yes for the first 4 years
No
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
Yes
Can release a cosigner
Yes
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

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

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

Bottom Line

© CreditDonkey

LendKey can be a great way to save money and organize your finances. As is the case with any debt consolidation, weigh the pros and cons before moving forward.

Determine the full amount of your savings, not only per month, but over the life of the loan. How much interest will you pay when it's all said and done? Compare that number to the total interest you would pay on your current loans combined. Don't fall for the no origination fee and promise to save you thousands without crunching the numbers to see how it will help you.

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial 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.

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