College is one of the most important investments that young adults make in their entire lives. However, for many people around the country, the cost of higher education is too high for them to even consider unless they apply for some form of financial support.
This phenomenon means that there is an increasingly higher number of students graduating with some form of debt. Many of these students are expected to start making payments soon after they get off the stage, regardless of whether they find gainful employment before their monthly loan payments are due.
As you can imagine, many of these payments become difficult to make. However, there are a few companies out there that are making it easier for students to pay back their loans. One of these companies is College Ave Student Loans. This organization was founded in 2015 by a group of former executives from Sallie Mae, and its main purpose was to create a better loan process for their customers. One of their goals is to help students save money on their loans by refinancing existing loans.
When I was applying for private student loans to bridge the gap between my cost of attendance and federal financial aid, College Ave wasn't around, or else I would have definitely considered them. They have a much better reputation than other lenders, such as Sallie Mae, and give borrowers a more personal experience.
Aside from private student loans, College Ave also offers student loan refinancing. Though I have already refinanced my loans, I will definitely be considering College Ave to refi them again if I am offered a better rate. It might not be much lower, but hey, every bit counts!
Though I haven't personally used College Ave, as mentioned, I have talked to a few of my younger friends who are still in college and have taken out a College Ave private student loan. In addition, I know some people who have already refinanced with College Ave. This review was created based on my own personal conversations as well as reviews I have found online. Enjoy!
College Ave’s Private Student Loans
College Ave Student Loans offers private student loans to a wide variety of people, including undergraduate students, graduate students and parents of students that are about to go to college. The company has a wide range of options available to its customers. In comparison to other companies, College Ave Student Loans offers a very wide range of loans, which allows customers to create customized loans that fit into their lifestyle.
Rates & Terms
College Ave Student Loans offers some of the best terms and rates you will find from a loan financier right now. All their loans are provided by their lender, the First Trust Savings Bank, and they can stretch to cover the entirety of your cost of attendance. There are two different types of terms that are offered by College Ave Student Loans, Fixed terms and Variable terms. Each of these terms has different rates that are available to you depending on the number of years that you choose to repay the loan.
For instance, there are four separate fixed terms that you can choose from, each with different interest rates. The shortest fixed term that you can choose is eight years, which has a rate of between 4.93% and 11.68%. Next you have the 10 year option that comes with the same interest rate as the previous option. Next is the 12 year option that has an interest rate of 6.15% - 12.14%, and finally the 15 year option that carries the same interest rate. Variable terms also come with terms of 8, 10, 12 and 15 years, however, their interest rates are much lower, and begin at 2.31% for the 8 and 10 year option, with a maximum of 9.56%. The 12 and 15 year options come with interest rates that can be as low as 3.53%, and have a maximum of 10.02%.
It is important to note that variable rates change according to the one-month London Interbank Offered Rate or LIBOR. These rates are usually published by The Wall Street Journal’s website at the beginning of every month, and are rounded off to the nearest 1/8th of a percent. Therefore, variable rates rise and fall depending on how much the LIBOR rate changes. However, the rate will never change more than once a month, and will never go higher than 25%.
The organization also offers a 2 year interest only option, giving borrowers to pay back the interest on their loans within the first two years before they begin making payments on their principle amounts.
Qualifying for a College Ave Student loan is simpler than most people would believe. The minimum credit score required is in the mid 600s, though many of the people who qualify for loans have a credit score in the mid 700s. Additionally, you will need to have an income of at least $35,000, especially if you do not have a creditworthy cosigner. However, most people who qualify without a cosigner have an annual income of about $80,000.
Benefits of College Ave Student Loans
There are quite a few benefits of applying for a College Ave Student Loans private loan. For instance, their loan terms are very easy to customize. The College Ave website has one of the best tools you will find to help you decide what term length, interest rate and repayment plan is best for you. There are also sliding bars that you can use to see how changes in each variable will affect your monthly payments.
They also give you payment periods that are tailored to your lifestyle. This allows you to pay your loan in as much as 15 years. However, if you would like to make some savings, you could choose to make higher monthly payments and repay your loan in a shorter time by choosing the 8 or 12 year option. For those parents that choose to take out a loan on behalf of their children, they can choose to repay the loans in five or 12 years, or any amount of years in between. They are also eligible for fixed or variable loans, with all fixed loans being set at 6.54% annually, while their variable loans range at 4.03% to 6.03%.
Downsides of College Ave Student Loans
Despite all the benefits of getting a student loan with College Ave, there are a few downsides that you should consider before applying for one. For instance, as mentioned earlier, College Ave does not service its own loans, but rather gets a third party to do so. This means that you will not be making payments directly to the organization.
Additionally, there are fewer protections in place for those who borrow from College Ave Student Loans in comparison to those who are awarded a federal loan. For instance, College Ave does not have specific forgiveness programs for those who are finding it hard to make their payments. However, with federal loans, you can apply for an income-driven repayment plan that only requires you to make payments that are a percentage of your paycheck. This means that borrowers do not have to worry about payments if you find yourself jobless during your repayment period.
Applying for a College Ave Student Loan
The application process for College Ave loans is very simple, and provides borrowers with instant credit decisions. However, you must be eligible to apply for a loan. Eligibility for a College Ave loan, you must be:
· 18 years or older
· A US Citizen or permanent resident
· You must have graduated from a title IV eligible undergraduate or graduate program
Alternatives to College Ave's Private Student Loans
Before you approach companies like College Ave Student Loans for a private student loan, you should always try and exhaust all of your federal options. If you qualify for a scholarship or grant, you should also consider using those first before you apply for a private loan.
This is because of all the benefits that come with federal loans, including subsidized interest and income based repayment plans. Additionally, federal loans are awarded according to the needs of the student, meaning that students who have a greater need for the loans are given preference, and can receive larger amounts of financial aid.
College Ave’s Student Loan Refinancing
College Ave’s student loans refinancing programs have not been around for very long, however, it does give some of the best repayment terms to students with existing debts. The application process is one of the quickest in the industry, and the refinancing services they offer are available to those with $5,000 or more in debt.
Rates & Terms
When it comes to refinancing, one of the best organizations you can approach is College Ave, as they have some of the most flexible rates and terms you will find. Refinancing is usually most useful to those who have taken a few years to build up their credit scores and can now qualify for lower interest rates than the ones they initially qualified for. Just like with student loans, you can apply for refinancing with a co-signer who has a high credit rating. However, you must keep in mind that the co-signer shall be responsible for the loan if you cannot repay it.
There are two main types of refinancing terms you can choose, fixed rate and variable rate terms. As with the student loans, there are a couple of different repayment terms within these rate options, and you have the freedom to choose any length between 5 and 15 years. However it is important to note that your interest rate will change depending on the rate you choose, and can be anything from as low as 4.74% to as high as 8.5% per year with the fixed rate term. Variable rates can begin as low as 2.5%, and rise to a maximum of 7.25% per year.
The different rates and terms are highly customizable, and you there is even an option that allows you to pay off your interest only for the first two years. This gives you the chance to focus on other expenses first, such as credit card bills. However, if you can manage to make the full payments from the beginning, you will be able to save more money in the long term.
Qualifying for refinancing is quite easy. Much like with student loans, applicants who are interested in refinancing need to have a minimum credit score in the high 600s. However, most borrowers have credit scores that are in the mid 700s and above. Additionally, the minimum annual income required is typically double your load. Therefore, if you would like to borrow $15,000, your annual income should be a minimum of $30,000. However, most people who have their loans refinanced by College Ave have an annual income of about $100,000.
Benefits of College Ave Refinancing
There are many reasons why you should consider having your loan refinanced by College Ave. For instance, the application process is relatively easy in comparison to many other refinancing firms. One reason is because unlike many refinance lenders, College Ave does not require a payoff statement from your loan servicer to find out how much is left of your original loan. Instead, they pull all that information from your credit report, meaning you do not need to find all the paperwork needed yourself, saving you time.
The loan repayment terms are also very flexible, and allow you to pick how long you should take to repay the loan. This is in stark contrast to many lenders that supply you with fixed terms of 5, 10, 15 and 20 years. This strategy helps lenders in various ways. For instance, if you have been paying off your loan for 3 years, and get refinancing for 5 years through a standard lender, then your monthly payments may be too high. However, if you get a 10 year term, your monthly payments may be lower but it will extend the period you have to pay back the loan. College Ave allows you to set your repayment period to 7 years, which allows you to have lower monthly payments, while still keeping you within the standard 10 year repayment period.
It is important to note that just as with other lenders, College Ave allows you to repay more than the required monthly payments, which allows you to pay off your loan in a shorter period of time.
Downsides to College Ave Refinancing
Despite all the benefits of choosing College Ave for refinancing, there is one downside. The interest rates that they offer can be quite high. For instance, companies such as Credible offer interest rates starting from 3.5%, while the minimum interest for College Ave refinancing begins at 4.74%.
Applying for College Ave Refinancing
As mentioned earlier, applying for College Ave refinancing is very simple. To be eligible for College Ave refinancing, you must be:
· Over 18 years old
· A citizen or permanent resident of the US
· A graduate of a title IV graduate or undergraduate program
Alternatives to College Ave Refinancing
There are a number of private companies that you can approach for refinancing other than College Ave. Many of these seem to offer best rates on the surface, but you must do your research before picking one. Some of the most common companies include:
· Citizens Bank
Many of the loans offered by these institutions have a minimum interest rate of about 3.5%, and a maximum of 8%. However, interest rates can rise to as high as 9.12%, making due diligence important.
One of the best things about College Ave loans is that their rates are solid, and their repayment rates are short, meaning you can get rid of your debt sooner. The repayment options are also more flexible than most other companies you will find. They are consistently in the top 10 groups of private student loan companies. This is definitely a company that is worth investigating if you would like to find reasonable loan and refinancing options.