With so many lenders offering student loans, it can be a daunting prospect to try and choose the best one for your particular needs. The best way to narrow down your choices is to read reviews like this one in which one specific lender’s programs are discussed in detail – and you can see the good, the bad, and the ugly. Today we’ll look at Citizens Bank, a popular student loan lender that offers a number of options for student borrowers.
What Kind of Student Loans Can I Get?
Citizens Bank offers up to $90,000 in loan money for an undergraduate degree, $110,000 for a graduate degree, $180,000 for those pursuing a business or law degree, and healthcare professionals such as nurses or doctors can get up to $295,000.
The bank offers you a choice of when you start paying back your loans as well as a choice between repayment terms. A 5-year term has the lowest interest rate and also means you’ll be making much larger payments than with a different term loan. A 10-year term is more moderate in its repayment amount, but also comes with a slightly higher interest rate. The 15-year term has the highest interest rate, highest total cost, and lowest monthly payments.
The rates themselves can be as low as 4.18 percent and up to 10.98 percent. Depending on rates and individual loan terms, payments could be as low as $75 per month on a $10,000 loan if you choose to start paying it back while you’re still in school.
Unlike some lenders, Citizens Bank also allows you to make additional payments without a penalty which means you can pay your loans off even faster. You can also start paying your loans back before graduation by making either regular payments or just paying the interest – which does keep accruing if you defer until after graduation. Depending on how you set up repayment, you might also be eligible for up to a .50 percent discount on your interest rate.
All funds are disbursed directly to the school you’re attending and can be used for any educational expenses including room and board, books, fees, and tuition.
Who Can Get a Private Student Loan from Citizens Bank?
Citizens Bank is a private lender which means their loans are based more on the creditworthiness of the applicant than their financial need or even academic performance. In most cases, that means getting a cosigner – usually a parent or grandparent – to increase the chances of approval. According to Citizens Bank’s website, having a cosigner might also mean a lower interest rate on your loan, and after you’ve made 36 consecutive on-time payments, you can also apply to have the cosigner removed.
Additional criteria for student applicants include:
- Must be a U.S. citizen or permanent legal resident
- Must be enrolled at least half-time in a degree program at an eligible institution
- Must have good credit or a qualified cosigner
- Must be a legal adult or have a qualified cosigner
While international students can apply for student loans with Citizens Bank, they must have a cosigner who is a U.S. citizen or permanent resident.
Student Loan Refinancing with Citizens Bank
If you already have student loans and wish to refinance them with Citizens, there are some additional requirements to meet. The minimum credit score to qualify for a refinance loan from Citizens is 660 with an annual income of $24,000. However, their average applicant has a credit score as high as 785 with about $70,000 in annual income. In addition, you’ll need to show proof that you’ve made at least three on-time payments on the loan you’d like to refinance. This means if you’ve waited until you’re in default to start looking at refinance options, Citizens Bank won’t be a viable option.
The good news is that you may still qualify even if you didn’t graduate because Citizens does approve refinance loans for those borrowers. There’s an incentive of .25 percent off the interest rate if you have another account with them, such as a checking or savings account. Interest rates on a Citizens refinance loan range from 2.78 to 8.24 percent.
One small fringe benefit of Citizens Bank is that you can actually walk into any of their branches and talk to someone face to face about your student loan. If you’re used to long hold times and faceless, seemingly uncaring customer service, being able to sit across a desk and talk to someone might be the tipping point for you.
What’s the Downside to Citizens Bank?
Citizens only recently started offering student loans in 2013; as a result, they aren’t as large as some other lenders. You might not see as many perks or extra benefits. However, they do offer a wide enough product line that it may not be an issue.
One possibly sour note is that Citizens likes to see student borrowers consolidate their federal loans with them. Borrowers would do well to understand that if you consolidate a federal loan into a private refinance loan such as with Citizens, you forfeit any eligibility to federal income-driven repayment plans, effectively cutting off some of your options if you find yourself in a financial hardship. In that case you’d be limited to whatever programs and options Citizens Bank offers – and none of them are income-based like the federal programs.
They do offer unemployment protection. So if you lose your job you can have your payment obligation stopped until you are re-employed again. In addition, the in-person branches mean you can go sit down and talk to someone about repayment options if something happens.
Citizens Bank may not be the largest student loan provider in the country, but their depth and breadth of products make them worth checking out before deciding on a lender.