The world of banking services is changing, which is why Darien Rowayton Bank (DRB) made the recent decision to branch off and create Laurel Road in 2017. The Laurel Road branch of the DRB caters solely to student loan refinancing, perhaps in response to the increased recent demand for refinancing services.
Reflecting the online trend in the financial services sector, Laurel Road operates the majority of its business online. Through its online portal, it can offer refinancing (and some other services) to all 50 states as well as Washington DC and Puerto Rico. Regarding their student loan services, Laurel Road only offers refinancing options. The DRB, operating out of Connecticut, continues to manage any new student loans.
Laurel Road Refinancing Eligibility
Laurel Road will only offer refinancing services to U.S. citizens or residents with a valid green card. As a private company, they cover both private and federal loans. Generally speaking, the final decision for refinancing approval is also based on a good credit score and responsible financial history. They mostly offer their services to working professionals who have already graduated, which is why they can offer lower interest rates. Working professionals have a lower risk of default than other borrowers.
They will only offer services to loans over 5,000 dollars, and unlike some other private financial institutions, they do not set a maximum limit. Some of the other program-specific eligibility requirements are outlined below.
Even if the borrower has already refinanced, it may be beneficial to explore the options provided by Laurel Road. Previously refinanced loans may qualify for a second round, perhaps with lower rates or better conditions. According to the Laurel Road website, on average, their refinancing services save customers 20,000 dollars over the life of the student loan. This potential for savings is a good enough reason to explore what benefits they could offer.
Benefits of Laurel Road Refinancing Services
One benefit offered by Laurel Road happens when borrowers set up automatic payments. Automatic payments save 0.25 percent off the interest rate which could add up to significant savings over the lifespan of the loan.
Another benefit they offer is setting a maximum rate for variable loans, which currently stands at nine percent. While the initial rate will likely be set much lower (in the beginning), the variable rate will never rise above this maximum set rate.
They also offer relief for graduates experiencing economic hardship. This program will defer loan repayment for up to one year, at the bank's discretion. Finally, Laurel Road never charges origination fees or prepayment penalties on any of its products.
Basic Student Loan Refinancing
Like many of their products, Laurel Road's most basic student loan refinancing option is easy to apply for online. Laurel Road offers repayment terms of their primary service from five to 20 years, and interest rates increase with longer repayment terms.
Like most institutions, they offer both fixed and variable rate loans. Their current variable rates start at just 2.99 percent for a five-year term and increase up to 6.42 percent for a 20-year term. For those looking for a fixed rate loan, the current rates start at 3.95 percent for a five-year term and increase up to 6.99 percent for the 20-year option. As always, interest rates are calculated by a number of factors, including credit score and financial history.
Resident and Fellow Refinancing
One of the major areas of focus for Laurel Road is refinancing the loans of medical professionals. If a borrower refinances their student loans before or during their medical residency, Laurel Road offers a 100 dollar monthly payment cap during the entirety of the residency. This cap can be extended for six months afterward. Repayment terms on this program range from seven to 20 years.
Parent Loan Refinancing
Not just for students, Laurel Road will refinance Parent PLUS loans as well. The Parent PLUS refinancing option means that once the student graduates, the parent who took out the initial debt can refinance. Alternatively, they can also refinance and pass the debt over to their professionally employed child.
In-School MBA Loans
One final specialty program offered by Laurel Road is for students attending an MBA program at a select number of prestigious universities. The full list can be reviewed online; however, some examples include Duke, Harvard, and MIT. Repayment terms for these loans range between ten to 20 years. Interest rates are significantly higher. For example, the lowest possible rate available today is a variable rate of 5.35 percent.