The Federal Reserve interest rate cut may give some much needed relief to the crushing student loan debt held by millions of Americans. However, federal student loan interest rates still range from 4.53% to 7.08%, making them unaffordable for many. There is presently over $1.3 trillion of outstanding student loan debt spread out over 44 million U.S. borrowers, and over 7 million of those borrowers are in default. When you also consider that certain estimates put the average student loan debt per borrower at $38,390, but the median household income according to the 2015 U.S. Census is only $56,516; the problem becomes clear. So how does someone that is crippled by student loan debt make headway without defaulting and putting her future in jeopardy?
The innovative San Francisco, CA based First Republic Bank is providing borrowers an affordable option to significantly lower the cost of their student loan debt. First Republic offers a student loan refinance program with interest rates as low as 1.95% APR, for loan amounts from $25,000 to $300,000. A borrower currently paying a federal student loan rate of 7.08% on $100,000 of debt, who can refinance into a 1.95% APR rate with First Republic, will save almost $14,000 of interest over the life of his loan (assuming a 5 year amortized loan). First Republic has gone a step further and will rebate up to 2% of your original loan balance back to you, if you pay your balance in full within 4 years.
First Republic Bank has also incorporated cutting-edge technology into its lending process, making applying quick and painless. All required documents for First Republic’s refinance loan can be uploaded into its secure application portal and underwriting and loan closing (if you’re eligible for financing) is usually completed within 5 to 10 business days.
Although a quarter point interest rate drop is good news for many, it won’t completely offset the rising cost of federal student loans which have increased as much as 0.77% since 2016. One can only hope that other lenders will follow First Republic’s example to offer affordable financing options to help alleviate the student debt crisis.
Interested in checking your First Republic student loan refinance rate? You can do so here without affecting your credit.