Citizens Bank Review: Refinancing and Borrowing Student Loans

Loans, Student Loans

Citizens Bank, a traditional bank based in Providence, Rhode Island, offers student loan products that are competitive with those from the nonbank startups of the world.

Former students can refinance loans through Citizens Bank, and undergrads, grad students and parents can take out private student loans. Below, we review both of these options.

Jump to Citizens Bank private student loan review

Citizens Bank student loan refinancing review

In many ways, Citizens Bank offers a standard student loan refinancing product, which allows you to bundle your individual student loans into a new one with a potentially lower interest rate. You must have strong credit or a co-signer to qualify; you can choose a loan term of five, 10, 15 or 20 years; and if you have a financial hardship, you can postpone payments for a total of 12 months.

But a few features of Citizens Bank’s Education Refinance Loan stand out. Unlike many student loan refinancing lenders, Citizens doesn’t require you to have graduated in order to refinance through the bank. Instead, you must have made on-time payments toward your student loans for at least 12 months before you apply.


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refinancing at a glance

  • Fixed: 3.74% to 8.24% APR. Variable: 2.60% to 8.39% APR.
  • Receive an interest rate discount of 0.5% if you have a Citizens Bank account and make your loan payments by auto debit.
  • Must owe at least $10,000 in student loans to be eligible; maximum loan amount depends on education level.

If you or your co-signer has an account with the bank when you apply — it has branches in 11 states in the Northeast and Midwest, though its student loans are available nationwide — you can lower your interest rate by 0.25%. You don’t need to pay off your loans from a Citizens Bank account to be eligible for the discount. Combined with the usual 0.25% discount for choosing to make payments by auto debit, that’s a solid markdown.

Use a student loan refinance calculator to see how much you could save with a new, lower interest rate, including these discounts.

» COMPARE: Student loan refinancing options

Do you qualify?

 Minimum qualificationsThe typical borrower
Credit score660781
Annual income$24,000$70,000
Debt-to-income ratioThe higher your credit score, the higher debt-to-income ratio Citizens Bank will accept.The higher your credit score, the higher debt-to-income ratio Citizens Bank will accept.

Where Citizens Bank refinancing shines

Former students who didn’t graduate can refinance: Citizens Bank is one of the few refinancing options for students who didn’t finish school. It allows borrowers who didn’t graduate to refinance as long as they have a history of making loan payments on time. That means they’ve paid their student loan bill by the due date 12 times before applying to refinance.

Co-signer release program: Citizens Bank allows you to release a co-signer from your Education Refinance Loan after you’ve made 36 consecutive, on-time payments. That ensures only you are responsible for the loan long term. The timeline, however, is longer than the 24-month co-signer release option available through U-fi.

Where Citizens Bank refinancing falls short

Interest rates: Citizens Bank’s interest rates aren’t among the most competitive in the industry. As with other lenders, its variable rates are low at the moment, but they increase if the Federal Reserve raises rates across the board.

Fixed interest rates are generally a safer choice. It’s best for borrowers to choose that option so the amount they pay won’t change over time.

Range of features: Citizens Bank has been in business in its Providence, Rhode Island, headquarters since 1828, but some borrowers may want the bells and whistles newer competitors boast. For instance, CommonBond donates money to an education nonprofit when it closes a new loan; Earnest lets borrowers choose their loan terms and monthly payment amounts. If you’re looking for a long-held reputation in a lender, though, Citizens Bank could be a good choice.

Next steps

You can apply for an Education Refinance Loan on Citizens Bank’s website or compare rates across refinance lenders to find the lowest rate you qualify for.

Citizens Bank private student loans review

Before you turn to a private student loan, fill out the Free Application for Federal Student Aid, known as the FAFSA, to qualify for federal funding for college. Only turn to private loans if you won’t be able to cover your costs otherwise.

Private student loan lenders don’t offer the same benefits the federal government does, such as the option to repay your student loans on an income-driven repayment plan after you graduate. Private student loans are also credit-based, which means you’ll most likely need a co-signer to qualify.

Nearly all of Citizens Bank’s undergraduate borrowers use a co-signer, according to Brendan Coughlin, president of consumer lending at Citizens Bank. About 80% of graduate student borrowers use one. Here’s what you need to know about the bank’s private student loan options.


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student loans at a glance

  • Fixed: 3.74% to 11.75% APR. Variable: 2.99% to 9.99% APR.
  • Receive an interest rate discount of 0.5% if you have a Citizens Bank account and make your loan payments by auto debit.
  • 12 months of interest-only payments available after your six-month grace period ends.

Repayment options

Citizens Bank offers 5-, 10- and 15-year repayment terms. Shorter repayment timelines come with lower interest rates. You can choose from three approaches to repaying your loans:

  • Immediate repayment requires you to make a full monthly payment — including both principal and interest — as soon as you get your loan money, while you’re still in school. It’s your lowest-cost option, both per month and overall.
  • Interest-only repayment allows you to pay off the interest as it accrues while you’re in school. It’s less costly than immediate repayment in the short term, but it still helps you cut down the amount you pay over time.
  • Deferred repayment requires no payments while you’re in school or for six months after you’ve graduated. But this option comes with a higher interest rate range, and higher costs overall, than the others.

» COMPARE: Private student loans

Do you qualify?

 Minimum qualificationsThe typical borrower or co-signer
Credit score
620770
Annual income$12,000$65,000 to $70,000 for entire household

Where Citizens Bank student loans shine

Interest-only period for 12 months: In November, Citizens Bank announced new programs for struggling student loan and Education Refinance Loan borrowers. Among them is the option to take a break from full payments for a year following your six-month post-graduation grace period if you choose the deferred repayment option for your student loan.

This gives borrowers relief if they haven’t found a job directly after graduation, or if their pay is lower than expected. While it’s not as generous as the federal government’s income-driven repayment plans, it’s a helpful backup.

Lower parent loan interest rate guaranteed: Citizens’ Student Loan for Parents, introduced last year, comes with a five- or 10-year repayment term, a fixed interest rate and no origination fees. The Citizens Bank loan is guaranteed to have a lower interest rate than the federal parent PLUS loan; as the federal rate decreases, so will Citizens’ rate, Coughlin says.

You can consolidate a parent PLUS loan to receive some federal repayment benefits, including income-contingent repayment. But if you don’t plan to take advantage of those benefits, a private student loan could save you money, as long as your parent meets the credit requirements.

Where Citizens Bank student loans fall short

Interest rates: While Citizens Bank’s variable rates are lower than federal student loan interest rates right now, they could go up in the future — and your co-signer will have to have strong credit in order to get the lowest rate offered. At NerdWallet, we recommend opting for fixed rates so you’re protected against changes in the market.

Fewer protections than federal student loans: Federal student loans have more repayment options and benefits than Citizens Bank offers. Subsidized federal loans don’t accrue interest when you’re in school or during your grace period, and you can get federal student loan forgiveness if you work in a public service career.

Next steps

You can apply for a private student loan on Citizens Bank’s website, but consider comparing its rates with other private student loan lenders’ so you get the best deal your credit will allow.

Brianna McGurran is a staff writer at NerdWallet. Email: bmcgurran@nerdwallet.com. Twitter: @briannamcscribe