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.

IN THIS POST

Citizens Bank student loan refinancing review

Citizens Bank private student loan review

Citizens Bank student loan refinancing review

Like many student loan refinance lenders, Citizens Bank refinances undergraduate and graduate student debt, and college loans that parents took out on behalf of their children.


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refinancing at a glance

  • Fixed: 3.74% to 8.24% APR. Variable: 2.78% to 8.03% APR.
  • Available loan terms: 5, 10, 15 or 20 years
  • Eligible loan balances: $10,000 to $300,000

Borrowers with a bachelor’s degree or lower can refinance up to $90,000, borrowers with graduate and doctoral degrees can refinance up to $225,000, and borrowers with professional degrees such as dental, medical and law can refinance up to $300,000.

Note: Once a borrower refinances a federal student loan, they lose access to federal loan perks including income-driven repayment and loan forgiveness programs. They should weigh this trade-off carefully.

» COMPARE: Student loan refinancing options

Do you qualify?

 Minimum qualificationsThe typical borrower
Credit score660785
Annual income$24,000$70,000
EducationNo requirementN/A

In addition to the qualifications above, borrowers with at least a bachelor’s degree must have made at least three full on-time payments on the loan they want to refinance and may need to show proof of graduation. Borrowers who don’t have at least a bachelor’s degree must make 12 full on-time payments before they’re eligible to refinance.

Loans on federal income-driven repayment plans aren’t eligible to be refinanced.

Where Citizens Bank refinancing shines

Borrowers who didn’t graduate can refinance: Unlike with many refinance lenders, borrowers don’t need a bachelor’s degree to qualify. However, borrowers who are still enrolled in school aren’t eligible. These parameters make Citizens Bank an option for those who have left school and have debt from a degree they didn’t complete.

Co-signer release available: Borrowers can apply to remove their co-signer from the loan after they make 36 consecutive on-time payments of principal and interest. The borrower must independently meet Citizens Bank’s underwriting criteria to qualify.

Loyalty discount: Borrowers get 0.25 percentage point off their interest rate if they or their co-signer have an existing account with Citizens Bank.

Where Citizens Bank refinancing falls short

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, and Earnest lets borrowers choose their loan terms and monthly payment amounts. If you’re looking for a lender with a long-standing reputation, though, Citizens Bank could be a good choice.

More details

Fees: No prepayment penalty

Loan servicing: Firstmark Services

Deferment and forbearance: Up to 12 months

Bonus offer: Until Oct. 15, 2017, borrowers can get a 1% reduction of their principal loan balance (up to $500) when they refinance with Citizens Bank.

Next steps

It’s a good idea to compare multiple refinance lenders before choosing one. If you’re ready to refinance with Citizens Bank, you can apply on the lender’s website. You’ll need the following when you apply:

  • Driver’s license or state ID number
  • Recent pay stub or other proof of income
  • Billing statements from the loans you want to refinance

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Citizens Bank private student loans review

In addition to refinance loans, Citizens Bank offers student loans for borrowers pursuing undergraduate or graduate degrees, and parents who want to help their children pay for college.

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. 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.


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student loans at a glance

  • Fixed: 5.09% to 11.80% APR. Variable: 3.13% to 10.68% APR.
  • Available loan terms: 5, 10 or 15 years
  • Borrowing limits: Up to $295,000, depending on the degree you’re pursuing

 

Do you qualify?

 Minimum qualificationsThe typical borrower or co-signer
Credit score
620771
Annual income$12,000$70,000

Borrowers with little or no credit history, or those with poor credit, may need to apply with a co-signer to qualify. A co-signer is someone who agrees to take responsibility for the loan payments if you don’t make them.

» COMPARE: Private student loans

Repayment options

Like many student loan lenders, Citizens offers three repayment options:

  • Immediate: Borrowers make payments while they’re in school. You’ll save the most money on interest with this option.
  • Interest-only: Borrowers pay just the interest that accrues while they’re in school. Full payments begin six months after the borrower leaves school or drops below half-time enrollment.
  • Deferred: Borrowers postpone payments while they’re in school and begin repaying the loan six months after they leave school or drop below half-time enrollment. Interest will continue to accrue while the borrower is in school, which means this option will cost the borrower the most money in interest.

Where Citizens Bank student loans shine

Multi-year approval: Citizens Bank allows borrowers to apply for multiple years’ worth of student loans at once. With other lenders, you have to apply every year.

Co-signer release available: Borrowers can apply to remove their co-signer from the loan after they make 36 consecutive on-time payments of principal and interest. The borrower must independently meet Citizens Bank’s underwriting criteria to qualify.

Loyalty discount: Borrowers get 0.25 percentage point off their interest rate if they or their co-signer has an existing account with Citizens Bank.

Where Citizens Bank student loans fall short

Fewer protections than federal student loans: Like all private student loans, Citizens Bank doesn’t offer as many repayment benefits as federal student loans. For instance, 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.

Loan details

Fees: No application, origination or disbursement fees, or prepayment penalties

Loan servicing: Firstmark Services

Grace period: Six months

Deferment and forbearance: Up to 12 months

Next steps

It’s a good idea to compare multiple student loan lenders to ensure you’re getting the lowest possible rate. If you’re ready to borrow from Citizens Bank, you can apply on the lender’s website. You’ll need the following documents when you apply:

  • Recent pay stub or other proof of income
  • Financial aid award letter from your school

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Brianna McGurran and Teddy Nykiel are staff writers at NerdWallet, a personal finance website. Email: bmcgurran@nerdwallet.com. Twitter: @briannamcscribe. Email: teddy@nerdwallet.com. Twitter: @teddynykiel.