LendKey Home improvement and Student Loans
Do you have a student loan? If you do, have you thought about refinancing it? If you have, it’s time you start shopping around for the best way to do it. There are numerous lenders waiting to present you with offers.
However, before choosing any lender, you need to scrutinize their rates and APRs to get the best deal and save you money in the long run. Nevertheless, you can put your worries aside and save yourself the headache of going through each lender manually.
This is where LendKey comes in. if you’ve never heard of them, then this article will offer an in-depth review of this platform.
What Is LendKey?
Contrary to popular belief, LendKey is a broker and not a lender. This company brings on board multiple financial institutions and connects them with borrowers seeking student and home improvement loans.
LendKey prefers smaller lenders because they believe that they will provide better services compared to big lenders such as Chase, Bank of America and Wells Fargo. These small lenders include credit non-profit credit unions.
How Does LendKey Work?
LendKey is pretty much like LendingTree. This company employs the use of data analytics engines to scrutinize data dug from at least 275 financial institutions, all community-based. Afterward, the data is compared and contrasted to present a final report in descending order to various consumers.
This means no matter your status, you can access this data to make an informed decision when it comes to loans. It works more or less like a financial expert. In addition, borrowers have a chance of saving $191 on monthly payments with this platform.
As the company says in its own words, their main objective is to “match consumers with community banks and credit unions to create the most transparent, accessible and low-cost borrowing options in online lending.” In fact, when it comes to online customer service and satisfaction, they rate a fantastic 4.5 out of 5.
Who Can Apply at LendKey?
If you are a student or an aspiring one, you can apply at LendKey either for refinancing or a loan to help you get into college. For the former, you need to have a degree. LendKey can also help you access the best loan deals when it comes to home improvements. We’ll take a look at more in student refinancing later on.
LendKey Qualification Requirements
For you to apply at LendKey, you’ll need to have a credit score of no less than 600 and at least $24,000 in annual income. These requirements aren’t stated anywhere on the website, but this information has been collected from customers who have previously worked with LendKey.
On average, most of the borrowers make about $70,000 per year and credit score of about 728. Again, these standards don’t mean that you won’t get a match.
What Does LendKey Offer?
There are a number of loans available at LendKey. The most common is student loan refinancing.
Student Loan Refinancing
LendKey offers borrowers a wide range of refinancing plans depending on the type of loan you take out. The loans range from:
- $5,000 to $125,000 for undergraduate degrees
- $250,000 for graduate degrees
- $300,000 for veterinary, dental and medical degrees
The loan terms also vary depending on the loan with lowest starting at five years and the highest at 20 years. Interest rates start from 3.49% to 8.72% for fixed interest rates and 2.47% to 73.99% for variable rates. We’ll look at the difference between the two types of interest rates shortly.
However, with the rates, the shorter the repayment period, the higher you’ll pay in monthly payments. On the other hand, you’ll get low APRs which means the monthly payments will go into slashing the principal amount.
With long repayment periods, vice versa holds water. The APRs will be higher, but the monthly payments will be lower.
Variable rates are slightly lower than fixed APR rates. For more information regarding the rates, you can visit LendKey.
How to Apply for Student Loan Re-financing On LendKey
The process is very simple. First off, you need to set up a LendKey account. Once you’re done, you’ll receive various offers from credit unions and community banks. Apart from that, you’ll be required to provide supporting documents to prove the information provided during the loan application.
Such documents include a driver’s license, pay-stub and other relevant documents. These documents will only come in handy later on after you’ve settled on a loan of your choice.
Basic information will include:
- Your name
- A physical address
- Email address
- Phone number
- Total annual income
- Your choice of loan
- The amount you intend on taking out
- Your school details
After submitting the required information, LendKey will do a soft credit pull. Thereafter, you’ll get a number of lenders with various options. You can then filter the results depending on a number of factors like loan term and interest rates.
After you find your perfect match, you can proceed to the next step where a hard credit check will be performed. Keep in mind that too many hard checks within a short span will affect your score negatively.
You have a chance of lowering the interest rates by 0.25% if you choose automatic payments. This is highly recommended, especially if you have a reliable and stable income. You’ll save a lot of money.
The Difference Between Variable Interest Rates and Fixed Interest Rates
As the name suggests, fixed interest rates mean the rates will not change and you’ll repay the loan using a certain rate for loan duration. In contrast, variable rates mean the rates will vary from time to time depending on the lender.
The variable rates are quite risky because borrowers have no idea of any changes the lender will impose on their loans. Sometimes they may go low or higher than expected. Nevertheless, there are high chances you’ll save more money even though some periods will experience high rates.
Can Borrowers Access All Lenders?
No. Some borrowers will only access a certain group of lenders. That depends on a number of factors such as geographical location, your loan amount, your income, credit score and whether you are in the military.
However, you can be sure of at least 2 to 3 lenders at your disposal. This is regardless of your location and after you meet minimum qualifications on credit score and income level. LendKey works to ensure they match you with the best-suited lender.
How to Apply at LendKey
The application process is simple. LendKey will provide a form which you’ll need to fill out. Next, the information gathered is presented to the lenders in a bid to get the best match. Once you pick a loan, it will go through the bank and not via LendKey, but it will offer servicing and origination.
Don’t worry about your information falling into the wrong hands. LendKey will only present this information once you select a loan.
In most cases, once a borrower takes out a loan, they become customers with the banks. However, you can still manage the loan using LendKey. In addition, you can file any queries regarding the loan with LendKey or go straight to the bank issuing the loan.
Why Does LendKey Prefer Working with Credit Unions and Community Banks?
While big and more established financial institutions offer more in terms of loans, they fail to meet customer expectations on various aspects.
For example, customer service. Most the time, borrowers have to chat with a robot which doesn’t offer tangible leads or solutions.Smaller lenders understand the value of customer satisfaction and service delivery.
Also, don’t shy away from the small lenders because of the belief that they offer high interest rates. They can offer competitive rates and low monthly payments compared to big companies. Also, some of the lenders customize the repayment method to allow you to pay the interests first for about four years if you cannot pay for both the principal and the interest.
Does LendKey Offer Private Student Loan Refinancing?
Yes. You can refinance your private student loan, thanks to a number of credit unions and other small lenders. However, you need to keep in mind that refinancing means losing benefits like income-based repayment plans (IBR) and loan forgiveness if you have a federal loan. Therefore, you need to make careful considerations.
The Difference Between Refinancing and Consolidating
Many borrowers don’t know the differences between these two loan options.
Consolidating your loans means merging all your loans in one big loan. This doesn’t mean your loans are reduced in any way. The total amount due still remains the same including the interests. While that might not offer ant reprieve, paying a single installment for all loans will.
Refinancing, on the other hand, means merging all your loans while negotiating a new repayment period and new interest rates. You can also negotiate for new monthly payments, lower than the initial payments before negotiations.
Penalties for Early Payment
Larger financial institutions penalize customers for early loan repayments, but credit unions and community banks don’t, especially if they are LendKey partners. If you get a financial breakthrough, you are free to pay off your loan as soon as possible without the fear of penalties.
Does LendKey Allow Cosigning of Loans?
A cosigner is someone who agrees to pay off a borrower’s loan if they default. In most cases, they are family members and close friends with higher credit scores than the borrower. By doing this, the borrower has a greater chance of approval.
While this may be a good move for the borrower, the co-signer must be willing to endure hard credit checks which may cause a drop in their credit score. In addition, before adding any of your friends or family members as a co-signer, it’s important that you consult them.
This is because the cosigner will become liable for the loan should you fail to make any payment as scheduled by the lender. What’s more, their credit score will plunge in such a situation. With LendKey, once you make a series of consistent on-time payments (about 12 months) the cosigner will be off the hook.
Is LendKey a Good Choice?
LendKey offers a number of reasons why you should opt for this mode of loan shopping. Take a look at some of them:
- You support local businesses. By taking out loans on this platform, you support local businesses, since you’ll create employment by being a customer. As a result, your community grows stronger.
- You get competitive rates. Contrary to popular belief, small-scale lending companies offer quite low rates compared to the established ones.
- You get better customer service. When it comes to customer service, you can expect the best from LendKey. You will always have a real human attending to your needs instead of robots which are characteristic of big companies.
- Should you decide to include a co-signer, they can rest easy knowing that they will be let off the hook after only a year once you show consistent and on-time payments.
- When you get funds early to repay you’re your loan, you can clear it without any fear of penalties that accompany early payments in other financial institutions.
- LendKey doesn’t charge origination fees when refinancing your loan.
- Should you lose your job and the lender agrees, you can halt payments for up to 18 months. You don’t find such leniency in other companies. However, if you decide to take this route, make sure to make inquiries about interest rates first. For example, will they continue piling up?
If you are thinking of refinancing your student loan, you can opt for LendKey to match you with prospective lenders. It’s important to compare the rates of different lenders before settling on one.
You don’t want to rush into a deal that’ll leave you in a worse financial situation than when you started out.