Financial technology firms have recently entered the Student Loans market to provide more appealing refinance rates and novel repayment strategies. Fintech businesses frequently target underserved markets, and in the instance of student loan repayment, the underserved market would be the 11.4% of borrowers with student loans that were 90 days past due or in default as of the fourth quarter of 2018. Refinancing options that are more accessible and reasonable as well as creative repayment strategies may be able to help some of these borrowers get back on track.
These fintech firms provide refinancing choices. While some merely make options more accessible to millennials, others offer rates based on the more established credit scoring systems. A number of these businesses provide rates and options based on criteria like educational attainment and their own algorithms to grade your creditworthiness in novel ways.
Just a few of the fintech sector giants that have entered the student loan market are SoFi, Laurel Road, and Splash Financial. An application and loan management procedure that is frequently streamlined and significantly more integrated into online dashboards and mobile apps is one advantage that each can provide over traditional banks and credit unions.
Always do your research and compare as many possibilities as you can before making a choice to ensure that you are getting the greatest deal.
Comparative Refinance Rate Tools
Credible. You can compare student loan refinance rates from eight different lenders using this tool. It can streamline choices for customers between fintech and credit unions in an accessible comparison tool.
Just bear in mind that Credible only works with a small number of loan partners, so you should always shop around as there might be more affordable rates available.
LendKey is a website that lets borrowers compare refinance rates side by side, much like Credible does. When compared to other similar platforms, this service offers a good number of lender possibilities, but it provides very little information about which businesses are supplying the rates until you move further with the application.
New Concepts in Fintech
CommonBond is a fascinating innovator thanks to its full fintech approach to employee benefit alternatives for student loan repayment, refinancing, and lending to students. A flex contribution program is available through CommonBond for Business, and it gives employees the choice of directly contributing to the repayment of their student loans or working with them to develop financial literacy skills for debt reduction.
Another fintech company, Gradifi, offers refinancing options packaged with employee benefits plans dubbed SLP, or “student loan paydown.” In order to help employees’ 529 college savings plans for their children’s education, Gradifi also provides employers with a program called College SaveUp. Programs like these are becoming a more attractive alternative for employers because the problem of student debt is not likely to go away anytime soon.
This fintech provides refinance options to people with less established credit histories who might not be eligible for other conventional solutions. The Earnest website claims that in addition to credit scores and credit histories, it takes into account strong saving habits and high earning potential. If you fit this description, you may find that there are more options available at better prices.
To explain why people make certain economic decisions, FutureFuel turns to behavioral economics, which is the study of human behavior. This enables the business to tailor the employee benefit plans it offers to deal with student loan debt. Like many fintech companies, it focuses on the wants and requirements of millennials and uses cutting-edge strategies to connect with them on the channels they are most familiar with.
Make sure to speak up for yourself or enlist the aid of a licensed nonprofit student loan counselor as you weigh your alternatives to refinance or obtain new student loans. Despite the fact that many of these fintech businesses present novel ideas, keep in mind that they are also in business to generate money. Like anything else, do your research and take advantage of all the options at your disposal to improve your financial situation.