Ratings Methodology for Student Loan Refinance

Ratings Methodology for
Student Loan Refinance

NerdWallet’s overall ratings for student loan refinance are weighted averages of ratings in the following categories: :

• Faster repayment
• Disclosures
• Availability
• Payment flexibility
• Customer support

Data collection and review process

Our survey of more than 29 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and the top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.

We consider 41 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

Information updates

Student loan questionnaires are reassessed annually, and writers and editors make review updates throughout the year as necessary. We work to maintain contact with providers to keep information current.

The review team

The review team is made up of student loans writers and editors who cover student finance topics, including student loans, college debt and college alternatives. Each writer and editor follows NerdWallet’s strict guidelines for editorial integrity.

In addition to NerdWallet, the work of our team members has appeared in The New York Times, The Associated Press, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media outlets. The student loan team’s writers and editors combined have more than 30 years of experience in finance.

For faster repayment

We pay close attention to the following:

• Offers a 10-year term or shorter
• Has three or more loan terms
• Allows greater-than-minimum payments through autopay.
• Allows bi-weekly payments through autopay
• In-school repayment option

Top lenders generally meet all of NerdWallet’s criteria for faster repayment.

For disclosures

We consider the following:

• Interest rates
• Soft credit check utilization
• Fees
• Underwriting requirement disclosures

Top lenders generally allow borrowers to get their interest rate and loan terms with a soft credit check and disclose their interest rate range, minimum income requirements and minimum credit score requirements.

For availability

We look at the following eligibility requirements:

• Degree completion
• Visa-holders
• State of residence
• Parent loan refinance
• Co-signer
• PLUS loan refinance
• Refinance amounts

Top lenders generally lend to those with at least an associate’s degree and allow the refinancing of PLUS loans.

For payment flexibility

We evaluate the following:

• Forbearance options
• Death and disability discharge

Lenders with the highest marks for payment flexibility generally offer at least five options for borrowers struggling with payments.

For customer support

We analyze:

• Access to a dedicated advisor
• Use of an in-house customer service team
• Live chat availability
• Complaints process
• Website and transparency

Top lenders generally have a defined complaint process and separate complaint department or ombudsman, live chat and in-house customer service.

Note on 5-star must-haves

In some cases, a lender may score high enough to receive a five-star rating but doesn’t meet one or more of the must-have criteria. They include:

• A soft credit check
• Current rates displayed on the lender’s website
• At least 12 months of forbearance

Half a star is deducted from lenders who meet the point requirement for five stars but don’t meet the must-have criteria.