If you have exhausted your federal student aid options and need additional school funding, private student loans can play an important role in your education. However, finding a private lender can be overwhelming. There are many different companies and it can be difficult to compare your options.
LendKey aims to simplify the process. It is different from other private student lenders in that it is not itself a lender. Instead, it partners with hundreds of nonprofits credit unions and banks to finance the loans. When you apply for a loan through LendKey, it will try to connect you with one of its partners, saving you from having to shop around on your own.
While LendKey’s loan process may be easier for some, there are some downsides to this approach. Here’s what you need to know about LendKey Student Loans.
The benefits explained
- You can borrow up to the total cost of participation. With some federal and private student loans, there are caps on how much you can borrow per year, but with LendKey, you can borrow up to the full cost of attending your school’s program. However, LendKey has lifetime borrowing limits.
- Interest rates are potentially low. By working with credit unions and non-profit banks, LendKey is able to offer competitive interest rates on private undergraduate student loans. Variable rates for refinances start at 3.57% and fixed rates at 2.99% (including automatic discounts).
- There are no application or setup fees. LendKey loans have no application or assembly costsbut there are late fees.
- Payments are required while you are in school. LendKey Private Student Loans require you to make payments while you’re in school; you do not have the option of deferring payments until you graduate. You either have to pay $25 per month or make interest-only payments while in school.
- Loan policies vary depending on the partner lender. Since LendKey works with partner lenders, lending policies can vary widely. Each partner has their own practices regarding things such as co-signer versions and abstentionso you won’t be able to know the details until you’ve been put in touch with a lender.
- Eligibility requirements also vary depending on the partner lender. Eligibility criteria, such as minimum credit scores, vary by lender partner. As such, it’s hard to tell if you qualify for a loan without submitting an application and going through a credit check.
Student loans offered by LendKey
LendKey has private student loans for undergraduate and graduate students enrolled at least half-time in a degree-granting program from an eligible school. The loans have no application or origination fees and no prepayment penalties.
Borrowers can choose between variable and fixed interest rates for undergraduate or graduate loans. Variable rates range from 1.66% to 7.90%, while fixed rates range from 3.99% to 7.73%. LendKey offers a 0.25% interest rate reduction if you sign up for automatic payments, which is included in the lowest rate here.
Although students can borrow up to the total cost of attendance, there is an overall maximum limit that they can borrow from LendKey. For undergraduate students, the limit is $120,000 and for graduate students, $160,000.
|LendKey Student Loan Rates and Terms|
|Variable rates||1.66% to 7.90%|
|Fixed rates||3.99% to 7.73%|
|Loan amounts||$2,000 up to the total cost of participation (subject to an overall limit)|
|Loan conditions||Five years|
To qualify for a private student loan with LendKey, you must meet certain criteria.
- You are enrolled at least half-time in a degree program at an eligible school.
- You are a US citizen or permanent resident.
- You have a GPA of at least 2.0 and meet your school’s guidelines for satisfactory academic progress.
- Your school balance must not be overdue for more than 90 days, as certified by the school
- You or your co-signer must have an income of at least $24,000.
If you are linked to a partner lender that is a credit union, you must become a member of the credit union before you can qualify for a loan. To join the credit union, you may have to pay a fee or open a bank account.
Is loan prequalification available?
LendKey does not offer loan prequalification. To find out if you qualify for a loan and what interest rate you will receive, you must submit a loan application and go through a firm credit applicationwhich can affect your credit score.
Multiple inquiries from auto, mortgage, or student lenders within a short period of time are generally processed as one inquiry and will not have a significant impact on your credit score.
LendKey does not charge setup or application fees. Plus, there are no prepayment penalties if you prepay your loan. However, there may be late fees if you miss your payment due date.
With LendKey, you can get a 0.25% interest rate reduction if you sign up for automatic payments.
According to LendKey’s loan terms, you must make payments while you study. There are two options:
- Lump sum payments – You can choose to pay $25 per month.
- Interest only payments – You can make full interest payments.
While other lenders offer benefits such as graduation rewards or good quality discounts, LendKey does not offer these benefits. It does have a referral bonus program though, but it is only for refinancing student loans; private student loans are not eligible. If you refer a friend who takes out a refinance loan through LendKey, you and your friend will receive a $200 bonus.
Are co-signers required?
LendKey doesn’t require co-signers, but having one increases your chances of getting a loan and a lower interest rate. Since LendKey works with many different partners, co-signer release policies may vary. Some partner lenders may allow you to request a co-signer release after making a set number of one-time payments, but others may not. If this is an important factor for youcheck with the partner lender before accepting the loan.
Loan forbearance and release options
LendKey does not have a central forbearance or disclaimer policy. Terms may vary by partner lender, so be sure to review the lender’s policies before going ahead with the loan.
Lendkey has a few special programs in place for Covid 19 when it comes to reimbursement. Terms can be found here.
Loan approval and disbursement timeframe
LendKey recommends that borrowers apply for a loan at least one month before funds are needed to allow time for the loan to be approved, processed, certified and disbursed. Your initial request can be approved quickly. However, this is not final, as you may be asked to provide additional documents. Once this process is complete, the lender will contact your school to certify the loan, which may take several weeks.
Is student loan refinancing available?
Yes. LendKey offers student loan refinance for federal and private student loans. It has loan terms ranging from five to 20 years, with variable and fixed interest rates starting at 3.08% and 2.99%, respectively. Before submitting a loan application, make sure Check out the best student loan refinance companies.
|LendKey Refinance Rates and Terms|
|Variable rates||3.57% to 6.83%|
|Fixed rates||2.99% to 9.93%|
|Loan conditions||Five to 20 years|
Although LendKey works with partner lenders, it acts as a loan manager for loans made through its platform. It is not included in the latest report from the Consumer Financial Protection Bureau’s Student Loans Ombudsman.
LendKey’s customer service team is available by phone or email.
Customer support is available Monday through Friday from 9:00 a.m. to 8:00 p.m. EST.
Apply for a LendKey Student Loan
Although private student loans can play an important role in financing your studies, it is always a good idea. to complete the Free Application for Federal Student Aid (FAFSA). It will help you get all the financial aid you qualify for, including federal grants and loans.
If you decide to proceed with your LendKey Private Student Loan application, be prepared to provide the following information:
- Last name
- Social Security number
- Name of employer
- Loan amount requested
- Name of the school
- Program cost
- Financial aid expected
- Co-signer information (if applicable)
If you’re overwhelmed with the idea of looking for a private student loan, LendKey can streamline the process for you. By connecting you to hundreds of credit unions and non-profit banks, it can help you find a lender quickly and easily.
However, some people may find its process frustrating. Without knowing who your lender is in advance, you won’t know their exact policies on major issues. When it comes to details about co-signer releases and abstention, that can be a big deal. Before submitting a loan application to LendKey or any other lender, compare offers from several private student loan companies to find the loan best suited to your needs.
Investopedia is dedicated to providing consumers with unbiased and comprehensive reviews of student lenders. We’ve collected over 45 data points from over 15 lenders, including interest rates, fees, loan amounts and repayment terms, to ensure our content helps users make the right decision. borrowing decision for their educational needs.