Undergrads now getting help negotiating private student loans

Posted: 16 June 2020 6:16 pm
News

Young woman talks about student loan with loan officer

Group buying power expanded from grad students to undergrads at LeverEdge.

If you’re an undergraduate college student who has maxed out your federal student loans or you have existing private student loans, startup student loan provider LeverEdge is leveraging the collective bargaining power of thousands of students just like you in order to negotiate a lower interest rate and lower fees.

This week LeverEdge expanded from serving only graduate students to helping undergrads as well, according to a Yahoo Finance interview.

The current deal offers undergrads variable rates between 1.24% and 10.44% for 5- to 15-year loans, or fixed rates of 4% to 11.78%. Your actual rate will depend on your personal financial circumstances.

For grad students, the rates range from 1.24% to 5.65% for a 5-year loan and 2.84% to 6.5% for a 15-year loan. That’s up to 4% lower than applying directly to lenders, the company says. Plus, grad students get a 0.5% cash reward for using LeverEdge.

“Everybody gets a discount … [but] there’s a lot of deviation from person to person,” Cofounder Chris Abkarians said in the article.

LeverEdge is currently building a group of students to negotiate student loan refinancing.

How LeverEdge works

Both undergrads and graduate students can join the LeverEdge negotiation group for free, and then apply for personalized quotes from multiple lenders. The company strongly encourages you to consider federal student loans first, but if you need to borrow more than the federal maximum or you’re not eligible for federal loans, you can select the lender that offers the best deal.

All lenders are vetted, and LeverEdge is pushing for relaxed income and cosigner requirements, as well as dischargeability in the event of disability or death, though currently most borrowers will need a source of income or a cosigner with steady income.

Loans through LeverEdge offer such features as:

  • No penalty for paying off early
  • 1% (undergrads) to 4% (grads) lower than applying directly
  • No fee to apply
  • No origination fee for undergrads
  • 0.25% discount for autopay

LeverEdge is available for domestic and international students who have attended, are attending or will attend a Title IV–accredited, nonprofit US university. There are no citizenship requirements. Currently, for-profit universities and community colleges are not supported.

How LeverEdge compares

While federal student loan interest rates have recently plunged below 3%, average private student loan rates can go as high as 12%, though private lenders may also lower their rates to remain competitive.

LeverEdge’s best variable interest rate for undergraduates is more than 1.5% lower than Credible’s starting APR, and Credible also provides multiple quotes to applicants. Ascent loans start at 2.71%.

Next year, finding a low rate might not be as much of a problem for some borrowers as qualifying for a loan, as private lenders have started to tighten credit and income requirements. A service like LeverEdge might be particularly beneficial to borrowers who don’t have a cosigner with an excellent credit score above 760 or who has otherwise struggled to qualify for the lowest rates a lender has to offer.

Note that unlike federal loans, private student loans do not typically provide income-based repayment options or loan forgiveness programs.

Photo: Getty Images

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