Where to Find the Best Student Loan Refinancing and Private Loans in Texas

According to the Institute For College Access and Success, 48% of Texas students from the Class of 2019 graduated with debt. The average debt load for those Texas graduates was $26,951.

Like students who attend school in other states, Texas students can take advantage of federal student loan programs. Additionally, the state of Texas offers its own loans through the College Access Loan Program (CAL).

However, federal student loans come with annual borrowing limits. And CAL loans don’t qualify for federal benefits like Income-Driven Repayment (IDR) or Public Service Loan Forgiveness.

If you’ve hit your federal borrowing limits, compare your private student loan options with the CAL program. And refinancing your existing Texas student loans, could help you find a better rate or terms. Read on to see your best Texas student loan refinancing and private student loan options.

Where to get a student loan refinance in Texas

The risk versus reward of refinancing is different for federal and private student loans. When federal loans are refinanced with a private lender, they lose eligibility for all federal benefits like IDR and federal forgiveness programs.

For these reasons, carefully compare the pros and cons of refinancing your federal student loans before proceeding. Since private student loans are already ineligible for federal benefits, refinancing them usually makes sense if you could improve your rates, terms or benefits.

Below we break down all of your best options to get a student loan refinance in Texas, looking at both Texas-specific and national refinance lenders.

National student loan refinance lenders

Many of the best refinancing lenders lend to students throughout the country regardless of their state of residence. Examples of top national student loan refinancing lenders that Texas graduates may want to consider include:

• Earnest: Get a refinancing bonus of up to $1,000.
• Laurel Road: Get a refinancing bonus of up to $1,250.
• ELFI: Get a refinancing bonus of up to $1,275.

In addition to interest rates, there are various factors that you’ll want to consider when comparing refinancing lenders. These include:

• Terms: What repayment terms are available?
• Fees: Does the lender charge application or origination fees? Will you have to pay a penalty for paying off your loan early?
• Payment flexibility: Does the lender have a formal hardship forbearance policy? Does the lender offer academic, military or residency deferment?
• Customer service: Does the lender offer in-house customer service? What are current and past customers saying about their experiences in public reviews?

Compare the current rates, terms, and benefits of 11 top refinancing lenders using our refinancing guide. You can also check your rates with multiple lenders at once using the comparison shopping tool at Credible.

Texas-specific student loan refinancing

Brazos is a private lender that offers student loan refinancing (and parent loans) exclusively to Texas residents. Here are the key details of the Brazos student loan refinancing product:

• Rate type: Variable and fixed
• Terms: 5, 7, 10, and 20 years
• Loan amounts: $10,000 to $150,000 ($400,000 maximum for graduate students)
• Cosigners allowed: Yes
• Origination fee: None
• Prepayment penalty: None

Advantages of Brazos include its 0.25% autopay discount, transparent pricing, and its willingness to provide hardship forbearances of up to 12 months.

That said, from our experience, most Texas borrowers will find their best rate is with a national lender.

Get a bonus up to $1,000 or more by refinancing with a different lender.

Should You Refinance Your Student Loans Into Your Mortgage?

Texas home values have soared in the past few years, so should you take out a second mortgage instead of refinancing with a private student loan lender?

No, since you won't receive any tax benefits for doing so. Professionals such as physicians could secure a zero down payment Texas doctor mortgage though and use money you were saving towards a down payment on paying down student loans instead.

Where to get private student loans in Texas

If you’re still attending school in Texas and need to take out student loans, you’ll probably want to explore your federal loan choices first. But if you’ve exhausted those options and still have a funding gap, here are your private student loan options.

Texas-specific private student loans

The Higher Education Servicing Corporation (HESC) is a Texas-based private, non-profit organization that was founded in 1978 to service both private and federal student loans.

HESC offers low-cost private student loans to Texas residents through its Texas Extra Credit program. Here are the key details of the program:

• Rate type: Variable and fixed
• Interest rates: 2.490% to 9.834% APR*
• Terms: 10 or 15 years
• Loan amounts: $1,000 to $65,000 annually
• Cosigners allowed: Yes
• Origination fee: None
• Prepayment penalty: None

*Rates as of November 11, 2020, and are subject to change without notice.

Benefits of the Texas Extra Credit program include 0.25% interest rate discount options for autopay and graduation and the ability to have a cosigner released after 24 consecutive on-time payments.

Texas Extra Credit loans also offer multiple in-school repayment options: full repayment, interest-only payments or full deferment. To qualify, you must be a permanent resident of the state of Texas and enrolled at least half-time at an eligible school.

National private student loan lenders

Quite a few private student loan lenders will lend to eligible students nationwide. Below are a few of our favorites at Student Loan Planner®.

• Sallie Mae: Best for one-stop shopping.
• Earnest: Best for fast application and approval.
• Ascent: Great for student loans without a cosigner.
• College Ave: Low rates and flexible options.

Many of the refinancing lender comparison factors also apply to shopping for private student loans. However, here are two additional factors to take into consideration:

• In-school payment flexibility. Will you be expected to begin making full payments immediately following loan disbursement? Or does the lender offer modified in-school payment options such as interest-only payments, fixed payments or full deferment.
• Cosigner release. Most private student loans are cosigned. Will the lender consider releasing a cosigner after a certain number of on-time payments?

For a deeper look at your private student loan options, see our best private student loan companies. You can also use a lender comparison site, like Credible, to save time.

How Texas residents can reduce student debt

As you’re preparing for your postgraduate education in Texas, be sure to compare school tuition prices. By choosing a more affordable school, you could significantly reduce your costs and the number of student loans you need to pay for your education.

Grants, scholarships and student loan forgiveness programs can also reduce the out-of-pocket education cost for Texas residents.

Related: 10 Options for Student Loan Forgiveness in Texas

Planning to attend graduate school in Texas? If so, consider scheduling a pre-debt consultation with one of our Student Loan Planner® advisors who can help you find the best ways to finance your graduate degree.