Brazos Student Loan Review: Low Interest Rates for Texas Borrowers

What you need to know:

• Brazos offers refinancing and parent loans to Texas residents.
• It offers a cash-back bonus to Student Loan Planner readers.
• Its approval process can be lengthy and involves a lot of paperwork.

Brazos Higher Education is a classic example of a company that should make big student loan lenders worried. Brazos, a Waco, Texas-based nonprofit, has been around since 1975. It acquired the website studentloans.com years ago and has since relaunched it with a focus on providing transparent and low-cost student loan refinancing and Parent Loans exclusively for Texas residents.

Brazos student loans: pros

As a nonprofit with a regional focus, Brazos uses credit scores, income and other traditional conventions like debt-to-income ratio to help determine creditworthiness. Here are reasons why refinancing your student loans with Brazos might work to your advantage:

• Save on interest rates. In some instances, lower interest rates are available through Brazos compared to national student loan lenders.
• Autopay discount. Brazos offers a discount of 0.25% if you sign up for autopay; however, this is dependent on your credit score.
• Upfront pricing. Brazos lists all of its interest rates and terms in a chart on its website. There are no additional fees.
• Deference and forbearance. Brazos has options for borrowers who encounter financial hardship due to economic, military or natural disaster circumstances. Its solutions aren’t as strong as federal options, however.

Because Brazos is locally based, it provides loans exclusively to Texas residents. When it comes to student loan refinancing, Texas borrowers may be able to get lower rates through Brazos than through national companies.

Brazos student loans: cons

Brazos student loans aren’t the perfect solution for everyone. Here are some disadvantages to refinancing with Brazos:

• Inflexible assessment. The Brazos interest rates are based on your FICO score. Some lenders use other information, in addition to your credit score, to determine your rate, so you may get a better rate elsewhere.
• Paperwork. The lengthy application process can be hard to complete for some borrowers. Because Brazos uses a third-party origination system for its loans, you’ll have to fill out an application with the third-party originator before completing the process to fund the loan with Brazos.
• Limited forbearance. Forbearance options are available, but only up to 12 months for economic reasons, 36 months for active military and three months for a natural disaster.

In a refinance lender survey by Student Loan Planner, Brazos was rated the lowest among the list of student loan refinance lenders. “The reason for that is that their application process is just not the best,” said Travis Hornsby, founder of Student Loan Planner. “You have to be very committed to get through their application process.”

Eligibility requirements

If you decide to move forward with Brazos and want to apply, here are the requirements you’ll need to meet in order to get approved:

• Be a U.S. citizen or national or a non-citizen with current permanent resident status.
• If applying with an eligible cosigner, you can be a non-citizen with a work or student visa.
• Show evidence of Texas residency.
• Minimum 18 years old
• Minimum of a bachelor’s degree from one of over 2,000 accredited Title IV institutions
• Verified income
• Credit score of at least 720

Application process

When you visit the Brazos website, the “Apply Now” button is visible on the top right side of the page. When you select “Apply Now” you will be directed to the online application page to begin setting up your account to apply.

For the application process and student loan servicing, Brazos uses a third-party origination system, Firstmark Services, a Nelnet company. You are required to set up an online account with that company to begin the application process once you click “Apply Now.”

If you have the minimum income and know your credit score, you’ll know what kind of rates you could qualify for at Brazos because its rates are published on its site. The organization won’t need to do any form of credit check to quote you rates. Therefore, the next step is to consent to a hard credit check if you want to move forward with a loan from Brazos.

If you’re applying with other lenders, make sure to time all of your hard credit checks so that they coincide. This way the hard credit checks only count against your credit score one time. The credit reporting agencies may record multiple inquiries for the same type of loan as a single inquiry as long as they’re made within a certain time frame.

The Brazos student loans process requires that you sign a credit agreement, which is normal when applying for credit. The final approval disclosure document is what actually makes the loan fund. In order for the final disclosure to be issued, you have to accept the approval disclosure, according to Brazos. Once you sign, however, you have the rescission period, a waiting period, which allows you an opportunity to cancel the loan funding.

Even though the process is straightforward, other lenders have a slightly more efficient process. Know that you’re going to jump through a couple hoops to see if you can qualify for Brazos’ below-market rates.

Here is the information you’ll need to submit your application for a Brazos student loan:

• Proof of Texas residency
• Social Security number
• Permanent address
• Proof of income
• A payoff verification from your current loan servicer or lenders, with the address where payoffs will be sent to

If you have questions, you can call FirstMark Services or email Brazos at info@brazos.us.com.

Should you refinance with Brazos?

In a survey of Student Loan Planner clients, Brazos was rated worst overall as a lender according to borrowers who had recently refinanced through the lender. Its score, seven out of 10, was largely due to its website, which respondents felt was hard to navigate, as well as its poor customer service. That said, if you live in Texas and can get a lower rate with Brazos, it might be worth the hassle.

You should only refinance student loans with Brazos if refinancing makes sense for your overall strategy. If you owe less than 1.5 times your income and work in the private sector, you will probably get a better deal by refinancing instead of using federal repayment programs. The reason is that you’ll pay less in interest.

At Brazos, you could be paying significantly less interest than with the federal student loan program. Plus, you can take advantage of the cash-back bonus for Student Loan Planner readers.

Just make sure that you don’t refinance if you owe way more than what you earn. In that case, forgiveness strategies could make more sense.

Refinance private student loans, get a bonus in 2020

$500 CASH BACK* For 100k+, 300 bonus 50k to 99k

VISIT EARNEST Variable 3.50% - 8.72% Fixed 4.25% - 8.77%

$750 CASH BACK* For 250k+, tiered 300 to 500 bonus for 50k to 250k

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VISIT COMMONBOND Variable 1.76% - 6.45% Fixed 4.25% - 6.45%

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VISIT ELFI Variable 2.39% - 6.01% Fixed 4.50% - 6.69%

$750 CASH BACK* For 150k+, tiered 100 to 400 bonus for 5k to 149k

VISIT CREDIBLE Variable 2.39% - 8.72% Fixed 4.25% - 8.72%

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