- May 16, 2017
- Posted by: Travis
- Category: Refinancing
If you have student loans, plan on eventually repaying them one day, and live close to NYC, major cities in California, Boston, Portland, Palm Beach, or Connecticut, then you need to reach out to my banker Miguel at mandrada
Why? When they show up. First Republic Bank student loan refinancing offers the best fixed rates anywhere. Are there catches? Yes there are some that we’ll review here, but the interest rate you could get will blow anything else out of the water.
As an added bonus, if you reach out to the Miguel at the email above and mention that Student Loan Planner sent you, you’ll get a $200 bonus in addition to the lower interest rate if you refinance. Of course, if you want a broad review of your loan strategy, you can always hire me for student loan help.
What Are First Republic’s Interest Rates Right Now? (As of September 2017)
Check these rates out below. I got them directly from their website, and yes, they’re fixed rates.
By contrast, many of the best fixed rates available elsewhere are at least 1% higher. That’s why they’re relevant, because they give fantastically low interest rates. However, like most things in life, it comes with a caveat.
They Will Only Refinance You if You Live in Certain Areas
First Republic Bank student loan refinancing is limited to very specific geographic areas around the country. To qualify, you have to have a really high credit score and live within a ~1 hr drive of these areas:
- New York City
- California (SF, LA, Newport Beach, San Diego, Palo Alto, Santa Barbara, Palm Desert)
- Greenwich, CT
- Palm Beach, FL
You Have to Have a Banking Relationship with Them
Let’s be frank, with interest rates this low, this product is probably designed to break even. I seriously doubt they’re making a ton of profit from this. Rather, I think they’ve designed this awesome refinancing deal to win other parts of your business and develop a banking relationship.
To get this deal, you have to keep a bank account balance of at least $3500 open with them. That account has to be set up for direct deposit as well as automatic loan payment. That’s the real requirement aside from living in one of their service areas.
I would expect they will want to talk to you about mortgage, business lending, possibly wealth management, and other services they provide. They might offer compelling value in these areas and they might not. Like any financial services company, you get to decide if you’ll do more business with them aside from just the bank account and the student loan refinancing.
First Republic Student Loan Refinancing is Structured as a Personal Loan
Personal loans have no forgiveness in the event of death or disability. First Republic structures their student loans in this way, so it’s not really a student loan. You’re basically taking out an unsecured line of credit with them when you refinance. That’s why they only take borrowers with really high credit scores and put you through an extensive bank loan underwriting process. After all, personal loans can be discharged in bankruptcy so they only want to take a chance with financially secure clients.
If you’re going to get a First Republic student loan refinancing deal, you MUST make sure you have a large term life insurance policy and disability policy. You want to have enough to either retire the debt or make payments on it in the event of your demise or incapacity.
Some Odd Language in the Docs, but Really Not that Concerning if You Think About it
If you’re a lawyer or a savvy borrower and read all the fine print, you’ll notice some scary language in a First Republic Bank student loan refinancing agreement. Check this out:
For fixed rate loans, if at any time during the life of the loan the borrower does not maintain automatic loan payment or direct deposit, the rates will be listed as above plus 5.00%.
To me, that’s the only real concern. If First Republic wanted to play hardball and you make a mistake with direct deposit or autopay, then they technically have the right to jack up those rates above by 5%. That would put the rate at a higher level than federal loans.
Some folks who’ve read this over think this would give them the right to raise these interest rates by 5% if the bank got acquired or merged as well.
Pay Your Loan and You’ll be Getting those Low Rates Long Term
Here’s what I think of that language. They put it in there as a way to protect themselves and add a stick to the carrot of the awesome interest rates. There’s no way they would impose that penalty harshly or unfairly, otherwise they’d lose all the business these really low rates are supposed to capture.
What’s My Takeaway on First Republic Student Loan Refinancing?
I think they offer an excellent product for anyone with $100,000 to $300,000 of loans with a sizable income. Just in case something happened that affected your fixed rate, you’d want the ability to make big payments quickly.
At such a low interest rate though, a refinancing would save tens of thousands for many Student Loan Planner readers. If you’re willing to open a bank account with them and you’re not worried about the potential for them increasing the rate if you forget to do autopay and direct deposit, then you’ll save a lot of money by refinancing.
Who to Contact for the Student Loan Planner $200 First Republic Bonus?
Email my banker Miguel at mandrada