First Republic Bank used to offer the best fixed rates in the country for student loan refinancing if you lived in their service area. Sadly, they have decided to end their refinancing bonus referral program. You can still get student loan refinancing bonuses at other lenders here.
First Republic Bank student loan program is actually a personal loan
First Republic Bank now offers its student loan refinancing program as a personal loan, NOT a qualified education loan.
For most borrowers, that will not matter. The student loan interest deduction can only be taken for qualified educational debt, but most people who qualify to refinance with First Republic will earn too high of an income to qualify for this tax deduction.
Pros of First Republic student loan refinancing
The number one benefit of the First Republic Bank student loan program is the low interest rate. Low interest is always the top criteria for whenever you’re evaluating a refinancing deal.
First Republic Bank can now refinance more than just student debt, but many types of debt.
You can also include a bar study loan, residency loan, credit cards, auto loans, personal loans, and more.
The ability to consolidate and refinance all your non-housing debt into one monthly payment at a very low interest rate will definitely appeal to high income borrowers. This is a major perk that First Republic loans offer and can simplify repayment.
Cons of First Republic student loan refinancing
There isn’t a death or disability discharge with First Republic’s student loan program. That is a big difference compared with federal student loans, which forgive your debt tax free in the event of death or disability.
However, you can protect against the risk of death or disability in most cases. The interest savings from refinancing will likely be much greater than the cost of extra term life and disability insurance.
Another con is the requirement to do your banking with First Republic to maintain the low interest rates. For many borrowers that have a high average balance, that won’t matter compared to the low interest they get on their loans.
Also, when you refinance federal loans, you no longer qualify for student loan forgiveness, income-driven repayment, and your deferment and forbearance options may be limited. If you have a private loan, this is not a concern. If you have a graduate degree with PLUS loans, the interest savings could be worth it.
First Republic Bank student loan refinance rates
First Republic Bank shut down their refinancing program during the height of the pandemic in early 2020, but now they have re-entered the market. The lender offers fixed rates and no loan fees (no monthly fee, no prepayment fees, etc.).
Rate discounts for large checking account balance and direct deposit
Your interest rate could reflect three discounts:
- Rate discount of 0.50% for keeping at least 10% of the original loan amount in your checking account for at least three years.
- An additional 0.25% discount for keeping a minimum of 20% of the original loan amount in your checking account for at least three years.
- Relationship-based pricing discount of 2% for maintaining autopay aka auto-debit and direct deposit with your First Republic bank account.
First Republic would of course like you to keep a lot in the checking account for the duration of the loan. However, in my discussions with First Republic reps, that’s only required for three years.
Keeping 20% of your original loan amount in your checking isn’t possible for everyone. That’s why the best bang for your buck is keeping 10% of the loan amount in checking instead of 20%. You get a 0.50% discount off your interest rate, which is more than the extra 0.25% discount you get for keeping 20% of the loan amount in checking.
Recall that the risk is that you could lose the additional 0.50% plus 0.25% rate reduction. Even without that discount, the fixed rates are better than the major national lenders.
The only real way the loan could jump way up to rates above those offered by national lenders is if you closed your First Republic ATM Rebate Checking Account prior to the loan being paid off in full. Obviously, once the loan is gone you’re under no obligation to keep the account around unless you want to.
First Republic Bank prioritizes borrowers with assets more than other lenders
From reader feedback, we know other lenders can be sticklers for debt-to-income ratio maximums and other numeric metrics.
First Republic definitely has their own, and borrowers without credit scores over 750 and six figure incomes often do not qualify.
That said, if you do happen to have a history of good financial management, First Republic might overlook your debt-to-income ratio being a little high if you have some assets or demonstrated savings habits.
That makes sense, as your good financial habits could result in increased success selling you banking and investing products over time.
Just know that the approval process is very personal and old school compared to all the fintech lenders that have an answer for you in a couple minutes. First Republic’s underwriting standards may be more traditional.
To the extent we’ve heard criticism of First Republic’s student loan program, it’s usually that the process took longer than readers expected.
Requirements of First Republic Bank student loan program
Let’s be frank, with interest rates this low, this student loan refinancing 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, there are a few “catches” that I would live with if I needed to refinance. You’ll have to make the decision whether these requirements are too much or not if it’s the right product for you.
- You have to open a bank account with First Republic Bank and keep at least 10% of the approved loan amount in that account. That’s a big requirement, and if you’re not there yet, remember you can always refinance with another lender while you’re building up your savings.
- That account has to be set up for direct deposit as well as automatic payments.
- You must live in one of their service areas. Check out a complete list of locations.
- I would expect they will want to talk to you about mortgage, business lending, lines of credit, possibly wealth management, and other services they provide.
- You’ll need a high credit score (above 750 preferred)
Keep in mind that there’s no requirement to use other First Republic Bank products or services. I could live with an occasional email pitch in exchange for rates 1% to 2% lower than the market.
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.
The biggest hurdle to qualifying for the First Republic refinancing deal is going to be having 10% to 20% of the original loan balance amount in cash. Just be aware of that requirement before you apply so you don’t waste your time.
You might be able to satisfy that cash requirement by involving a spouse or family member as a cosigner.
First Republic Bank will only refinance your student loans if you live in certain areas
First Republic Bank student loan refinancing is limited to very specific geographic areas around the country for borrowers who plan to refinance $60,000 to $350,000.
I’ve seen the bank offer loans in excess of $350,000 for uniquely qualified individuals. You’d have to ask the loan officer and have your loan go through an added layer of scrutiny to get a loan refinance for more than $350,000.
To qualify, you have to have a really high credit score and live and work in the same county where they have branch locations.
These are the major metros where they have bank locations:
- New York City
- California (San Francisco, Los Angeles, Newport Beach, San Diego, Palo Alto, Santa Barbara, Palm Desert)
- Boston, Massachusetts
- Portland, Oregon
- Greenwich, Connecticut
- Palm Beach, Florida
There might be some common sense exceptions that can be made like if you work in Manhattan but take the ferry into work from Jersey City, or if you drive across the bridge from Vancouver, Washington to Portland, Oregon. But in general the location restriction is pretty clear cut. Just Google First Republic Bank locations near you and see if there’s one in your county.
First Republic student loan refinancing: good for high earners who prioritize the lowest rate
I think they offer an excellent product for anyone with $60,000 to $350,000 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. Know that if you owe more than $350,000, you can refinance as much as they’ll allow with First Republic and refinance the remainder elsewhere. You’d of course want to focus on prepaying the higher interest rate loans first.
With such low interest rates, First Republic refinancing would save tens of thousands for many Student Loan Planner® readers. If you’re willing to open a bank account, 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.
That’s why I think the First Republic Bank student loan program is worthwhile despite the hurdles you’ll jump through. They give fantastically low interest rates if you qualify.
Of course, feel free to comment below if you wanted to ask any questions first before contacting them.
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Are you sure you only need to leave the 10% of the loan balance in the checking account for 12 months, and not the entire loan period?
Great question. I reached out to a First Republic banker. They said that they monitor the account closely for the first 12 months. After that period though, you could go below the 10% liquidity threshold. I think what they’re basically saying is if you’re doing your banking with First Republic (ie you have 6% of loan value in checking instead of 10% because of a downpayment on a home), they’d keep the discount in place if that happened after the first 12 months. If you move everything out but the $3500 minimum account size, they might do away with the rate discount. It’s not a hard answer either way, so I would just check with them prior to making any big withdrawals if you want to make sure you keep the discount.
Hi Travis, follow up question to this. Do the discounted rates not apply until after the 12 month period? I was planning on aggressively paying my loans off in 6-8 months. In my case, is it not really worth it to go with First Republic? I was approved for 2.4% rates with other lenders which is lower than the non-discounted FR rates.
Do you mind sharing where you were able to find a 2.4% rate? Thank you!
Earnest & Laurel Road
Are they dead set on the living within 1 hr drive of those areas?
Generally yes it’s got to be within a county that their bank branch serves. You can always reach out to them to see in your specific case though. They will also allow you to be eligible if you happen to work within a qualifying area that they serve. IE you drive into Portland, Oregon for work but live an hour away. They’d be ok with that.
What if I currently live within the geographic region, but will soon be moving (in 4 months)? Can I open my bank account and refinance prior to the move and then move (while keeping my accounts open) without penalty?
Also, if my fiancee has sufficient liquid reserves to cover the remainder of my student loan balance, but because her investments are generating more returns than the interest rate at First Republic we are choosing to refinance, would you still recommend the disability / life insurance?
Yes you’d want to compare the all in cost of the additional coverage. LeverageRx is one place you could check for disability: https://www.studentloanplanner.com/get/leveragerxdisability and Policygenius is a good place to check for life insurance https://studentloanplanner.com/get/policygeniuslife (both referral links).
You can refi and keep the loan and account open if you move, I would just not mention that in the qualification process since you havent actually moved yet.
Help apply
You just need to email our contact above Elizabeth.
Travis – this is very helpful. Do you know if First Republic (when they open student loan refinancing back up) allows for the refinancing of loans that are not in your name? I’m looking to refinance my parents’ parent plus loans into my name
This article needs an update, since First Republic has effectively terminated the program.
Once COVID-19 hit, FRB rebranded the product to “Household Debt Refinancing” (instead of Student Loan Refinancing). This in my mind was more honest marketing since FRB’s student loans were never classified as education loans on credit reports anyway; they were always reported as personal loans.
But by late-May, the product was terminated entirely. The timing seems rather odd since I would have imagined FRB should be keen to market the product more and steal some business from competitors. I can only speculate they saw some loan losses in the last few months from the pandemic and decided to pull the plug.
First Republic just relaunched a student loan refinancing option using a personal loan, which gives the borrower more flexibility. The article was updated yesterday to reflect the change – let me know if you have any questions about the new program!
Yep, just saw it myself. Thanks for the heads up!