First Republic Bank Student Loan Refinancing Review

If you have more than $40,000 of 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@firstrepublic.com after your finish reading this article.

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. That said, the interest rate you could get will blow anything else out of the water.

See if you qualify for the best refinancing deal in the country
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 $300 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? (Effective as of November 2019)

Check these rates out below (with additional rate discount). I got them directly from their website, and yes, they’re fixed rates.

With First Republic Rate Discount

5 Year	7 Year	10 Year	15 Year
1.95%	2.55%	3.00%	3.45%

The rates above (effective November 2019) reflect three discounts

1. Rate discount of 0.50% for keeping at least 10% of the original loan amount in your checking account for at least 12 months.
2. An additional 0.25% discount for keeping at least 20% of the original loan amount in your checking account for at least 12 months.
3. Relationship based pricing discount of 2% for maintaining autopay 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 not required after the initial 12 month period. They understand if you wanted to use some of that cash for buying a home or paying down debt.

If you did plan to make a significant withdrawal that put you below the 10% or 20% of the loan threshold in the checking account, I’d reach out to your banker at First Republic and just ask if it could pose any problems with your student loan with them.

Recall that the risk is that you could lose the additional 0.5% plus 0.25% rate reduction. Even without that discount, the fixed rates are significantly 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.

Without First Republic Rate Discount

If you’d rather not keep much in checking, then you won’t get the extra discount, and these would be your rates instead.

5 Year	7 Year	10 Year	15 Year
2.70%	3.30%	3.75%	4.20%

Notice that these rates are still similar to the best rates offered by national lenders.

To see what the rate would be if you only had 10% of the loan amount in checking, just subtract 0.5% from the rates above.

15% Non-Retirement Liquidity Requirement

The actual credit requirement is to have a minimum of 15% of the loan amount in non-retirement liquidity.

If you already have the 15% (say in another bank, Vanguard mutual funds, Schwab brokerage, etc.), moving the 10% into the checking is as simple as execution (writing a check, transferring via ACH, etc.).

Why It’s Worth the Extra Steps to Get the First Republic Bank Refinancing Deal

Many of the best fixed rates available elsewhere are at least 1% higher.

That’s why First Republic Bank is relevant 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.

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 $40,000 to $300,000.

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 (SF, LA, Newport Beach, San Diego, Palo Alto, Santa Barbara, Palm Desert)
• Boston, MA
• Portland, OR
• Greenwich, CT
• Palm Beach, FL

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 search First Republic Bank locations near you and see if there’s one in your county.

You Must Open a First Republic Bank Account (and Keeping Significant Savings in There)

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 definitely live with if I needed to refinance.

• You have to open a bank account with First Republic Bank and keep at least 10% of the 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 loan payment.
• You must live 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.
• 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 the liquidity requirement. Just be aware of that before you apply so you don’t waste your time.

You might be able to satisfy that requirement by involving a spouse or family member.

First Republic Student Loan Refinancing is Structured Differently

I’m not confident that First Republic would forgive the loan in the event of death or disability. That’s easy to protect against though with very cheap term life insurance and a small additional amount of disability insurance. They might end up forgiving the loan in case the worst happens, but I’d prefer you prepared as if it wouldn’t happen.

You’re 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, if there’s any chance you could discharge this loan in bankruptcy, they’d only want to take the risk 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 and goodwill 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 $40,000 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. Know that if you owe more than $300,000, 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.

Who to Contact for the Student Loan Planner $300 First Republic Bonus?

Email my banker Miguel at mandrada@firstrepublic.com. He will be able to help you apply and potentially get the best interest rate anywhere. Make sure to put in the subject line, “Student Loan Planner referral bonus” and they’ll take good care of you.

See if you qualify by emailing my First Republic banker