Splash Financial is the youngest entrant in the student loan refinancing market. Splash started out by offering loans to medical residents and fellows in mid-2017. They did a great job marketing to this segment of the market, but then Sofi tried to kill off the competition by aggressively getting into resident and fellow refinancing too.
Then Splash Financial caught second wind with a major partnership with Pentagon Federal Credit Union (aka PenFed). Splash can now refinance anyone’s student loans thanks to this partnership with one of the nation’s top three largest credit unions.
Splash is a must check if you’re an MD or DO still in training, you have a mid-700s credit score, you love the Midwest (their HQ is in Cleveland), or you want to give a major credit union a shot at offering you a great low rate.
After all, credit unions are tax-exempt organizations with a low cost of capital (customer deposits). That means Splash should be offering some of the best rates in the industry. Let’s explore that claim in this Splash Financial student loan refinancing review.
Who Can Refinance with Splash Now?
I’ll start with the general refinancing product for Splash Financial. I’ll cover the medical resident and fellow product in a bit.
If you have a credit score above 700 and an income above $42,000, you meet the minimum hurdle to qualify. You can refinance your own student loans, but Splash will even allow refinancing Parent PLUS loans into your child’s name as well.
Splash announcing the partnership with Pentagon Federal Credit Union (PenFed) is a big deal. Splash is similar to Credible in that it’s a middleman for huge financial institutions that don’t understand great websites and millennial-friendly customer service yet.
The only way Splash can offer fantastic rates is with a huge financial institution standing behind it. Now that they have PenFed, you’re basically seeing PenFed offers with customer support provided with the gusto of a young startup.
Why Did PenFed Partner with Splash and How Could it Help You Save Money?
I saw a story about PenFed recently in the Wall Street Journal about their desire to grow to $75 billion in deposits, which is massive for a credit union.
Key to this strategy is to attract young customers like you. In a decade or two, millennials will have much of the assets in the US and PenFed wants to play the long game to win this market.
How many 20, 30, and 40 somethings do you know that just randomly join a credit union? Not a ton. I think PenFed decided to offer student loan refinancing to get into one of the major markets where millennials have a big need.
That’s why if refinance your loans through Splash’s general refinancing channel, you’ll need to become a PenFed student loan refinance customer.
While adding another financial account might not sound great, in the case of First Republic Bank, they offer the student loan refinancing as a loss leader. They’re content to break even or even lose money so that they can build relationships and have you use a mortgage or other bank product.
For that reason, I think you’ll see some amazingly low rates that might even get lower over time as Splash works with PenFed to show them the value of acquiring new customers through offering great rates on student loan refinancing.
How to Apply with Splash Financial
Applying with Splash Financial is simple. Like all student loan refinance companies, you can check an estimate of what your rate would be with a couple minute application that does not affect your credit score.
If you like what you see, then you want to move to the next stage of the process and upload a few key documents:
- Driver’s License or Photo ID
- Proof of Degree (like Transcripts or diploma)
- Proof of Income (tax returns or pay stubs)
- Payoff statements for existing loans
You’ll also need to become a PenFed member like I mentioned earlier.
Once you complete the process, you’ll get an answer within a few business days. If you accept the loan, Splash should pay off your existing loans within two weeks and then you’ll owe them directly. The servicing of the loan is through PenFed, which compared to most federal loan servicers looks like customer service in a first-class cabin on an Emirates flight.
The repayment terms are interesting too, with 5, 8, 12, and 15-year options. That’s different from most lenders, which prefer the 7- and 10-year. You might refinance somewhere else to a 15-year, then 12-year with Splash, then 10-year fixed somewhere else and pick up cash back bonuses each time you refinance. It’s kind of like credit card travel reward hacking.
How Splash Financial Refinances Loans for Residents and Fellows
Splash stands out in three ways compared to other refinancing programs in this category:
- You can pay only $1 a month in training
- Your interest accrues but does not compound during training
- Your payments start 90 days after training ends or seven years after refinancing, whichever comes sooner
There is no income minimum for Splash’s residency and fellow refinancing product. You just need a 700 or greater credit score.
Splash’s Low Payment During Training for Physicians
My wife worked in NYC as a resident physician before we met. When we started dating, she was already doing her fellowship in Philly.
When we were reviewing her loan statements, I noticed a long history of forbearance and deferment. She shared stories with me about how it was hard to make ends meet sometimes with her relatively low income, high stress level, and big city costs.
She ended up refinancing because of her modest amount of debt and how much credit she lost for PSLF while not making payments.
If she had gone the private practice route, someone like my wife could have benefitted from the Splash residency refinancing. She would have cut her interest rate from 6.8% to something much lower and saved thousands of dollars.
Be careful though because REPAYE sometimes offers interest subsidies and the payment is often in the $300 to $400 a month range. REPAYE also keeps the door open to PSLF while refinancing does not. Hence, I would not suggest anyone refinance solely because of the low payment.
That said, for a segment of the MD / DO population that’s very cash-strapped with plans to move to a big income attending job in private practice, this could be a great decision to refinance.
Starting Repayment When You’re Done with Training
One of the better features with Splash Financial’s resident and fellow refinancing product is the long period of low required payments. Some companies ask you to begin payments more quickly than that, which could throw you in a bind if you refinanced as a PGY-1 and decided to do a fellowship only to find out you had a big bill due.
This payment flexibility is not as good as REPAYE, but it’s still very friendly to the borrower.
How Good is Splash Financial Customer Service?
I wanted to include some customer service information and observations during this Splash Financial student loan refinancing review. Splash is lightning fast in responding via chat on their website. That’s the method that I would suggest if you have any questions.
I have a pretty good vantage point of how responsive all the different lenders are in the student loan refinancing space. Whenever I’ve had a question or issue come up with a reader of this site, Splash has gotten right on it and helped fix it.
That’s an anecdotal account, but I’ve been impressed. Some of the bigger lenders don’t really care that much about you because you’re not going to move the dial for them as much.
FAQ for Refinancing with Splash Financial
- Do you have to open a PenFed account to refinance with Splash? If you have an MD or DO degree and you’re in training, then no. Otherwise yes you’ll need a PenFed account.
- Does Splash allow cosigners? Yes, the income and credit score rules are also relaxed for the primary borrowers if you add a well-qualified cosigner.
- Does Splash Financial offer cosigner release? Yes, after only 12 months of on time payments you can apply to remove your cosigner from the refinancing. You should not plan on that happening for sure though.
- Are there forbearance protections with Splash? Yes, if you lose your job or have another unfortunate live event, Splash will let you apply for paused payments. That said, this protection is not as robust as other lenders.
- Can you apply if you didn’t graduate school? No, you need to have a degree from a Title IV institution. Most universities will qualify.
- What kind of interest rate terms does Splash offer? Fixed and variable, though I strongly suggest fixed.
Splash Financial Referral Bonus for Student Loan Planner Readers
You can check the student loan refinancing page to see how big the current Splash Financial bonus is. Instead of keeping all the referral bonus for our company’s profit, we try to get large cash-back bonuses issued to you instead by keeping our cut way lower than most other sites.
That means you could get hundreds of dollars for refinancing through Splash that can go to getting you out of debt even sooner. You can also refinance multiple times, and you should as long as you don’t mind the application process and you can get a lower rate.
There are many options to refinance student loans. We personally refinanced our own student loans twice and my wife bought an insanely expensive and fancy pair of boots with the second cash back bonus. We still got out of debt pretty rapidly though so that made me happy.
If you know you need to refinance, you probably have a debt to income ratio below 2 to 1 (or you will soon), and you work in the private sector. If that’s the case, give them a try if this Splash Financial student loan refinancing review resonated with you and see if you could cut your interest cost by thousands and pick up a cash back bonus.
If you’re unsure, that’s why we do student loan plans for readers so you can be confident you’re not making the wrong decision.
Have any experience with Splash Financial? We’d love to know your story in the comments section below.
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Splash Financial may be great if you are a W-2 type young person trying to re-finance your student loans but don’t even bother if you are self-employed, retired or have passive income as they don’t count investment income and will make it super hard for you with never-ending requests for documentation of income.
I found the customer service from the representative that was assigned to me to be non-existent. Unanswered emails, phone calls and no cummication or updates to the status of your application. I had to call constantly to check on my loan instead of being proactively communicated with to let me know what documents they needed. Basically a huge waste of my time. Plus, I asked them if a retired person with the highest income from Social Security could qualify and they said no. Serious ageism here!
I’m sorry that was your experience. Different lenders have different requirements, though, so you might check another lender.