Refinancing student loans provides savings for borrowers who qualify for a lower rate. Unfortunately, many lenders don't allow students to refinance while they're still in school, so they must wait to take advantage of this opportunity.
Iowa Student Loan Liquidity Corporation (ISL) isn't one of those lenders. It's a nonprofit corporation that provides private student loans and refinance loans, managing more than $2.6 billion in educational debt. But its most unique offering is its in-school Reset Refinance Loan, which allows you to lower your rate prior to graduation.
This ISL student loan refinance review will help you decide if working with this lender is right for you.
Best for: In-school refinancing
ISL offers a variety of refinance loan options, including student and parent refinance loans, as well as medical and dental professional refinance loans. Many of these offerings are standard among private student loan lenders. However, ISL shines when it comes to its unique in-school refinancing.
Both parents and students are eligible to use ISL's Reset Refinance program while the student is still completing their degree. There are no fees associated with the Reset Refinance Loan and borrowers have the option to put off payments until after college.
Eligibility
ISL allows you to refinance as much as $200,000 in eligible student loan debt. You can refinance federal loans, private loans, and previously refinanced or consolidated debt with ISL. However, there are huge downsides to refinancing federal student loans. Unless you want to give up the opportunity for loan forgiveness and lose access to flexible income-driven repayment plans that only federal student loans provide, refinancing loans from the Department of Education isn't the best choice. If you want to move forward with refinancing private student loans, though, you won't be giving up these benefits.
Each refinance loan from ISL has its own eligibility requirements. To be eligible for the Reset Refinance Loan that ISL offers for in-school borrowers, you'll need to meet these criteria:
- You must not have a history of defaulting on private or government student loans.
- You and any cosigners must be U.S. citizens or lawful permanent residents residing in the U.S. (except Maine).
- You must have reached the age of majority in your state, be an emancipated minor, or apply with an eligible cosigner who has reached the age of majority.
- You, or the student you're borrowing for, must be enrolled at least half-time as an undergraduate or grad student at an eligible Title IV degree-granting institution.
- Monthly payments for all your approved credit can't exceed 40% of your gross monthly income, or 25% if your mortgage or rent isn't included. All student loan debt will be treated as though it's in repayment for purposes of this calculation.
- You and your cosigner must have a history of continuous employment in the past 2 years, unless you're retired, disabled, or receiving a verified income.
- You must have a minimum FICO score of 660.
- You can't have more than 2 accounts in the last 2 years that reported a 30-day delinquency, and you can't have any 60-day delinquencies in the past 2 years.
- Your credit history can't contain bankruptcies, charge-offs, repossessions, collections, judgments, foreclosures, or wage garnishments.
If you are applying with joint cosigners, at least one cosigner must independently meet all these criteria, except for debt-to-income ratio, which the cosigners can combine. Cosigner removal is available after just 24 consecutive payments if you meet the underwriting criteria at the time of your request.
Repayment
ISL offers the following repayment terms:
- 5 years
- 7 years
- 10 years
- 15 years
- 20 years
When you use the Reset Refinance program, you do not have to begin making payments until leaving school. You can also switch to a graduated repayment plan, which has lower payments to start that gradually increase over the life of the loan.
ISL also offers some payment solutions not available from many lenders, including assistance during times of financial hardship and interest rate discounts for active-duty military members.
Notable benefits
Here are some of the biggest benefits of ISL student refinance loans:
- You have the flexibility to refinance while in school.
- ISL doesn't charge prepayment, origination, or late fees.
- Cosigner release is available after only 24 payments if you meet underwriting criteria.
- Graduated payment plans are available, and there are options for students facing financial hardship.
- Qualifying active-duty service members are eligible for a reduced interest rate.
What to consider before refinancing with ISL
Before you apply for a refinance loan with ISL, there are a few key things to consider:
- Maine residents are not currently eligible for refinance loans with ISL.
- You must meet the lender's credit requirements or apply with a cosigner who does.
- If you must apply with a cosigner, they can be released if you make 24 payments and meet underwriting criteria.
How to apply
Here are the steps to apply for a refinance loan with ISL:
- Prequalify: Click on "Get Your Rate" on ISL's website. You'll be able to find out your rate in under a minute without affecting your credit score.
- Apply: Once you've seen your rates and found a loan you're interested in, you can complete the online application in under 15 minutes. You'll need to provide some basic information, including whether you're currently in school, the school you're attending, your anticipated graduation date, your contact details, your financial information, and whether you'll be applying with a cosigner (they must also submit their information).
- Accept your loan offer: If approved, read the loan terms and accept the loan. ISL will pay off your current lender, and you'll begin making payments on your new loan.
Compare student loan refinance rates
Methodology
Credible evaluates student loan lenders based on interest rates and origination fees, loan amounts, loan terms, discounts, whether cosigners are accepted and more. Our team of experts gathered information from each lender's website, customer service department, directly from our partners and via email support. We verified each data point to make sure it was accurate at the time of publication.
FAQ
Is ISL a trusted lending provider?
ISL is a trusted lending provider. It was established in 1979 and manages more than $2.6 billion in student loans. The lender also has a score of 4.7 out of 5 stars on Trustpilot.
Is it hard to get approved for a student loan refinance with ISL?
You will need to meet certain requirements to qualify for a refinance loan with ISL. These requirements include not having a history of default on student loans; having no recent charge-offs, repossessions, or foreclosures; and a minimum credit score of 660, among other criteria.
What credit score do you need to refinance with ISL?
The minimum FICO credit score to refinance with ISL is 660. If you cannot meet this requirement, you can refinance with a cosigner who does.
How long does it take to get approved for an ISL refinance loan?
You can submit a full application online within 15 minutes or less. However, the processing time can vary.
