How to Refinance Your USAA Student Loan [Step-By-Step]

The United Service Automobile Association (USAA) is a company that offers insurance, banking, and investment products to its members, who are mostly U.S. military service members and their families. 

USAA members could access mortgages, personal loans, and discounted student loans through a partnership with Wells Fargo — at least until December 2016, when the partnership ended. 

But what does that mean if you took out a USAA student loan, and what are your refinancing options?

We’ll cover everything you need to know about refinancing your legacy USAA student loans. We’ll also guide you on how to secure lower interest rates, reduce your monthly payments, and simplify your repayment strategy. 

An Overview of USAA’s Student Loans

USAA’s student loan program used to be a dependable choice for members and military families looking for affordable higher education financing.

Their partnership with Wells Fargo provided private student loans and refinancing opportunities for servicemen and their dependents, offering competitive interest rates and flexible repayment options. 

However, in 2016, USAA stepped away from student loans as part of a strategic decision to refocus on its core financial services, such as banking, insurance, and mortgage lending.

While USAA no longer offers student loan services, if you have a legacy loan, you can still refinance it through other reputable lenders and access lower interest rates, reduce your monthly payments, and even modify your repayment terms. 

As USAA no longer provides student loans, legacy borrowers must turn to other trusted lenders for refinancing options. This guide focuses on helping you navigate these options effectively.

What You Need to Know If You Have a Legacy USAA Student Loan

Before refinancing your legacy loan, there are some key factors you need to consider regarding your repayment and refinancing options, including:

Your Loan is Likely Serviced Elsewhere

When USAA exited the student loan market, servicing these loans reverted to Wells Fargo or transferred to other third-party servicers. This means that while your loan originated with USAA, you’re now making payments to other institutions. 

Check your loan account statements or contact your loan servicer to confirm who manages your loan and what repayment terms currently apply. 

Refinancing Could Save You Money

USAA student loans may not come with some of the more flexible options currently offered by today’s lenders, such as income-based repayments or deferral. Refinancing your loan with another private lender will help you:

• Lower your interest rate, especially if your credit score has improved
• Reduce monthly payments and extend your repayment term
• Simplify your repayments by consolidating multiple loans into one

Eligibility for Federal Student Loans Benefits is Limited

Because USAA loans are private, they don’t qualify for protections available to federal loans, such as:

• Income-Driven Repayment (IDR) plans
• Federal student loan forgiveness programs
• Deferment and forbearance under federal loan protections

However, many student loan refinancing lenders offer limited deferment or repayment options, especially for military members and borrowers facing financial hardships. 

Pro Tip: To take advantage of these offerings, get in touch with Student Loan Professor (SLP) for help navigating the current student loan market and comparing different lenders to secure the best student loan refinancing deals. 

Check Your Current Loan Terms

Understanding the terms of your USAA loans will help you make better-informed refinancing decisions. Especially pay attention to:

• Your current interest rate (fixed or variable)
• Your remaining repayment term
• Any prepayment penalties associated with paying off your loan early

This information will allow you to compare your existing loans with potential refinancing offers so you can make the best financial decisions. 

Top Options to Refinance Your USAA Student Loans

Refinancing your USAA student loans with the right lender can lead to lower interest rates, reduced monthly payments, and more favorable repayment terms. Here are some of our top options:

1. SoFi

SoFi, short for Social Finance, Inc., is one of the most popular student loan refinance companies. It’s known for its competitive rates, flexible terms, and exclusive perks. 

SoFi offers highly competitive fixed and variable interest rates and comes with a 0.25% autopay discount and an additional 0.25% discount for SLP clients. Depending on where you apply, you may also score a monetary bonus too. 

Additionally, SoFi offers prequalification, which allows you to check your eligibility and potential refinancing rate offers without affecting your credit score. Here’s a quick overview of the refinance terms you can expect should you decide to go with SoFi:

• Credit score requirement: 650
• Repayment terms: 5, 7, 10, and 20 years

SoFi offers competitive fixed and variable interest rates, flexible repayment terms, and exclusive discounts. Check their website for current rates and eligibility requirements.

2. Laurel Road

Laurel Road offers a variety of student loan refinancing solutions with special rates and benefits for healthcare professionals. It allows you to refinance as much student loan debt as is certified by your school, making it ideal if you have a large debt balance. 

Additionally, if you’re a Student Loan Professor client, you can get a $500 cash bonus for loans over $100,000 and a $200 bonus for smaller loans. 

Laurel Road offers plenty of savings opportunities, including a 0.25% autopay rate discount and an additional 0.55% variable APR reduction if you open a bank account and make qualifying direct deposits each statement period. 

Here’s an overview of the terms you can expect if you refinance student loans with Laurel Road:

• Credit score requirements: 680
• Repayment terms: 5, 7, 10. 15., and 20 years

Laurel Road offers refinancing options tailored for healthcare professionals and borrowers with large debt balances. Visit their website for current rates and terms.

3. Earnest

Earnest is a great choice if you’re looking for flexible repayment options and a user-friendly platform. It offers customizable repayment options allowing you to tailor your monthly repayments and loan terms to your financial situation. 

Before issuing a loan, Earnest takes into account factors beyond your credit reports, such as your employment history and savings pattern, which can be a great advantage if you have a strong financial profile.

Earnest student loan refinance products also come with certain lender-specific perks, including:

• A 0.25% rate discount for all Student Loan Professor clients
• Ability to switch to interest-only payments for 3 months or use forbearance (if approved)
• Automatic biweekly payments, which save you money on interest
• Ability to skip a payment within a given 12-month period. 

In addition to these benefits, here’s a look at the rates you can expect if you refinance with Earnest:

• Minimum credit score: At least 650
• Repayment terms: 5 – 20 years (customizable)

Earnest provides highly customizable repayment options and competitive fixed and variable interest rates. For current rates and eligibility details, visit their website.

4. Splash Financial

Splash Financial specializes in student loan refinancing and partners with multiple lenders to make it easier to compare rates and find the best offers. 

Along with competitive rates, Splash Financial provides a 0.25% autopay discount and doesn’t charge application, origination, or prepayment fees.

It also offers a $500 cash bonus for Student Loan Professor clients with loans over $100,000. To qualify for a refinance loan, you need to have graduated with at least an associate’s degree and a credit score of at least 650—though a higher score is advantageous.

Here’s an overview of the rates you can expect with Splash Financial:

• Credit score requirements: 700 (soft minimum)
• Repayment terms: 5 – 25 years

Splash Financial partners with multiple lenders to help you compare competitive rates and repayment terms. Visit their platform for the latest refinancing offers.

5. Education Loan Finance

ELFi is a great refinance alternative if you have more than $10,000 in debt and are looking for competitive rates and personalized support. 

ELFi allows you to borrow up to the total balance of your remaining student loan with refinancing term options from five to fifteen years. If you are a Student Loan Professor client, you’ll also get a $550 cash bonus for loans above $100,000 and $250 for smaller loans. 

Here’s an overview of the rates you can expect with ELFi:

• Credit score requirements: 680
• Repayment terms: 5, 7, 10, 15 and 20 years

ELFi provides refinancing options with competitive rates and personalized support. Check their website for current terms and rate details.

Key Considerations for Military Members

If you are a member of the military or a veteran, you should explore programs that offer student loan repayment assistance, including:

• Public Service Loan Forgiveness (PSLF): Military service qualifies as public service employment, making you eligible for PSLF after 120 qualifying on-time payments
• Servicemembers Civil Relief Act (SCRA) Interest Rate Cap: This limits the interest rates on debts incurred pre-service to 6% during active-duty service. 
• Military Service Deferment: This allows you to postpone your loan repayments during certain periods of active duty. 

Steps to Refinance Your USAA Student Loans

Step 1: Evaluate Your Financial Goals

Before diving into the student loan refinancing process, clarify what you hope to achieve. Knowing your goals will help you select the right lender and loan terms. 

Among the questions you should ask yourself to establish your goals are:

• Do you want lower monthly payments?
• Do you want to pay off your loans faster with a shorter term?
• Is reducing your interest rates your top priority?

Step 2: Check Your Credit Score and Financial Standing

Lenders prefer borrowers with good credit and stable income — and will offer better rates if you meet these criteria. Here’s what you should know to ensure you meet these criteria:

• Credit score: A score of 650 or higher is often required to access a student loan refinance. However, the best rates go to those with excellent credit.
• Debt-to-income ratio: Aim for a DTI below 50% to improve your chances of approval. 
• Income stability: You need proof of steady employment or consistent income to access the best refinance loan rates. 

Pro Tip: If your credit score needs improvement, employ strategies like paying down existing debt or contesting inaccuracies on your credit report. 

Step 3: Research and Compare Lenders

Different lenders offer varying rates, terms, and benefits. Use online tools or platforms to compare multiple lenders at once. When comparing lenders, focus on:

• Interest rates: Explore variable and fixed rate options, and check lender websites for the most up-to-date offers.
• Loan terms: Consider flexible repayment terms that range from 5 to 20 years.
• Perks and features: Some lenders offer benefits like unemployment protection or military discounts. 

Alternatively, you can contact SLP for a professional suitability analysis and help finding the best loan refinancing deals. 

Step 4: Gather Required Documentation

To streamline your application process, prepare these documents:

• Proof of income (pay stubs, tax returns, or bank statements will do)
• Your current loan balance and repayment details
• Proof of identity (your driver’s license or passport will do)
• Any additional financial documentation required by your chosen lender

Step 5: Prequalify Without Impacting Your Credit Score

Some lenders allow you to prequalify for refinancing offers using a soft credit pull, which doesn’t affect your credit score. Doing this gives you an idea of the rates and terms you might qualify for so you can compare with other offers and ensure you’re getting the best deal. 

After choosing a lender, complete their application process, being as thorough and accurate as possible, since discrepancies could delay your approval.

Step 6: Review and Sign the Agreement

After your application is approved, carefully review the loan agreement, and as you do so, pay attention to the following:

• The interest rates offered (fixed or variable)
• Your expected monthly loan bill amount
• The loan terms and repayment schedule
• Any fees or penalties (e.g., lateness fees and prepayment penalties)

If everything looks good, sign the agreement and finalize the refinance. Your new lender will then pay off your existing USAA loans, and you’ll start making payments under the new loan. 

Pro Tip: Set up autopay to ensure timely payment. Depending on your lender, this could also qualify you for an interest rate discount.

Take Control of Your USAA Student Loan and Secure Your Future Today

Refinancing your legacy USAA loan can open doors to significant savings and more manageable repayment terms. When you understand your financial goals, compare offers from reputable lenders, and follow a clear refinancing process, you can position yourself for long-term financial success. 

However, navigating the student loan market can feel overwhelming, but you don’t have to navigate this alone. Our team of experts is here to help you find and secure the best refinance deals tailored to your unique needs. 

Get in touch with Student Loan Professor to get personalized advice and start your journey toward smarter student loan management.