APR starting at 4.17% ¹
Pros
- Current account holders get discounts on interest rates and enrollment in autopay
- Apply only once throughout college career with multiyear approvals
- Offers co-signer release
- Allows student loan refinancing for borrowers without a degree
Cons
- Limits on maximum loan amounts
- No tools for prequalification checks
Overview
Citizens, formerly known as Citizens Bank, stands as one of the largest retail banks in the United States. Headquartered in Providence, Rhode Island, the company boasts a network of over 900 branches nationwide. In addition to its retail banking services, Citizens also extends its reach by providing student loans to individuals across the country.
Citizens specializes in private student loan origination, offered to both undergraduate and graduate students. They also provide services for student loan refinancing. Citizens is one of the few lenders that permit borrowers to refinance their loans, even if they left school before completing their degree. They do not impose any application, disbursement, origination, and prepayment fees.
Student Loan Features: Terms, Fees, and other Costs
Citizens Bank specializes in offering fixed-rate undergraduate loans, which means that variable interest rates are not available for these specific loans. Citizens Bank extends loans to a specific set of individuals. These loans are available to U.S. citizens, permanent residents, as well as international students who have eligible co-signers.
The loan terms offered by Citizens for student loans span from five to 15 years. The loan amounts range starts from $1,000 and extends up to a maximum of $150,000. It’s important to note that the maximum limit includes the total amount borrowed from other student loan providers.
Citizens Bank provides fixed interest rates for undergraduate loans, which vary between 4.99% and 13.47%. They offer variable interest rates ranging from 4.49% to 13.47%. Citizens Bank does not impose any origination or disbursement fees on their loans. However, in the event that you miss a payment, you will be subject to a late fee equivalent to 5% of the payment amount.
Repayment System
1. Immediate
By opting for the immediate repayment plan, you are required to make complete payments towards both the principal amount and the accrued interest while you are still attending school. Choosing the immediate repayment option can result in the lowest total repayment cost for your loan.
2. Deferred
When you opt for the deferred repayment plan, you are not required to make any payments towards your loan while you are attending school or for a period of six months after graduating.
This option has the highest total cost because interest begins accruing on your loan while you are still in school, resulting in a higher overall repayment amount
3. Interest Only
If you decide to select the interest-only repayment plan, your payments will only cover the accrued interest during your time in school and for six months after you graduate. This repayment option will result in a higher overall cost compared to the immediate repayment plan. However, it is still a more cost-effective choice compared to the deferred repayment plan because you are actively paying off the interest while you are a student.
Benefits and Perks from Citizens
Autopay Discount
By enrolling in automatic payments for your student loan, you will be eligible to receive a 0.25% interest rate discount. Additionally, this discount can be combined with their loyalty discount, potentially reducing your interest rate by up to 0.50%.
Loyalty Discount
If you or a co-signer holds an existing checking, savings, or loan account with Citizens, you may be eligible for a 0.25% interest rate discount on your student loan. Note that checking and savings accounts are only available to residents of specific states, including Connecticut, Delaware, Florida, Massachusetts, Maryland, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Virginia, and Vermont.
Hardship Forbearance
In the event that you or your co-signer are facing financial difficulties, you have the option to request a hardship forbearance from Citizens Bank. If your request is granted, you will be able to temporarily suspend your loan payments.
Multiyear Approval
When you apply for a loan with Citizens Bank, they will assess your eligibility for future loans as well. If you meet the criteria, you can request additional funding for subsequent academic years without the need to fill out a new application.
Loan Refinancing Features: Terms, Fees, and other Costs
In most cases, student loan refinancing lenders generally require applicants to have obtained at least a bachelor’s degree. However, Citizens Bank breaks this norm and offers an exception. Even if you left school before completing your degree, you can still be eligible to qualify for a loan with Citizens Bank.
You have the option to apply for refinancing with Citizens Bank once you have made 12 qualifying payments after leaving school. Citizens Bank’s refinancing loans provide flexibility with both variable and fixed interest rate options.
In order to be eligible for refinancing with Citizens Bank, you need to have a minimum of $10,000 in student loans. For individuals with a bachelor’s degree or below, the maximum refinancing limit is $300,000. However, if you hold a graduate degree, you can refinance up to a maximum of $500,000.
Citizens Bank offers qualifying individuals fixed interest rates ranging from 5.39% to 11.88% for refinancing loans. Alternatively, variable interest rates are available within the range of 5.09% to 11.67%. Similar to student loans, there are no application, origination, or disbursement fees but there is a late fee of 5% will be applied in the event of late payments.
Students who are refinancing their own loans with Citizens Bank can choose repayment terms that span from five to 20 years. Once a repayment term is selected, the monthly payments will be evenly distributed over the chosen timeframe.
Student Loan Eligibility Requirements
In order to obtain a loan from Citizens Bank, it is necessary to be enrolled as a full- or half-time student at an eligible institution. These loans are accessible to U.S. residents, permanent citizens, and international students who have a friend or family member willing to co-sign the student loan application.
Applicants must have reached the age of majority in their respective state. This corresponds to a minimum age of 18 years In most states. Additionally Citizens Bank requires student loan applicants or their co-signers to have a minimum annual income of $12,000 or more. For refinancing loans, the income requirement is higher, with a minimum income of $24,000.
Citizens Bank does not explicitly disclose its minimum credit score requirement for loan eligibility. Instead, it they highlight the requirement for a reasonably strong score. It’s worth noting that the majority of approved applicants had credit scores that ranged from very good to excellent. According to the bank’s annual report in 2020, 88% of their student loans were granted to borrowers with a minimum credit score of 740
Loan Application
Citizens Bank does not offer a prequalification tool for its private student loans. To determine your eligibility for a loan and the specific rates available to you, you will need to complete a loan application. Keep in mind that the application process typically involves a hard credit check, which may have a temporary impact on your credit score.
The online application process typically requires you to provide general personal information about yourself and details regarding your educational institution. ou will be asked to submit supporting documents such as recent pay stubs or proof of income, information about your monthly mortgage or rental payment, and your expected graduation date. International students or DACA recipients may need to provide documentation related to your immigration status as part of the application process.
After you have filled out and submitted your application, Citizens Bank will carefully review the information provided and conduct a credit check. Upon approval of your application, Citizens Bank will inform you about the available loan term options that you can choose from. Once you have made your decision and chosen a loan, it is necessary to formally accept the loan’s terms and conditions and sign a promissory note
Conclusion
If you find yourself in need of private loans to finance your education, Citizens Bank may present a favorable choice. They provide multiyear approvals which means you only need to apply once throughout your college career to receive funding. Moreover, if you already hold an account with Citizens Bank, you may be eligible for additional interest rate discounts.
Citizens Bank does enforce stringent eligibility criteria for borrowers and sets limits on loan amounts. Additionally, it lacks a prequalification feature, which means you cannot assess your eligibility or obtain rate information without impacting your credit.
