LendKey Review: How He Refinanced and Paid Off $60,000

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When Scott Perry completed graduate school, he was stuck with a soul-crushing amount of student loan debt — $60,000 to be exact. It’s the amount that could fund any of the following:

  • A high-end tiny house (or a normal-sized house in Alabama?)
  • A splendid dream vacation… for years
  • A yearly IRA maximum contribution for (almost) 11 people

Yeah. A lot of money.

After he graduated, Perry became a full-time project manager and for three years, he diligently paid the monthly $600 for his loans. However, he felt he wasn’t making much of a dent in paying the balance down.

Perry’s loans were mostly made up federal loans, came with a 6.8 percent interest rate over a 10-year repayment period. He decided that refinancing his loans might help him save some money.

So, Perry decided to find out more about how he could save money and shopped around for a lender who might give him a lower interest rate. He ultimately decided on refinancing with LendKey.

Overall Rating


LendKey is a lending platform that allows consumers to apply for and receive private student loans, student loan refinancing and home improvement loans from their local credit unions and community banks.

  • Ease of use


  • Forbearance


  • Payment postponement



  • Longer forbearance
  • Transparency


  • Limited in some states
  • Payment postponement limited

Perry’s research to refinance his loans was just the beginning. The journey to become debt free was fueled by the birth of his new son, but also for a desire to live a kind of lifestyle that didn’t involve constant stress around money.

He and his wife became more mindful of money and pay off their debt. It also sparked an idea for his side hustle.

This is his story of how he refinanced, saved $1,500, and paid off his $60,000 debt in one year!

What does it mean to refinance your student loans?

A refinance means taking your existing loans and getting a new loan to pay it off.

Ideally, people refinance in order to receive a lower interest rate, so in Perry’s case, he was hoping of a rate that would be significantly lower than his almost 7 percent he was paying.

When you refinance, you need to have good credit, so if your credit isn’t in the good to excellent range (high 600s to 750+), you may not get the lowest interest rate possible.

Keep in mind that you will get a hard credit pull when you actually apply with a lender to refinance.

Perry had great credit, so he was able to secure a 3 percent variable interest rate that always hovered between 2 to 4 percent.

He Shopped Around for a Lender

I bet the last time you bought a TV or plane ticket, you made sure to compare prices before you made your purchase. If you want to refinance your loans, you should do the same thing.

Lenders come in all shapes and sizes from larger institutions like Bank of America or Wells Fargo to smaller ones like LendKey, Earnest, and SoFi.

After researching a number of other lenders, Perry decided LendKey suited him the best.

Two Main Reasons Why He Chose LendKey

Due diligence is important when vetting a lender — this is your money we’re talking about! While interest rates are important to consider when making your decision, think about what else you value and why you would want to go with that particular company.

In addition, find out about the other bells and whistles a lender provides, such as 24/7 customer support.

Perry ultimately decided on LendKey for two main reasons:

1. They had the lowest interest rate.

2. They use community banks and credit unions as the source of your refinanced loan.

He explained, “I liked this because I felt like the money I would be paying in interest would at least be going to community-focused entities, as opposed to gigantic banks that make outrageous amounts of profit each year.”

How Much Perry Saved by Refinancing His Loans

Had Perry continued to pay the $60,000 in student loans without refinancing, he would’ve paid about $4,200 in interest over the life of the loan.

LendKey has a refinance calculator on their site, so Perry plugged in the numbers and was easily able to see how much he would be able to save.

“My monthly payment dropped below $400 per month. I saved at least $1,500 in interest by refinancing.” The reason why the monthly payment dropped was because the repayment period was longer than 10 years.

You can play around with the numbers on the refinance calculator. When plugging in a five-year repayment plan, the monthly payment jumped to $1,067 with a 2.58% interest rate (assuming you had excellent credit).

This is LendKey’s refinance calculator. Calculations were made based on the assumption of excellent credit.
This is how LendKey breaks down the refinance numbers for you. Pretty easy!

Getting Motivated to be Debt Free

If you have a savings account, you’re definitely ahead of the game. Well Kept Wallet polled 1,000 consumers and discovered that 40 percent didn’t even have a savings account. Those who did have a savings account struggled to save, as 32 percent didn’t even have $500 in there.

Saving by itself isn’t easy. Paying off debt while saving is even harder. It’s better to at least have something saved for an emergency than nothing at all.

“At first I paid only a little over the monthly minimum, as my wife and I were using extra income to expand our emergency savings at the time,” Perry explained. After spending some time bulking up their savings, Perry and his wife decided to use their side hustle income to knock out the debt.

Creating a Plan of Attack

Perry’s wife also had debt to pay off, so together, they came up with a plan. They vowed to pay it off quickly and their plan was to do it through their side hustles.

“My wife works in the medical field so she was able to get a contract job on Saturdays working at a local hospital. I did a combination of things, from cutting grass for a few clients to doing a handful of market research studies each month, to creating a baseball and softball-focused website called CatchersHome.com, which earns affiliate commissions on various products I advertise.”

He recalled, “This meant that every penny of additional income we earned from our day jobs and our side hustles started going to paying down the loans. At this time it wasn’t uncommon to put $1,500 [or more] per month toward student loan repayments. By the spring of 2018, we paid off the remaining balance of the loans!”

What the LendKey Process Was Like

Perry said his experience with LendKey was very positive. “I worked with different providers to see what rates they would offer. After I settled on Lendkey, the process was very smooth and I have no complaints.”

He said the process from research to actually securing the loan didn’t take that long — a few hours.

He also made sure to take advantage of many of the calculators and tools on various lender sites so you can see how much you’d be able to save if you refinanced.

“Each of the providers I was researching had a mechanism on their website that allowed you to put in your financial information.

Then, you could see the estimated rate and options. It only took a few minutes for each. I then plugged this information into a spreadsheet to compare my options,” he said.

He remembered that the most difficult part of the process was getting the federal loans paid off and transitioning that balance to his LendKey account.

“It’s a little clunky on the federal government’s end, [but] LendKey was great about it.”

LendKey also has customer service reps you can speak to on the phone if you have questions. Perry said he didn’t call because he felt he received enough information from the LendKey website.

Federal Loans vs. Private Loans

If you also have a lot of federal loans like Perry, keep in mind that once you refinance, that’s it. You can’t change your mind. You’ll lose your federal loan perks, which mostly involves eligibility for loan forgiveness.

The most important perks that federal loans offer include student loan forgiveness programs that can basically “forgive” or wipe out your loans. In order to qualify, you may need to do the following:

1. Diligently repay them for a number of years (usually 10)

2. You are employed by the government or a non-profit

For example, the Teacher Loan Forgiveness Program offers an eligibility of forgiveness of up to $17,500 if you teach full-time in a low-income school or educational service agency for at least five consecutive years.

Even if you don’t work for the government or non-profit, you can still take advantage of an income-based plan. There are several types of plans, but this means your income is the driving factor and can make your loan payments more affordable.

Perry definitely weighed the pros and cons behind the impact of a refinance and said, “I did lose some of the benefits that come with federal loans, but I felt it was a good trade-off because I was working in a growing field with a strong job and pretty good pay.”

Forbearance Benefits (In Case You Lose Your Job)

Another benefit of having federal loans is the fact that you are protected, in case you lose your job. You can either apply for deferment or forbearance.

A deferment means you may not be responsible for interest while forbearance means you will be on the hook for all interest that accrues during this time.

Perry said, “I can understand if people are hesitant to lose their federal student loan benefits, such as various repayment options should your income go down or you lose a job. I get it. It can be hard to make the leap.”

He added, “If you decide to refinance, the company you refinance through may have various repayment plans available that aren’t all that dissimilar to various federal programs.”

So, if this is a sticking point for you, it could be a good reason to call the lender and ask.

Think About Your Goals

If your goal is to quickly and aggressively knock out your student loans and you have a steady job, refinancing might be a good option for you.

It may be the quickest way to get rid of your debt. Of course, having a side job dedicated to paying off the debt will help you get there even faster.

Why a Variable Rate May Be a Good Route

Perry decided to go with a variable rate, which means the interest rate can change. A fixed rate means it will stay the same throughout the term.

“I chose the variable repayment option because the variable rate was lower than the fixed rate by at least a percentage point,” Perry recalled.

He goes on to explain his rationale for the risk involved with variable interest rates. “I knew there was risk in choosing the option because the variable rate could always go up (or down).

I decided it was worth the risk. My theory was that a three percent rate [or lower] was roughly four percentage points lower than my federal loans.

Also, the probability that the (variable) rate would jump that high and exceed the rate of my federal loans was low.”

He believed that a potential change of the rate would most likely only have a minimal impact on the amount of interest he would pay. It was his best bet for resulting in paying the least amount in interest.

While this route made sense for Perry, everyone’s situation is different. He recommends “understanding the pros and cons of each loan option. Evaluate your personal risk appetite and then pull the trigger.”

So, Should Everyone With Student Loans Refinance?

The first thing to think about is what your goals and whether you are willing to take some risks to reach them in less time.

Then consider the following options before refinancing:

  • Weigh the pros and cons of losing your federal loan benefits (but also ask your new lender if they offer any similar benefits)
  • Does it make sense to choose a fixed or variable interest rate?
  • Can you pick up a side gig?
  • How stable is your day job?
  • Calculate how many months it will take you to pay off the debt

While refinancing isn’t for everyone, it should at least be a consideration if you have student debt. However, Perry warned, “If your income fluctuates or you’re anxious about the stability of your job, maybe refinancing isn’t best for you.

Also, if you’re in a unique position — maybe your employer is paying off your loans or you’re a U.S. government employee that qualifies for public service loan forgiveness, refinancing might not make sense.”

Enjoying the Debt-Free Life

Perry beamed, “It was totally worth it to refinance. I saved a ton of money in interest.”

Paying off $60,000 in a year’s time is no small feat, and through side hustles and extra income from their day jobs, Perry and his wife were able to get it done.

They now enjoy having no student loan debt and can focus on other financial goals, such as a college fund for their baby and saving for retirement.


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