Citizens Bank One Student Loan Review
You might need to turn to private student loans to help cover the gap. While there are lenders out there that can help, the Citizens Bank One student loan is one that comes with some unique features that you won’t find with other private lenders.
Here’s what you need to know about the Citizens Bank One private student loan, and how to decide if it’s the right choice for you.
Citizens Bank One Student Loan Review
Citizens Bank was founded more than 150 years ago, and is a respected bank. As a bank, it offers a large menu of products and services, but we’ll focus on the Citizens Bank One student loan for this review.
Understanding the basics can help you decide if this is the right move for you, no matter your situation.
Citizens Bank One Student Loan Details
Here are some of the basic details you can expect when it comes to getting a private student loan through Citizens Bank:
- Loan amounts: $1,000 to $295,000, depending on your education level and degree
- Loan terms: 5, 10, or 15 years
- Types of loans: Students and parents
- Origination fee: $0
- Interest rates: Start at 4.45% APR for students, 5.43% APR for parents
- Cosigner release: Yes
- Forbearance: Up to 12 months
- Income-driven repayment: No
- Eligible for PSLF: No
- Multi-year approval: Yes
Compare these details to other private student loans, as well as to federal loans. Remember that it’s not just about the lowest rate or a lack of fees. You need to consider the whole picture, and compare benefits and disadvantages.
Citizens Bank One Features
As with many student loans, it’s possible to borrow, based on your credit and other factors. Additionally, many students might need someone to cosign with them in order to qualify. On top of that, Citizens Bank offers low starting APRs — which can, in some cases, be lower than federal loan rates, particularly on Parent PLUS loans.
However, there are some features that set the Citizens Bank One private student loan apart from other lenders:
- Multi-year approval: No other private lender offers multi-year approval for their student loans. With other lenders, you have to re-apply for a new loan each year. However, Citizens One offers up to four years’ worth of approval, so you don’t have to keep coming back to apply.
You won’t know if you’ve been granted a multi-year approval until after you apply. When you apply you could possibly receive one of following four results:
- Approved for a single-year loan
- Approved for a multi-year loan
- Rejected for a loan
- Asked to provide a cosigner
If you are approved for the multi-year loan, there is only one hard credit check when you initially apply. In subsequent years, the bank performs annual soft credit checks (which don’t affect your score) after you’ve met the initial qualifications.
But keep in mind that Citizens Bank’s multi-year approval feature only guarantees year-to-year approval. The annual soft credit checks are used to ensure you and your cosigner remain eligible. So while you may be told you’ve been approved for a specific number of years, that approval is not set in stone.
After the annual soft credit check confirms you are eligible to borrow for another year, each year’s loan is a separate loan. And the interest rate with each new loan is adjusted to reflect the market change in interest rates.
You are not locked in to committing to a new loan each year with Citizen’s, so you can decide to shop around each year to see if other lenders are offering better rates.
- Cosigner release: Many private lenders won’t allow for cosigner release. However, Citizens Bank has a provision that makes it possible for parents to be taken off the loan later on. This is valuable because it lets a cosigner off the hook without needing to go through the process of refinancing the student loan.
Citizens Bank also offers a forbearance option for hardship and offers interest rate discounts for those with Citizens bank accounts.
These features, along with the flexible repayment options, make Citizens Bank an attractive choice for getting a private student loan.
Citizens Bank One Rates and Fees
One of the great things about Citizens Bank is that it offers loans with no origination fees. As a result, you could save money in the long run.
For primary undergraduate borrowers, this might not matter as much. After all, federal loans don’t come with fees.
However, those getting PLUS loans could benefit from the lack of fees. Graduate students using PLUS loans in addition to graduate federal loans have to pay origination fees, as do those getting Parent PLUS loans. According to Citizens Bank, savings include:
- Up to $1,003 savings for grad students over a Grad PLUS Loan
- Up to $652 savings for parents over a Parent PLUS Loan
That’s not too shabby.
Additionally, for those with good credit, the Citizens Bank One student loan can also come with a lower interest rate. Rates start as low as 4.45% APR for student borrowers and 5.43% APR for parent borrowers. That’s lower than federal loan rates.
You can also get rate discounts, amounting to up to 0.50% off:
- 0.25% off for already having a Citizens Bank account
- 0.25% off for setting up automatic payments
If you qualify for the rate discounts, it could save you a significant amount of money over the course of the loan.
Pros and Cons of the Citizens Bank One Loan
Of course, there are always pros and cons associated with any product, and the Citizens Bank private student loan is no exception. Make sure you understand the advantages and disadvantages before you move forward.
- Low starting APR
- Multi-year approval
- Cosigner release
- A number of repayment options
- Parent loans
- Forbearance option
- Available interest rate discounts
- May not be able to cover 100% of school expenses
- Need good credit for the best deals
- Students usually need to find someone to cosign
- Citizens Bank accounts aren’t available in all states
- Lack of access to the same protections and programs available with federal student loans
It’s also important to note that, even though you can get multi-year approval, you’re still subject to a financial review. While there won’t be a hard credit check, Citizens Bank will still perform a soft inquiry on your credit and your cosigner’s credit.
If you can qualify, though, Citizens Bank can make a great option for a private student loan.
How to Apply for a Citizens Bank One Private Student Loan
In order to apply, you need to create an account with Citizens Bank. If you know you want to apply for a private student loan, it might make sense to plan ahead and get a regular saving or checking account with Citizens Bank. That way, you’ll be able to qualify for one of the interest rate discounts.
In order to get a Citizens Bank account, you need to provide the same information that’s required to open any bank account in the U.S.:
- Birth date
- Social Security number
You also need to set up your username and password and create security questions.
After you’re approved for an account, you can then apply for a student loan.
When applying for a student loan, you’ll need to provide some more information to Citizens Bank:
- Recent pay stub
- How much you pay for housing
- What school you attend
- Employer information
- How much it costs to attend your school
- Any financial aid you’ve already received
- Expected graduation date
- How much you want to borrow
- Personal reference
- Cosigner information, if needed
It’s easier to apply if you have the information ready to go.
Citizens Bank One Student Loan Eligibility Requirements
With federal loans, you don’t have to worry about credit or income. Anyone can get federal student loans, up to the annual cap, as long as they are citizens or have proper residency documentation.
Private lenders, though, have different requirements, and you will have to meet criteria that are a little more demanding:
- Be a U.S. citizen or permanent resident
- Be at least 18 years old
- Meet minimum credit requirements
- Minimum household income of $12,000 per year
- Enrolled at least half-time at a qualifying school
- Have no prior student loan defaults
If you don’t meet the credit requirements, you might need to find someone willing to cosign your loan. Parents can also qualify to take out loans on behalf of a child’s education and must prove that they can handle the debt.
Should You Get a Citizens Bank One Private Student Loan?
The low APRs, especially for well-qualified applicants, can be tempting when it comes to paying for college. However, before you get a private student loan with Citizens Bank — or any private lender — it’s important to consider the benefits that come with federal student loans.
For example, with federal loans, you can use income-driven repayment, and there are guaranteed deferment options. Additionally, federal loans are eligible for Public Service Loan Forgiveness and other loan forgiveness programs. Private loans are not eligible for federal forgiveness programs.
While there are some state programs that will help you pay off private loans, the reality is that they are few and far between.
If you have a college funding gap after exhausting other options, using a Citizens Bank private student loan can make a lot of sense, especially if you have good credit and a solid income.
For the most part, many students are better off looking to other options before getting any private student loan. Apply for scholarships and consider federal student loans.
However, if you still need help paying for college, private loans can be better options than PLUS loans in some cases — especially if you or a cosigner has good credit.
A Citizens Bank One student loan can be a good choice if you want to qualify for multi-year funding and if you like the idea of a cosigner release. These are features that many other private lenders don’t offer.
However, while there is a forbearance program with Citizens Bank, you won’t have access to the income-driven and forgiveness programs available for federal student loans. As a result, it’s important to carefully consider your situation, and what you think you might need in the future.
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This post was written by Miranda Marquit, who has been covering personal finance for more than 10 years, including aspects of college planning and student loans. She is a recognized money expert and has contributed to numerous media outlets, including Forbes, Marketwatch, NPR, USA Today, Investopedia, and U.S. News & World Report. She lives in Idaho with her teenage son — who she’s just starting to guide through the college selection and admissions process.