Bank of America (BofA) no longer offers student loans. It stopped private student loan lending in 2008, stopped federal lending in 2010, and sold its remaining portfolio by 2017.
If you need to borrow for college, start with federal loans by filling out the Free Application for Federal Student Aid (FAFSA), then compare private lenders to fill any funding gaps. If you already have a BofA loan, you may consider consolidating it if it’s federal, or refinancing it with a new lender if it’s private.
This guide explains how to find out who services your old Bank of America loans and what to do next.
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Does Bank of America offer student loans?
After selling its student loan portfolio in 2017, Bank of America no longer offers or services student loans. If you originally borrowed through Bank of America, you may need to track down who currently holds your loan.
“Since the sale, it’s quite possible for the loans to be sold multiple times, so you may have a different servicer than you did last year or five years ago,” says Kat Tretina, a certified student loan counselor.
To find your current loan servicer, log in to StudentAid.gov for federal loans, or check your credit report at AnnualCreditReport.com for private loans.
Bank of America student loan alternatives
Federal loans
Federal student loans come from the U.S. Department of Education, and Congress sets their interest rates each year. Most federal undergraduate loans don’t require a credit check or a cosigner, and interest rates are fixed. Federal loans also offer protections private loans usually don’t, including income-driven repayment plans, Public Service Loan Forgiveness (PSLF), and deferment or forbearance options. You apply by completing the FAFSA.
Private loans
Banks, credit unions, and online lenders offer private student loans to cover costs federal aid doesn’t cover. Your approval and interest rate depend on your credit score, income, and debt-to-income (DTI) ratio. If your credit or income is limited, you may need a cosigner to qualify.
Prequalify with at least three lenders to compare rates, fees, and terms. Prequalification uses a soft credit check, so it won’t lower your score.
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Can I refinance my Bank of America student loans to change lenders?
Refinancing pays off your existing loan with a new loan from a different lender, so you’ll have a new servicer and a new account. You’ll have to qualify for the new loan based on your credit score, income, and DTI. If your credit or income doesn’t meet a lender’s requirements, you may need a cosigner to be approved.
If your BofA loan is federal, refinancing with a private lender ends access to federal benefits, including income-driven repayment and Public Service Loan Forgiveness (PSLF). Consider those protections before you refinance just to change servicers.
Follow these steps to determine your eligibility and apply for student loan refinancing:
1. Check your credit score
Because your credit score is a major factor in refinancing eligibility, review your credit report and score before you apply to refinance a student loan.
Most private lenders require a minimum credit score. Generally, the higher your credit score, the better your odds of qualifying for a loan and receiving a lower interest rate. If your credit score falls short of the minimum requirement, you may want to apply with a cosigner with good credit or take time to improve your credit before applying.
2. Pay down your debt
Another eligibility factor for private student loans is your DTI ratio, which compares your debt to your gross income. The maximum DTI when refinancing a student loan varies by lender, but generally, the lower, the better. You can lower your DTI by paying off debt or increasing your income.
3. Prequalify with multiple lenders
Research student loan refinancing rates and compare multiple lenders to find the best offer. While a low interest rate matters, also consider repayment terms, monthly payments, fees, and eligibility requirements.
4. Choose a lender and loan offer
Review any loan offers you receive and choose the loan with the best interest rate and terms. Enter the loan terms into a student loan refinancing calculator to see how much you might save with your new interest rate.
Running the numbers can help you choose the best loan term for you, such as five to 10 years, or longer. A shorter term may help you get a lower interest rate and pay off your debt faster, but your monthly payment may be higher. A longer repayment term could lower your monthly payments, but you’d pay more interest over the life of the loan and take longer to pay off the debt.
5. Fill out a loan application
You must complete a full application to lock in your new interest rate. Your lender will typically run a hard credit inquiry and request supporting documents, such as:
- Government-issued ID or driver’s license
- Social Security number
- Paperwork on your existing Bank of America loans
- Proof of income
- Proof of graduation
6. Sign your new loan documents
Once your lender approves your new loan, you’ll sign the loan documents. But don’t stop paying your old loans yet, since it may take the new lender a few weeks to process your refinance. Avoid late fees and negative marks on your credit report by paying your old debt until the account is closed for good.
Editor insight: “If you refinance, don’t assume your old loan is paid off when the new lender sends the money. I recommend asking your current servicer for a payoff statement showing the amount needed to close the loan, including any interest that accrued since your last payment.”
— Lisa Davis, Student Loans Editor, Credible
Can I consolidate my federal student loans from Bank of America?
Borrowers with FFEL loans from Bank of America or another lender can use Direct Consolidation Loans to combine multiple federal loans into a single loan.
Consolidating your loans may lower your monthly payments if you extend your repayment period, but you’ll pay more in interest. You don’t need good credit to qualify for consolidation, but you won’t get a lower interest rate. Instead, your new interest rate will be the weighted average of your current loans’ rates, rounded up to the nearest one-eighth of 1%.
With only a single monthly payment to remember, federal student loan consolidation can make managing your student loan debt easier without sacrificing access to federal repayment options and forgiveness programs, including Public Service Loan Forgiveness (PSLF).
Check Out: How To Consolidate Your Student Loans
FAQ
Who owns or services my old Bank of America student loan?
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Should I consolidate my old FFEL loans?
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Will refinancing my old Bank of America loans lower my interest rate?
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