Citizens Bank is a well-known lender of private student loans, making them a popular choice for many college students who need additional funds on top of federal student loans. But just because they are well-known doesn’t necessarily mean that they’re the right lender for everyone.
Here, we answer all of the most common questions that people have about Citizens Bank’s student loans so that you can make a more informed decision when deciding if they are the right lender for you.
Who is Citizens Bank?
Citizens Bank is a large regional bank headquartered in Rhode Island and operating in the Northeastern and Central United States. This includes states like Rhode Island, Connecticut, Delaware, Maine, Massachusetts, New Jersey, New Hampshire, New York, Ohio, Michigan, South Carolina, and Pennsylvania.
Citizens Bank is a lender of private student loans, among other financial products such as banking, credit cards, mortgages, personal loans, retirement accounts, and investment accounts.
Though a regional bank, Citizens Bank lends to borrowers throughout the nation, even in states where they do not operate local branches.
Citizens Bank History
The company was founded in 1828 as High Street Bank, which went on to establish Citizens Bank in 1871. In 1988, Citizens bank was acquired as a subsidiary of the Royal Bank of Scotland, at which point the business began to grow rapidly through a series of acquisitions. RBS slowly sold off its stake in Citizens Bank, and in 2015 the company became a fully independent bank, traded publicly on the stock market.
Types of Student Loans Offered by Citizens Bank
As an established player in the world of private student loans, Citizens Bank offers a range of loan types for borrowers to choose from. These include:
- Undergraduate Student Loans: For students seeking an undergraduate degree
- Graduate Student Loans: For students seeking a graduate degree
- Parent Student Loans: For parents who wish to help their child pay for college
In addition to standard graduate student loans, Citizens Bank offers a variety of loans tailored to borrowers who are pursuing a particular type of graduate degree, including:
- Law School Student Loans: For students pursuing their law degree
- Bar Study Loans: For students who need funds while they study for the Bar Exam
- MBA Student Loans: For students pursuing their MBA
- Health Professions Student Loans: For students attending medical or dental school
- Medical Residency Loans: For students who need funds while they complete their med school residency
In addition to newly originated student loans, Citizens Bank also offers student loan refinancing for both student borrowers and their parents.
Citizens Bank Interest Rates
Because Citizens Bank is a private lender, they are able to decide for themselves the interest rates that they will charge borrowers. This is in direct comparison to federal student loans, which charge an interest rate set by Congress.
The exact factors that Citizens Bank uses to determine the interest rates that they charge are not known, but common factors include:
- Your income: Whether or not you have a job, and how much you make, can be used to determine the interest rate on your student loan.
- Your credit score: Your credit score is a number designed to show a lender how risky you may be as a borrower. The higher your score, the less risky you are considered to be, and the lower your interest rates are likely to be. The lower your score, the more risky you are considered to be, and the higher your interest rates are likely to be.
- Cosigner status: If you apply for your student loan with a cosigner, you make yourself a less risky borrower (since the lender now has someone else to turn to for payment in the event that you can’t pay). This will very often increase your chances of being approved for a loan, and can help lower your interest rate as well.
Citizens Bank, like other lenders, often advertises their absolute lowest interest rates when trying to attract borrowers. While it’s possible to qualify for these low rates, it is very difficult to do so; they are typically reserved for borrowers with a very high credit score. Alternatively, the lowest interest rates are often tied to variable rate loans, which carry interest rates that change according to underlying market conditions.
How to Apply for a Student Loan Through Citizens Bank
To apply for a Citizens Bank student loan, all you need to do is navigate to their website, click on student loans, and then select the type of student loan you wish to apply for. Once you are on the correct page, you can click “Apply Now” to begin the application process. The website says that it should take only 15 minutes to complete.
In order to complete the application, you will need:
- Your personal information, including name, address, and contact information
- Your Social Security Number
- A pay stub (no more than 30 days old) or some other proof of income
- Your monthly housing cost, whether a rent or mortgage bill
- Information about your school, including your anticipated month and year of graduation
- The amount that you wish to borrow
After you have filled out the application, you can select “Get My Rate.” This will use the information that you’ve provided to determine a range of interest rates that you may qualify for. It does not include a hard credit check. In order to see a final interest rate offer, you will need to submit the full application, which will include a hard credit check.
If you are applying with a cosigner, they will also need to complete the application themselves.
Citizens Bank Pros and Cons
Pros of Borrowing a Student Loan from Citizens Bank
- No fees: Citizens Bank does not charge application, origination, disbursement, or prepayment fees.
- Up to 0.50% interest rate reductions: Borrowers can reduce their interest rate by 0.25% by signing up for auto pay, and an additional 0.25% if they or their cosigner have a qualified Citizens Bank account.
- Multi-year approval: Citizens Bank offers multi-year approval, which increases a borrower’s chances of being approved for multiple years of school.
- A variety of terms: Borrowers can choose from 5-, 10-, and 15- year terms.
- Cosigner release: Borrowers who applied for their loan with a cosigner can opt to release their cosigner from the loan after they have made 36 consecutive, on-time payments
Cons of Borrowing a Student Loan from Citizens Bank
- No guaranteed acceptance: Because Citizens Bank is a private lender, they are capable of determining their own eligibility requirements for borrowers. This means that whereas unsubsidized undergraduate federal student loans are made available to borrowers regardless of credit score or financial situation, there is no guaranteed acceptance with Citizens Bank. You may not be approved.
- Interest rates not set by law: Similarly, Citizens Bank sets its own interest rates, which can be much higher than the interest rates charged on federal student loans.
- Limited deferment options: Federal student loans come with rather generous deferment and forbearance options. Citizens Bank offers much more limited forbearance options for borrowers in certain circumstances.
- Not eligible for forgiveness: While federal student loans may be eligible for forgiveness if a borrower meets certain eligibility requirements, private student loans, including those offered by Citizens Bank, are typically not eligible for forgiveness.
How to Contact Citizens Bank
If you have questions about borrowing a student loan from Citizens Bank, you can call them at the number below to speak with a Student Lending Advisor. Hours of operation are Monday through Friday, 8am to 9pm Eastern Standard Time; Saturday, 8:30am to 5pm; and Sunday, 9am to 2pm.
Alternatives to Citizens Bank
Regardless of which private lender you are considering, we typically recommend that all borrowers first start by accepting federal student loans, state-based student loans, and institutional student loans before turning to private loans. This is because these loans carry lower interest rates and more generous terms than private loans do.
If you have exhausted those sources of funding and still need funds, and decide that private loans are the right choice for you, then it’s important that you do your homework and find the loan with the lowest interest rate and most beneficial terms—before you submit an application.
The best way to do this, in my opinion, is by turning to a student loan marketplace that will allow you to compare multiple lenders side by side to choose the one that is best suited to your needs.