Sparrow Student Loan Refinance Review

Our Rating: C+ ⓘ (Compare)

Sparrow launched in 2020, making it one of the newest fintechs to offer student loan refinancing. Sparrow bills itself as “the Expedia of student loans”; this online marketplace platform allows applicants to prequalify with multiple refinance lenders and compare rates under various conditions, such as with and without a co-signer(s).

*Lowest rates may include a standard rate reduction for enrolling in auto-pay.

Skip to: Rates & Fees | Eligibility Requirements | Repayment Options | Consumer Reviews & Complaints | FAQ

Sparrow Refinance Rates & Fees

Sparrow’s marketplace lender partners offer fixed or variable rates; the lowest rates may include a standard rate reduction for enrolling in auto-pay.

Additional information about Sparrow refinance rates:

• Checking your rate with Sparrow will not affect your credit score. They will conduct a soft, not hard, credit inquiry (learn the difference).
• Some Sparrow lender partners offer a discount for setting up auto-pay, typically a 0.25% interest rate reduction.
• Variable rates may be based on any one of multiple interest rate indices, including the SOFR and Prime Rate.
• The highest disclosed variable rate cap is 25.00%; some lenders cap their variable rates as low as 9.90%.

Sparrow refinance rates recent history:

Over a two-year period (2022-2024), Sparrow’s disclosed limits for its lowest and highest available student refinance APRs increased by an average of 54.8%.

In 2023, the lowest available fixed rate declined 69.2%% (from 3.25% APR) while the highest fixed rate increased 17.4% (from 11.03% APR). The lowest starting variable rate increased 63.0% (from 3.24% APR) while the highest starting variable rate increased 11.4% (from 13.01% APR).

In 2022, Sparrow’s lowest and highest available fixed rates increased 51.2% and 0.4%, respectively. Its lowest and highest available fixed rates increased 86.2% and 35.7%, respectively.

Additional Fees

Beyond interest rates, there are a number of fees a refinance lender may charge up-front or during the loan servicing period. Sparrow charges no fees; below is a list of fees that Sparrow’s lender partners do or do not charge.

1. Application fee – fee to apply for rates & approval.
2. Loan origination fee – fee to create the new loan.
3. Disbursement fee – fee for distributing funds to lenders to pay off loans that have been refinanced.
4. Prepayment penalty – fee for making extra payments to reduce a refinance loan balance or pay it off early.
5. Late payment fee – fee for making a late payment.
6. Returned payment fee – fee for failed payments due to insufficient funds, also known as a “bounced check”.
7. Collection fee – fee for collection activity on a defaulted debt.

Current Promotions & Offers

Sparrow has plans to launch a Learn and Earn program. To benefit from this program, borrowers must use the Sparrow app to access personal finance courses and take quizzes based on each lesson. Correct quiz answers earn points or “eggs” that borrowers can redeem for cash-equivalent items, such as gift cards or loan payments. Borrowers are currently able to sign up to join the program waitlist.

Sparrow’s refinance lender partners may also offer a standard 0.25% interest rate reduction for enrolling in automatic payments.

Sparrow Refinance Eligibility Requirements

To qualify for refinancing with Sparrow, all borrowers must meet the criteria below.

• Citizenship Requirement: varies by lender; some lenders serve international students.
• Income Requirement: varies by lender; most lenders have a minimum income (usually $24,000) or a debt-to-income ratio requirement.
• Credit Score Requirement: varies by lender; disclosed minimum scores range from 650 to 700.
• Graduation Requirement: varies by lender; at least one refinance lender does not require a degree.
• Location Requirement: varies by lender; at least one lender works with international borrowers.

Additional restrictions apply for specific individuals and loans.

• Some lenders have special requirements to approve larger amounts for refinancing.
• Some lenders may waive certain requirements if the borrower applies with a co-signer or co-borrower.

Sparrow Student Loan Repayment Options

Lenders vary greatly on the benefits and options provided to borrowers during the loan servicing period. Additionally, benefits may only be available on a case-by-case basis. Sparrow offers some relief options.

Deferment & Forbearance

Sparrow does not originate or services loans. Any deferment or forbearance options will be at the discretion of the direct lender or loan servicer. Most of Sparrow’s partners offer debt relief under certain circumstances, often in the form of deferment or forbearance.

Additional Options

Sparrow’s direct lender partners may offer other opportunities for relief or contract modification.

• Co-signer release is an option with most of Sparrow’s refinance lender partners; refer to each direct lender’s policy.
• Death / disability discharge is available from Sparrow’s refinance lender partners in the unfortunate circumstance that a borrower passes away or suffers total permanent disability.

Sparrow Reviews, Complaints & Lawsuits

Beyond our own findings, our team also collected the most genuinely insightful customer experiences we could find, including any instances of legal action against the company in which the details became public.

Sparrow Online Reviews

Few Sparrow customer reviews are available on public forums. The ones we found were invited, meaning the company specifically asked the customer to review their experience.

See these customer reviews of Sparrow at TrustPilot.com (4.0 out of 5). Note that these reviews are unverified, may include inaccuracies, and may provide outdated information (about rates, bonus offers, etc.).

Sparrow CFPB Complaints

As consumer finance companies, student loan refinancing lenders fall under the jurisdiction of the Consumer Financial Protection Bureau (CFPB), a federal agency. As part of their mission, the CFPB allows consumers to log official complaints. These complaints are publicly available on the CFPB official website.

Sparrow Lending PBC (Sparrow) does not apear in the CFPB’s Consumer Complaint Database. This is not surprising considering the company was not founded until 2020.

To search for Sparrow in the CFPB’s Consumer Complaint Database, click here.

Sparrow Lawsuits

Sparrow has not been named in any lawsuits since its launch. Note that while this information is updated regularly, ongoing legal action is subject to change.

Frequently Asked Questions

These are the most common questions consumers have about student loan refinancing with Sparrow.

• Is Sparrow good for refinancing student loans?
  Sparrow does not refinance student loans but is a good marketplace option for borrowers who want to compare rates and terms from multiple refinance lenders.

• Does Sparrow require a minimum credit score to qualify for student loan refinancing?
  Many of Sparrow’s marketplace lenders do have minimum credit score requirements; 650 is the lowest allowable score disclosed. Sparrow, however, does not impose its own minimum credit score to refinance student loans.

• Are Sparrow loans federal?
  Sparrow does not originate loans. Furthermore, Sparrow has no affiliation with the federal government or the U.S. Department of Education.

• Does Sparrow charge a prepayment penalty?
  None of Sparrow’s lender partners charge penalties for early payments or repaying a loan in full before its term is over.

• Does checking your rates with Sparrow hurt your credit score?
  For its prequalification process, Sparrow performs a soft credit check, which will not hurt your credit score. If you proceed with an application, however, Sparrow will perform a hard credit check that may affect your credit score.

• Is Sparrow a bank?
  No, Sparrow is not a bank nor is it affiliated with any bank. Sparrow is an online marketplace platform that allows applicants to prequalify with multiple refinance lenders through one application.

• Can I refinance a Sparrow loan?
  Sparrow does not originate loans. Typically, however, there is no limit to the number of times a borrower may refinance direct lenders. Note, however, that every new line of credit requires a hard credit check that may affect your FICO score.

• Can I refinance just some of my loans with Sparrow?
  Yes, you can refinance some, all, or just one of your qualifying student loans with Sparrow. You may choose to refinance your private loans only or refinance private and federal loans together.

• Can I refinance loans that have already been refinanced?
  Yes, you can refinance loans as many times as you want with Sparrow. Note that each time you refinance, you will have to submit a new application; every application requires a hard credit check that may affect your credit score.

• Can my spouse and I refinance our loans together with Sparrow?
  Policies vary from lender to lender, but at least one Sparrow refinance lender partner does appear to allow spouses to combine debt.

• How long does it take to refinance with Sparrow?
  Sparrow claims a two-minute application process to prequalify. The remaining timeline is up to each individual lender.

• Who services Sparrow refinance loans?
  Sparrow does not originate loans.

• Does Sparrow offer a grace period?
  Sparrow does not offer a grace period but some of its lender partners may.

• Can I get any special rates or discounts with Sparrow?
  Sparrow does not currently offer any special rates or discounts, but some of its refinance lender partners do. Sparrow also plans to launch a Learn and Earn program in the future.

• What happens if I file for bankruptcy?
  Sparrow does not originate or service loans, so it would not be involved in any bankruptcy proceedings. Generally, bankruptcy does not discharge student loan debt.

• Does Sparrow partner with any major student refinance lender marketplaces?
  Sparrow advertises LendKey and INvestEd as partners in its marketplace.

Compare Student Loan Refinance Reviews

Sources

1. Sparrow, Student Loan Refi
2. Sparrow, FAQ