Have you ever scored a free ride on a ride-sharing app or earned a recruiting bonus from an employer? Then you’re already familiar with refer-a-friend promotions. But you might be surprised to learn that student loan referral programs could earn you money.
Most student loan referral programs operate on a simple premise: If your friend uses your code to apply for or refinance a loan — and it’s approved — you may get money. These referral bonuses can help you with your own monthly loan payments.
But not all student loan referral programs are equal.
What to look for in a student loan referral program
Unlike programs you might be familiar with in other industries, student loan referral programs won’t typically require you to be a borrower to recommend a lender and reap the reward.
The key differences among referral programs are the size of the rewards and how fast you can get them. But what makes them similar are their eligibility requirements. Most programs require the following terms:
- The person you refer can’t have an existing account with the lender
- You can receive only one bonus per referral
- Your referral’s loan must be refinanced or approved before you earn a bonus
Most programs allow you to send out as many referrals as you wish. But be sure to read the rules of the referral programs. Keep in mind, too, that you won’t be updated on the progress of your referrals’ loan applications to ensure the privacy of the applicant.
5 student loan referral programs
Here are five lenders that offer a student loan referral program, as well as details of each.
The SoFi referral program is unique in a few ways. First, you can get rewarded for referring someone who is interested in refinancing a student loan or parent PLUS loan, or someone who is considering taking out a personal loan.
Download the SoFi app to get the customized link that you and your referrals will need to collect the cash bonuses. SoFi’s referral program awards $300 to you and $100 to your pal.
Once your referral’s new loan has been approved, you’ll each receive the money in your bank account via Automated Clearing House (ACH) within 30 days. All U.S. residents — except those living in Vermont — are eligible. You’re capped at $10,000 in referral bonuses per calendar year.
Private student loans are ineligible.
2. Laurel Road
One nice benefit of the Laurel Road referral program is you don’t have to be a customer to participate. Create a Laurel Road account to get your referral link and track your referrals’ statuses as they refinance or consolidate their loans.
Laurel Road offers a combined total of up to $400 to every referrer and referred borrower. You can share your funds with the person you referred via the lender’s sliding scale. Unlike SoFi, there is no limit to how much you can earn.
Enter an email address on the CommonBond sign-up page to get your referral link.
CommonBond pays $200 via PayPal within one to three weeks for each new or refinanced loan that originated with your referral. If you don’t have a PayPal account, CommonBond will create one for you based on the email you provide.
You don’t need to be a CommonBond member to participate in the referral program, and there is no limit to how many friends you can refer.
Each time someone takes out a loan with CommonBond, the lender funds the education of a child in a developing country.
You need to enter your name and email address to get started — and that’s it. The bonus arrives via PayPal within four weeks of each loan’s approval or disbursement. There are no limits to how many friends you can refer.
5. Education Loan Finance
Like the LendKey referral program, the Education Loan Finance program is doubly rewarding. It offers $400 for successful referrals, and your friend would score a $100 credit when refinancing a loan within 90 days of registering. A second $100 Education Loan Finance Fast Track Bonus is awarded to new customers whose loans are approved within 30 days of their initial application.
Registration is simple. But there is one unique qualifier: A friend or family member must refinance a minimum of $15,000 for you both to be eligible for the cash bonuses.
There are no limits to how many referral bonuses you can earn.
How to use your bonus from a loan referral program
If you’re a borrower and are awarded $200 or $400 for helping a friend refinance their loans, there are ways to handle this influx in income.
There’s not one correct way for everyone, but making a larger-than-usual monthly payment on your student loan can help immensely. If that’s your plan, don’t let the bonus get lost in your bank account. Make an extra student loan payment as soon as you receive the bonus to remove the temptation of spending it elsewhere.
Of course, you can also apply the cash to other routine expenses. Perhaps you use it to pay your rent or mortgage, internet bill or maybe even the next few grocery bills.
You might not receive the full bonus as advertised, either — it might be taxable income. For example, SoFi notes that bonuses are considered miscellaneous income and may be reportable to the IRS under Form 1099-MISC. CommonBond states it will send a 1099-MISC form to use when filing your taxes if six or more of your referrals result in new loans.
If you’ve ever been burdened by student loans, you can appreciate how impactful a good referral can be.
Laura Woods contributed to this report.