NEW YORK ( MainStreet) — RBS Citizens Financial Group last week unveiled its student loan refinance options--the Citizens Bank Education Refinance Loan and Charter One Education Refinance Loan. These products are designed to simplify the repayment of private student loans by allowing borrowers refinance or consolidate them at lower rates with flexible payment terms.

"Private student loan borrowers have historically had a limited number of refinancing options available," said Brendan Coughlin, head of education and auto finance for RBS Citizens Financial Group. "After graduation, many students successfully build their credit and are off to a promising start to their career. They deserve more flexibility regarding their student loans."

"Our new Education Refinance Loan offers qualified borrowers an option to change the terms of their loans to better meet their current life situation," he added. Customers that authorize the bank to automatically deduct their payments from their bank accounts receive an additional 0.25% discount.

"Education Refinance loan is an underwritten loan and credit scores are one of the major factors we look at," Coughlin said. "Along with a strong credit score, we also consider the borrower's salary, when they graduated and how long they have been successfully paying back their current student loans. While not required, having a co-signer can help, especially for recent graduates just entering their first job."

The re-fi vehicles come with no pre-payment penalties. Other potential benefits include a single monthly private student loan payment, refinancing a variable rate into a fixed interest rate loan and possibly lowering the interest rate and/or lowering the borrower's monthly payment. The best rates are 2.82%.

Since the 2008 credit freeze, private, non-bank lenders have been frozen out of the student loan market.

"Most private consolidation loans in the past have been made by non-bank lenders," noted Mark Kantrowitz, Las Vegas-based senior vice president and publisher of Edvisors Network, a provider of intelligence on student loans. "But the capital markets are still frozen, so few non-bank financial institutions are able to make new private students, whether consolidations or other types."

"Banks usually entered the market as a defensive posture," said Kantrowitz, to keep other lenders from poaching customers with cheaper consolidation loans. "There's also a lot of risk in consolidation, since many borrowers struggling with their loans think that consolidation will solve their problems." With its use of credit scores and borrower income as qualifying standards, RBS clearly covets the borrower.

There are no application, origination or disbursement fees, and refinancing is available with either a fixed or variable rate, RBS's Coughlin said. Borrowers and co-signers with a prior TruFit Student Loan or qualifying Citizens Bank or Charter One account receive a 0.25 percent interest rate reduction on their re-fi loan.

RBS offers resources to aid borrowers in making the decision of whether refinancing is right for them, including decision-making guides and loan estimators from Citizens Bank and decision-making guides and loan estimators from Charter One.