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Best Student Loan Refinance Lenders Of March 2024

Mortgages and Student Loans Deputy Editor
Lead Editor, Mortgages & Loans

Reviewed

Updated: Mar 20, 2024, 11:01am

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Student loan refinancing can mean big savings in the right circumstances. Here’s how it works: A new private company—typically a bank, credit union or online lender—pays off the student loans you choose to refinance, and you’ll get a new loan with a new interest rate.

Below we’ve identified the best student loan refinance lenders for those who qualify, based on features including interest rates, availability to borrowers and hardship repayment options. None of the lenders on our list charge origination or prepayment fees, though some charge late fees. In some cases, they offer a separate refinancing product for parent loan borrowers; we scored each based on their student loan refinancing option only.

Related: Compare Personalized Student Loan Refinance Rates

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Why you can trust Forbes Advisor

Why you can trust Forbes Advisor: Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the loans methodology for the ratings below.

  • 16 lenders researched
  • 15 data points evaluated
  • 6 categories scored

Best Student Loan Refinance Lenders Of March 2024

Rhode Island Student Loan Authority

4.5

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

N/A

Fixed APR

6.34% to 8.54%

Compare Rates Arrow

Via Credible.com’s Website

N/A

6.34% to 8.54%

Why We Picked It

Rhode Island Student Loan Authority, or RISLA, is a Rhode Island-based nonprofit that refinances loans for customers across the country. It stands apart for its income-based repayment program, which limits payments to 15% of income for a 25-year period if borrowers can’t afford their payments. That’s an extremely rare perk in the student loan refinance market, as is its 24-month forbearance period. RISLA did not receive a perfect score because it doesn’t provide a co-signer release policy and it charges late fees.

RISLA only offers fixed interest rates.

Pros & Cons
  • Low interest rates
  • Income-based repayment plan available
  • Nurses pay 0% interest for 48 months following graduation
  • No options for international students

Details

Loan terms: 5, 10 and 15 years

Loan amounts available: $1,500 to $45,000 per year ($150,000 aggregate per borrower).

Eligibility: Applicants must show a minimum income of $40,000 per year and a minimum credit score of 680. Most undergraduate students will need a co-signer to qualify.

Forbearance options: Forbearance available for up to 24 months.

Co-signer release policy: Available after 24 months of payments. Periods during which borrowers use income-based repayment do not qualify.

SoFi®

3.5

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

6.24% to 9.99%*

with autopay

Fixed APR

5.24% to 9.99%*

with autopay

Learn More Arrow

Via SoFi’s Website

6.24% to 9.99%*

with autopay

5.24% to 9.99%*

with autopay

Why We Picked It

SoFi allows borrowers with an associate’s degree to refinance, which opens up eligibility to a wider range of applicants. (We believe the ability to refinance without a bachelor’s degree is an important feature of a refinance loan; seven of the 10 lenders on our list offer it.) Also, it’s one of four lenders on our list that does not place a limit on the amount you can refinance. It’s possible to refinance up to the total balance of your loans, which is helpful for those with a lot of debt from professional degrees.

SoFi’s rates aren’t as low as some other lenders’, and it doesn’t offer co-signer release, which is unusual among our top picks. But as a SoFi customer, you’ll get access to benefits like a 0.125% interest rate discount on certain additional SoFi products, such as personal loans.

Pros & Cons
  • Interest rate estimate available without undergoing a hard credit check.
  • Borrowers can refinance with an associate’s degree.
  • Access to SoFi member benefits.
  • No co-signer release available.
  • Charges late fees.
  • Maximum loan term is longer than 15 years.

Details

Loan terms: 5, 7, 10, 15 and 20 years.

Loan amounts available: $5,000 up to total balance of eligible loans.

Eligibility: Associate’s or bachelor’s degree required. Minimum credit score of 650. Does not disclose income requirements.

Forbearance options: A forbearance program is available for borrowers experiencing other types of economic hardship, such as medical expenses. Borrowers can take up to 12 months total forbearance.

Co-signer release policy: Available after 24 payments.

*Disclosure

*Fixed rates range from 5.24% APR to 9.99% APR with 0.25% autopay discount. Variable rates range from 6.24% APR to 9.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 13.95% APR; 15- and 20- year terms are capped at 13.95% APR. SoFi rate ranges are current as of 02/06/24 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. You may pay more interest over the life of the loan if you refinance with an extended term.

MEFA

3.5

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

N/A

Fixed APR

6.20% to 8.99%

Compare Rates Arrow

Via Credible.com’s Website

N/A

6.20% to 8.99%

Why We Picked It

The Massachusetts Educational Financing Authority, known as MEFA, is a nonprofit, state-based agency that offers student loan refinancing to customers across the country. It does not require borrowers to have a degree, so those who did not graduate can refinance. It also doesn’t charge fees, including late fees.

While MEFA does not advertise a specific forbearance limit, the agency says it will work with borrowers to modify their payment plans if necessary due to financial hardship. Since the fixed and variable rates offered are currently the same, your best bet is to pick a fixed-rate loan so you know it won’t increase in the future.

Pros & Cons
  • Interest rate estimate available without undergoing a hard credit check
  • No late fees
  • Borrowers can refinance without a degree
  • Shortest loan term is 7 years
  • No co-signer release available

Details

Loan terms: 7, 10 and 15 years

Loan amounts available: $1,500 up to school’s certified cost of attendance less aid.

Eligibility: No degree required. Minimum FICO score of 670 and minimum income of $24,000 for each loan applicant.

Forbearance options: No specific policy except in the case of natural disasters or other extenuating circumstances. Loan modification program available on a case-by-case basis to borrowers who need long-term help.

Co-signer release policy: None

Citizens Bank

3.5

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

7.02% to 12.41%

Fixed APR

6.49% to 10.98%

Compare Rates Arrow

Via Credible.com’s Website

7.02% to 12.41%

6.49% to 10.98%

Why We Picked It

Citizens Bank is one of a few lenders that doesn’t require borrowers to have graduated in order to refinance. It also offers co-signer release after 36 loan payments.

The high end of Citizens Bank student loan refinancing rates is quite high compared with other lenders on our list. But borrowers can qualify for an interest rate discount of up to 0.50% if they have an existing account with the bank. (Refinancing is available nationwide, but checking and savings accounts are only available in Connecticut, Delaware, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont.)

Pros & Cons
  • Interest rate estimate available without undergoing a hard credit check
  • No degree required
  • Up to 0.50% interest rate discount available for existing Citizens Bank customer
  • No forbearance limit disclosed
  • Maximum loan term is longer than 15 years

Details

Loan terms: 5, 7, 10, 15 and 20 years

Loan amounts available: $10,000 to $300,000 (for those with a bachelor’s degrees or less) or $500,000 (for those with a graduate degree)

Eligibility: No degree required. Borrowers with no degree or an associate’s degree must show that they have made 12 on-time payments after leaving school in order to refinance. Minimum income $24,000 for borrower and co-signer combined.

Forbearance options: Three months of forbearance available at a time up to an undisclosed limit. Borrowers experiencing a long-term financial hardship can participate in a loan modification program for up to 12 months.

Co-signer release policy: Available after 36 on-time payments

Laurel Road

Laurel Road
3.0

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

4.97% to 10.59%

Fixed APR

4.92% to 10.39%

Laurel Road

4.97% to 10.59%

4.92% to 10.39%

Why We Picked It

Laurel Road, an online-only lender acquired by KeyBank in 2019, offers some perks specific to borrowers who work in health care.

Graduate students and those pursuing bachelor’s degrees in health professions (and, if pursuing an associate’s degree, those in certain health care specialties) can refinance as early as their final semester of school if they have an employment offer. Undergraduates in other fields can refinance after 12 months of employment.

Borrowers also can release their co-signers after 36 monthly payments, and graduates can refinance federal PLUS loans in their own names that their parents took out.

Pros & Cons
  • Borrowers in certain fields can refinance with an associate’s degree
  • Some borrowers can refinance during their final semester of school
  • Interest rate estimate available without undergoing a hard credit check
  • Charges late fees
  • No deferment option if borrowers go back to school
  • Maximum loan term is longer than 15 years

Details

Loan terms: 5, 7, 10, 15 and 20 years

Loan amounts available: $5,000 minimum; no maximum, except for associate’s degree graduates, who can refinance up to $50,000.

Eligibility: Must have a degree from an eligible institution. Associate’s degree graduates can refinance if they work in certain health care fields. Laurel Road does not disclose credit score or income requirements.

Forbearance options: Up to 12 months of forbearance available, in three-month increments

Co-signer release policy: After 36 consecutive, on-time payments

Earnest

3.0

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

5.99% to 9.74%²

including 0.25% autopay discount³

Fixed APR

5.19% to 9.74%²

including 0.25% autopay discount³

Compare Rates Arrow

Via Earnest’s Website

5.99% to 9.74%²

including 0.25% autopay discount³

5.19% to 9.74%²

including 0.25% autopay discount³

Why We Picked It

Earnest offers several unique features, including the option to make automatic payments twice a month to accelerate repayment and the choice of any repayment term between five and 20 years⁴. It also offers a solid range of hardship repayment options beyond the standard 12 months of forbearance, such as the ability to skip⁵ one monthly bill every year.

Borrowers are able to apply with a co-signer if they don’t qualify for a refinance loan on their own. Earnest reports delinquency to the credit bureaus after the third missed payment cycle.

Pros & Cons
  • Borrowers with an associate’s degree can refinance
  • Wide variety of repayment terms and allows the ability to customize loan terms
  • No late fees
  • Requires minimum credit score of 680 without a co-signer. Co-signers require a credit score of 650.
  • Undergrad borrowers must be enrolled at least half-time
  • Not available in Nevada

Details

Loan terms: Choose any term between five and 20 years³. Your options may depend on your financial profile.

Loan amounts available: $5,000 ($10,000 for California residents) to $500,000.

Eligibility: Borrowers must have completed a degree at an eligible nonprofit school and have a minimum credit score of 650. They must also meet other criteria, including having savings of at least two months’ worth of expenses, on-time payment history and no bankruptcies.

Forbearance options: Up to 12 months of forbearance available (after making three consecutive, timely payments toward the loan). Counted towards the forbearance limit, borrowers can also skip one payment every 12 months⁵ (after making six consecutive, timely payments) and get an interest rate and/or term modification in the event of long-term financial hardship.

Co-signer release policy: None

Disclosures

¹Terms and conditions apply. To qualify for this Earnest Bonus offer: 1) you must not currently be an Earnest client, or have received the bonus in the past, 2) you must submit a completed student loan refinancing application through the designated Forbes Advisor link; 3) you must provide a valid email address and a valid checking account number during the application process; and 4) your loan must be fully disbursed.

²Student Loan Refinance Interest Rate Disclosure:Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.44% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Variable rates range from 6.24% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

³Auto Pay Disclosure: You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.

⁴Student Loan Refinance Loan Cost Examples: These examples provide estimates based on payments beginning immediately upon loan disbursement. Variable APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 5.89% APR would result in a total estimated payment amount of $17,042.39. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 20-year term (240 monthly payments of $72) and a 6.04% APR would result in a total estimated payment amount of $17,249.77. Your actual repayment terms may vary.

⁵Skip A Payment Disclosure: Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.

Loan Eligibility Criteria: Your debt is from paying for education at a Title IV accredited school. The debt is from your education or your child’s. The debt you’re refinancing is for a completed degree or one that will be completed at the end of this semester. You are currently the primary borrower on the student loans you would like to refinance, and you will remain the primary borrower after refinancing. You must reside in the District of Columbia or one of the 47 states Earnest Operations LLC is authorized to lend in (all but Delaware, Kentucky, and Nevada). This is strictly a student loan refinance product. There is no opportunity to borrow more than your outstanding qualifying student loan amount. You must be the age of majority in your state or older at the time you apply, as well as be a United States citizen or Permanent Resident Alien without conditions. Refinancing is subject to credit qualifications. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX.

You may lose benefits associated with your underlying federal and/or private loans if you refinance such as federal Income-driven Repayment Plans, Economic Hardship Deferment, Public Service Loan Forgiveness, or other deferment and forbearance options. If you file for bankruptcy, you may still be required to pay back this loan.

Lender Identification: Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. or FinWise Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit www.earnest.com/licenses for a full list of licensed states. For California residents: Loans will be arranged or made pursuant to a California Financing Law License. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107.

Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank, FinWise Bank, and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.

nmlsconsumeraccess.org

© 2024 Earnest LLC. All rights reserved.

PNC Bank

3.0

Our ratings take into account hardship options, the application process, interest rates and fees. All ratings are determined solely by our editorial team.

Variable APR

7.89% to 14.99%

Fixed APR

6.99% to 13.94%

Learn More Arrow

Read Our Full Review

7.89% to 14.99%

6.99% to 13.94%

Why We Picked It

PNC Bank offers a particularly generous interest rate discount of 0.50% to borrowers who make monthly payments automatically from a bank account. It also doesn’t require refinance borrowers to have a degree, but you must have made at least 24 months’ worth of payments toward existing student loans to qualify. You must also show two years of income history.

PNC Bank allows co-signers to come off the loan after 48 months of payments, which is longer than what other lenders that provide co-signer release offer.

Pros & Cons
  • Interest rate discount of 0.50% for automatic payments
  • No degree required
  • No interest rate estimate available without hard inquiry
  • Co-signer release available after a longer time period than other lenders provide

Details

Loan terms: 5, 10 and 15 years

Loan amounts available: $10,000 to $75,000

Eligibility: Two years of income and employment history required. PNC Bank does not disclose minimum credit score or income requirements.

Forbearance options: Up to 12 months of forbearance available, in two-month increments. Borrowers must make full payments for at least 12 months between forbearance periods.

Co-signer release policy: Available after 48 months of consecutive, on-time payments

Summary: Best Student Loan Refinance Lenders Of 2024

Company Forbes Advisor Rating Variable APR Fixed APR Learn More
Rhode Island Student Loan Authority 4.5 4.5-removebg-preview N/A 6.34% to 8.54% Compare Rates Via Credible.com's Website
SoFi® 3.5 3.5 6.24% to 9.99%*
with autopay
5.24% to 9.99%*
with autopay
Learn More Via SoFi’s Website
MEFA 3.5 3.5 N/A 6.20% to 8.99% Compare Rates Via Credible.com's Website
Citizens Bank Citins Bank Student Loans Review 2022 3.5 3-stars 7.02% to 12.41% 6.49% to 10.98% Compare Rates Via Credible.com's Website
Laurel Road 3.0 3-stars 4.97% to 10.59% 4.92% to 10.39%
Earnest 3.0 3-stars 5.99% to 9.74%² 5.19% to 9.74%² Compare Rates Via Earnest's Website
PNC Bank 3.0 3-stars 7.89% to 14.99%  6.99% to 13.94% Learn More Read Forbes Review

Tips for Comparing Student Loan Refinance Lenders

Since the goal of refinancing is to save money on interest, you’ll likely want to choose the lender that offers you the lowest rate you qualify for. Variable rates tend to be lower than fixed rates, but they could go up in the future; only opt for a variable rate if you plan to pay off your loan quickly.

Similar to private student loans for those attending school, refinance loans aren’t required to offer the same consumer protections that federal loans do, such as income-driven repayment plans or forgiveness. But some refinance lenders provide more than the standard 12 months of forbearance throughout the loan term, and/or additional loan modification options for borrowers having difficulty making payments.

Refinancing is typically best for those with strong incomes and job stability. But life is unpredictable. If you think you might need to take a pause from payments or to lower your monthly bill, consider choosing a lender with a more generous forbearance policy.

Also, if you choose to refinance with the help of a co-signer, go with a lender that offers a co-signer release policy so you can take on the full repayment obligation when possible. That will protect your co-signer’s credit from the negative marks that could occur if you fall behind on payments.

Methodology

We requested data from 16 lenders that dominate the student loan refinance market and scored them across 15 data points in the categories of interest rates, fees, loan terms, hardship options, application process and eligibility. We chose the 10 best to display based on those earning three stars or higher.

The following is the weighting assigned to each category:

  • Hardship options: 30%
  • Eligibility: 18%
  • Loan terms: 18%
  • Application process: 16%
  • Interest rates: 13%
  • Fees: 5%

Specific characteristics taken into consideration within each category included number of months of forbearance available, hardship repayment options beyond traditional forbearance, availability of in-school deferment, accessibility to borrowers without a bachelor’s degree, time to default, disclosure of credit score and income requirements and other factors.

Lenders who offered interest rates below 7% scored the highest, as did those who offered more than the standard 12 months of forbearance, who offered interest rate discounts beyond the standard 0.25% for automatic payments, who charged no late fees and who offered multiple loan terms maxing out at 15 years. We believe that to take full advantage of refinancing, borrowers should choose the shortest loan term available, and a 20-year term has the potential to limit interest savings.

In some cases, lenders were awarded partial points, and a maximum of 3% of the final score was left to editorial discretion based on the quality of consumer-friendly features offered.

To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.

What Is Student Loan Refinancing?

Student loan refinancing lets you combine multiple loans into one, thereby simplifying repayment. You’ll work with a private lender that pays off your old student loans and issues a new one in their place. There’s typically no fee to refinance student loans, but you’ll need to meet the lender’s requirements for credit and income.

If you have strong credit (or can apply with a creditworthy co-signer), you could potentially qualify for a lower interest rate than you have now. Reducing your interest rate can lower your monthly payment and save you money over the life of your loan.

When you refinance, you can also choose new repayment terms, often between five and 20 years. A shorter term can help you get out of debt faster and save on interest, while a longer term could give you more affordable monthly benefits but comes with more interest charges over time.

Keep in mind, though, that refinancing federal loans turns them private, meaning those loans will no longer be eligible for federal repayment plans, forgiveness programs or other benefits.

How Does Refinancing Student Loans Work?

When you refinance student loans, you take out a new loan with a different lender to pay off your existing student debt. Your new loan will have a new interest rate and repayment term, which means you could pay less in interest or lower your monthly payments. Refinancing is also a useful way to combine multiple student loans into one debt, which can make it easier to manage repayment.

Refinancing is only done through a private lender. That means that if you refinance your federal student loans, they will become private debt and you will lose access to federal benefits like income-driven repayment, loan forgiveness programs and more flexible deferment and forbearance options.

If you want to keep your federal student loan benefits, refinancing isn’t a good option. Instead, you can consolidate your federal loans into one payment with a direct consolidation loan. This averages all your student loan interest rates and rounds up to the nearest one-eighth percent. Your new repayment period can be as long as 30 years but you retain all your federal benefits.

If you don’t mind losing your federal benefits or only have private student loans, refinancing might work better for you. You can use a student loan refinance calculator to determine how refinancing can help you save money or lower payments.

Student Loan Refinance Requirements

Eligibility requirements for student loan refinancing vary by lender, but borrowers generally must meet the following criteria:

  • Good to excellent credit. Lenders typically require borrowers to have good to excellent credit, meaning a credit score of 670 or higher.
  • Steady income. You’ll need to meet the lender’s income and employment requirements. For example, the lender may require you to be employed full-time and have a salary of at least $35,000 per year.
  • Minimum loan balance. Most lenders require a minimum outstanding loan balance to qualify for refinancing. The minimum varies by lender, but it’s usually between $5,000 and $10,000.

If you don’t meet those requirements, you could still qualify for a private student loan if you add a creditworthy co-signer to your loan application.

Pros and Cons of Refinancing Student Loans

Student loan refinancing can be an excellent way to manage your debt, but it’s important to weigh your options and research the pros and cons carefully.

Pros of Refinancing Student Loans

  • You could save money. If you refinance your loans and qualify for a lower interest rate, you could save hundreds or even thousands over your loan term.
  • Simplify payments. Most borrowers take out several loans to pay for their college education, and keeping track of the different loans and payments can be stressful. When you refinance your loans, you can combine them into one loan and have just one account to manage and an easy-to-remember payment due date.
  • Pay off your loans faster. With a lower interest rate, more of your payments will go toward the loan’s principal rather than interest. If you make additional payments, you could pay off your loans much faster.
Pro Tip

Refinancing student loans can help you handle administrative tasks, like removing a co-signer from your loan if your lender doesn’t offer co-signer release. Some lenders may also let parent borrowers refinance parent PLUS loans under the student’s name so they can assume responsibility for payments. Experts advise comparing rates and loan features to find the best refinance option for your needs.

Cons of Refinancing Student Loans

  • Lose federal loan benefits. If you refinance federal student loans, you will transfer them to a private lender. They’ll no longer qualify for federal benefits like income-driven repayment, Public Service Loan Forgiveness or federal forbearance programs.
  • Not everyone qualifies for a lower rate. Refinancing companies have strict eligibility requirements and depending on your existing loans, you may be not eligible for a lower rate than you have now.
  • You may need a co-signer. Because the eligibility requirements are stringent, you may need a co-signer to qualify for a loan. Co-signing a refinancing loan is a major commitment since student loans can be in repayment for 10 to 20 years.

Should I Refinance My Student Loans?

The three items to consider when deciding whether to refinance are financial history, interest rates and repayment needs.

First, identify whether you qualify. Most student refinance lenders require a minimum credit score of 650. You’ll also generally need to show stable income, a low debt-to-income (DTI) ratio and a history of on-time debt payments.

Eligible to refinance? Now look at your current loans’ interest rates. If they’re significantly higher than the rate you’ll likely get when you refinance—which you can check using lenders’ prequalification tools on their websites—refinancing might make sense for you.

But remember, if you refinance federal student loans, you’ll lose access to federal programs such as flexible forbearance, income-based repayment and Public Service Loan Forgiveness (PSLF). If you rely on these programs (or think you might in the future), think twice before refinancing.

You should consider student loan refinancing if you have a good or excellent credit score and stable income (or a co-signer who does) and your current loans have high enough interest rates that you’ll benefit from a lower rate. In some cases, you can even refinance federal parent PLUS loans from your parents and put them in your name, relieving them of payment responsibility.

How to Refinance Student Loans

If refinancing makes sense for your situation, you can start the process immediately. Here’s how to refinance your loans:

1. Shop around before you apply. Most refinancing lenders allow you to prequalify for a loan. To do so, you’ll enter a few personal details and the lender will complete a soft credit check—which has no impact on your credit score—before showing your estimated fixed and variable interest rates for your desired loan. Do this with several lenders to see who might offer the best deals.

2. Submit an application. Once you’ve decided which lender you want to work with, submit a formal application. This is a more in-depth form, and you may need to include extra documentation about your income and other details. The lender will then do a hard credit check to confirm your information. If you’re approved, you’ll receive an overview of the final loan terms. Review the documents, and if all looks good, you can sign the paperwork to receive your loan.

3. Confirm your old loan is closed, then start making payments. Your new lender will likely pay off your old loan directly. However, keep making payments on your old debt until you receive confirmation that it’s been paid off and your account has been closed. Once that happens, you’ll start making regular payments to your new lender on your refinanced loan.

How To Refinance Student Loans With Bad Credit

Applying with a co-signer is likely the best way to qualify for student loan refinancing when you have bad credit. A co-signer guarantees repayment of your loan if you default, which reduces risk for the lender and can help you qualify for a loan with a better interest rate.

The ideal co-signer is someone you trust with a good payment history and a FICO Score of 670 or higher. When using a co-signer, paying on time is crucial since late payments can affect both of your credit scores. If you default on the loan, the lender can sue you and your co-signer for the unpaid debt.

Talking with potential co-signers about your employment prospects and repayment plans after school could help them feel more confident about doing you a favor.

Explore Student Loan Refinancing Lenders by Category

Is Refinancing Student Loans Worth It?

Refinancing student loans is worthwhile if you have a stable job and strong enough credit to qualify for a low interest rate, which can save you money in the long run. Most lenders don’t charge application or origination fees, so there are no upfront costs.

However, choosing the right loan term is important. Extending your student loan repayment term can result in lower monthly payments but higher long-term interest costs. Ideally, the payment reduction from refinancing should come from a lower interest rate and not a longer term.

If your credit is fair or poor (below 670 on the FICO Score scale) and you can’t qualify for an interest rate lower than your current rate, refinancing might not save you much money. And if your job is unstable or there’s any chance you might need to use payment relief options like deferment, loan forgiveness or income-driven repayments, it’s probably best to keep federal student loans.

Frequently Asked Questions (FAQs)

Which student loans should I refinance?

Your safest bet is to refinance high-interest private loans. That’s because you won’t lose potentially useful federal repayment options, including up to three years of deferment or forbearance.

You do not have to refinance all of your loans, so consider keeping federal loans out of your refinance package.

If you do not plan to make use of any federal loan benefits—or you want to refinance so that you can pay off loans very quickly—it’s possible to refinance federal loans. Consider doing so, though, after the Covid-19 monthly payment freeze has ended.

When is the best time to refinance student loans?

Many lenders require a degree in order to refinance, so it’s best to wait until you’ve graduated. Some lenders have more relaxed degree requirements, but they may want to see a history of on-time student loan payments for a period of time first (say, 12 months). You also typically must be out of school before refinancing, with some exceptions.

If you don’t yet meet the credit and income requirements but you want to refinance anyway, it’s possible to use a co-signer. Due to the risk to their credit score the co-signer takes on, though, it’s ideal to wait to refinance until you have the financial profile to be eligible as the sole borrower. You can take the time to improve your credit score and refinance later on.

What is ‘co-signer release?’

Some refinance lenders offer to release the co-signer from a loan after the borrower makes a certain number of payments. That can protect the co-signer from a credit hit as a result of the primary borrower’s negative payment history. If you plan to use co-signer release, check your loan documents to see when it will be possible (in 36 months, for instance) and what additional requirements you might need to meet.

Can you refinance a student loan more than once?

You can refinance a student loan more than once if you meet a lender’s requirements for refinancing. There’s typically no cost to refinance student loans, so refinancing multiple times could be worthwhile if it would save you money or achieve another goal, such as switching from a variable rate to a fixed one in a rising-rate environment.

How long does it take to refinance student loans?

The processing time for student loan refinancing can vary by person and lender. Generally, refinancing could take a few weeks or several months, depending on how quickly you turn in loan documentation and receive approval. You should continue making payments on your old student loans to keep old loans in good standing until your new loan pays them off.

How much will I save by refinancing my student loans?

The amount you can save on your student loans depends on a few factors, including your loan balances, interest rates and repayment terms.

For example, let’s say you owe $28,950 in student loans with an 8% interest rate. If you could refinance to a 6% rate, you’d save $3,059 in interest charges over a 10-year repayment term.

Our student loan refinance calculator can help you compare your current loans with a student loan refinance offer to determine your potential savings.

What is the credit score needed to refinance student loans?

The minimum credit score needed to refinance student loans varies by lender, but as a general rule of thumb, you’ll likely need a score of about 650 to qualify. However, to get the best interest rates available, a credit score of roughly 720 or higher is a common benchmark.

If your credit is lower, consider waiting to refinance until you can increase your credit score.

Can I refinance student loans with bad credit?

Some lenders may refinance student loans if you have bad credit, but it’s often not worthwhile. With poor credit or a spotty financial history, you’ll likely only qualify for the highest interest rates. Since most people refinance to get a lower rate, it probably doesn’t make sense to refinance if you have subpar credit.

However, you may be able to add a co-signer to your application. If they have excellent credit and a stable income, you could qualify for better rates—even if your own credit score is low. But adding a co-signer comes with it’s own set of risks and rewards, so make sure you understand the pros and cons before using this strategy.

Can I refinance student loans to a lower rate?

Whether you can refinance your student loans to a lower rate depends on several factors, including:

– The current rate on your loans
– Your credit score and credit history
– Your income and other debt
– Whether you have a co-signer on your loan application

Luckily, many refinancing companies allow you to get a rate quote with a soft credit check, which doesn’t hurt your credit.

Is refinancing student loans better than consolidation?

Student loan refinancing and consolidation are two similar, but distinctly different, processes. With refinancing, you combine all your old loans into a new debt. The interest rate on the refinanced loan is determined by your creditworthiness, and if you have excellent credit, you could reap significant savings by getting a lower rate. Only private lenders offer refinancing, so your refinanced debt will be a private student loan.

Student loan consolidation, however, typically refers to a direct consolidation loan. This is a federal program that allows borrowers to combine multiple federal student loans into one consolidation loan. It remains federal debt, so you keep all the same protections. However, the new interest rate on your consolidated loan is simply a weighted average of your old rates. That means you won’t save money with consolidation.

Refinancing and consolidation both have their pros and cons, and the right option for you depends on your financial situation and goals.

Next Ups In Student Loans

Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.

Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
Caroline Basile
Mortgages and Student Loans Deputy Editor

Caroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She holds a degree in journalism from the University of North Texas. When she’s not working on finance-related content, Caroline enjoys baseball, traveling and going to concerts.

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