Does Refinancing a Student Loan Affect Your Credit?

Facebook icon Twitter icon Print icon Email icon
Kristen Kuchar

By Kristen Kuchar

November 13, 2019

Refinancing a student loan will not have a large impact on your credit. You can take extra precautions to make sure refinancing student loans won’t hurt your credit score with simple steps.

Refinancing a student loan does have some impact on your credit because lenders will need to run a credit check before agreeing to a new loan, but the impact is minimal. 

According to FICO, if refinancing a student loan is reported as the same loan with changes, there are three things associated with the loan modification that can affect your score, including:

  • the credit inquiry
  • changes to the loan balance
  • changes to the terms of that specific loan

If it’s considered a new loan, along with those three items above, it is also impacted by the new “open date.”

Sign up to get the latest student loan tips and news:

* indicates required

Ultimately, refinancing a student loan can have a positive impact on your credit overall if it’s helping you make payments on time. Instead of missing payments while juggling different lenders, streamlining your loans into one could make them easier to deal with. Here’s how to make sure refinancing a student loan doesn’t negatively impact your credit: 

Get an idea of your rate before applying. Many lenders offer you a chance to get a ballpark of your rate before applying. For example, SoFi allows you to find your rate in two minutes. 

Don’t apply to every lender. Borrowers should pick a few lenders and apply to them around the same time to see actual rates. Note that the lender with the lowest advertised rate is not necessarily the one that will offer you the lowest actual rate. 

Don’t stop making your loan payments. Even though the refinance process is underway, don’t stop making your student loan payments on your old loan until the lenders confirm that the refinance is complete. If you miss a payment or the payment is late, this could impact your new loan, not to mention result in a late fee.

Consider if refinancing is right for you. Refinancing a student loan can result in a lower interest rate which will save you money and could even lower your monthly payment making it more manageable. However, there are situations where student loan refinancing may be a bad idea, such as if you don’t qualify for a lower interest rate than what you already have. Refinancing federal loans means you’ll lose valuable loan benefits, including forbearance, deferment, income-based repayment plans or loan forgiveness. 

If you have decided that student loan refinance is right for you, check out our list of the best lenders to refinance student loans.

At, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.

A good place to start:

See the best 529 plans, personalized for you