Student Loan Refinancing Requirements: Credit Score, Debt-to-Income, and More

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Nick Mann

By Nick Mann

December 30, 2019

Student loan refinancing is an appealing option for many borrowers. Refinancing your loans can lower your interest rate so you can pay off student loans more quickly. Or if you’d prefer, you can lower your monthly student loan payment to make your loans more affordable over the life of the loan.

Keep in mind that refinancing federal student loans means a loss in many benefits that only federal loans offer. This includes the potential for loan forgiveness and lowering payments with income-driven repayment plans. Federal loans also have generous forbearance and deferment options if you become unemployed or have an economic hardship and an option to discharge loans for death or disability. Be sure to keep all of this in mind before refinancing federal student loans. Now, onto requirements for student loan refinancing.

A Debt-to-Income Ratio Under 50%

Your debt-to-income (DTI) ratio is one of the first factors lenders look at when determining eligibility. DTI lets lenders know what percentage of your income goes toward bills and. It’s calculated by dividing your total monthly payments by how much you earn each month.

Generally speaking, lenders will want your DTI to be under 50%. However, the lower it is the better, and anything under 20% is considered excellent.

A Minimum Credit Score of 650

As you might imagine, lenders will also look closely at your credit score. Requirements will vary, but you’ll typically need for it to be at least 650 to be eligible for student loan refinancing. If it’s in the 700s or higher, your chances of qualifying increase considerably. Anything over 800 is considered excellent and makes you a very appealing borrower to most lenders. 

If your credit score is under 650, it may still be possible to refinance if you have a cosigner

When considering a cosigner, lenders primarily look for a person with good credit, ideally with a credit score of 700 or higher. Of course, the higher the better, and your chances of being approved greatly increase when a cosigner has a credit score of 740 plus. 

A lender also wants someone who has a good income and is able to comfortably make payments in case you can’t.

A Steady Job or Consistent Income

Lenders want to be assured that you’ll be able to continually make payments without issue for the entire repayment term. Therefore, you’ll need to have either a steady job or some other source of consistent income. 

For instance, on their eligibility guide, student loan refinance company Earnest requires a borrower to be employed, have a written job offer for a position that begins within six months or have consistent income. They also specify that a borrower must have enough savings to pay for at least two months of regular expenses, including housing.

Many lenders have no minimum income requirements, but you’ll need to check the eligibility criteria of each particular lender to be sure.

Use our Student Loan Refinancing Calculator to estimate how much you could lower your total and monthly loan payments by refinancing your student loans.

A Balance of at Least $5,000

In most cases, lenders will require you to have a minimum of $5,000 to repay on your student loans. 

Having a minimum amount like this ensures that refinancing is worth the lender’s time, and they’ll have a sizable return from the interest you pay. 

It should also be noted that most companies also have a maximum amount they’re willing to refinance. This typically tops out at around $300,000, but it can be lower.

You Completed Your Degree Program

Often, a lender will only offer student loan refinancing if you completed your degree and graduated. Others, like Earnest and Figure, are even more particular and specify that you must have graduated from a Title IV accredited school, which is an institution that processes federal student aid. 

If you only completed part of your education but didn’t graduate, this will reduce your student loan refinancing options and you won’t be eligible with as many lenders.

Your Student Loans Aren’t Currently in Default

Federal student loans officially enter default once they’ve gone unpaid for 270 days. For private student loans, that period is shorter, typically at 120 days. 

If this applies to you, you’ll likely be ineligible for refinancing because this suggests that you’ll have difficulty making payments

However, it’s different if you’ve had a student loan in default in the past, but you’ve since rehabilitated the student loan. As long as everything has been squared away, you should be eligible with many lenders. This is something to keep in mind if you’ve ever defaulted because it doesn’t automatically disqualify you.

Other Requirements

The points we’ve discussed so far tend to apply across the board. But there are some additional requirements that certain lenders will have. 

Here are some you’ll often encounter:

  • You must be either a US citizen or Permanent Resident

  • The college you attended must be located in the United States

  • You aren’t behind on your mortgage or rent payments

  • You’ve never filed for bankruptcy

  • You don’t have large amounts of non-student, non-mortgage debts, such as credit cards or personal loans

  • You’re not consistently charged overdraft or late fees when banking

It’s important to be thorough when browsing at eligibility criteria and look at all of the fine print before applying for refinancing. 

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.

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