How to Refinance Student Loans

Learn how refinancing your student loans can help you save money. Here’s what you need to qualify, the pros and cons of student loan refinancing and how to find the best lender for you.

Refinancing a student loan can help you repay your loans faster and save you money. When you refinance a federal or private student loan, you may be able to qualify for a lower interest rate, which means you’ll pay less interest, saving you money.

Refinancing student loans can also help you manage your loans better by streamlining multiple loans and lenders into one loan and a single monthly payment. It can also reduce your monthly payment and is an option for releasing a co-signer from your original loan.

To refinance a student loan, you’ll need a steady job and good credit. A cosigner could help you qualify as well.

Student Loan Refinance 
Lenders Suggestions

College Ave

  • No application or origination fee and no pre-payment penalties
  • Repayment terms from 5 years to 20 years
  • Refinance loans as little as $5,000
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Earnest

  • No application or origination fee and no pre-payment penalties
  • Customize your loan payment and choose your loan term
  • Option to skip one payment every 12 months
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LendKey

  • No origination fee
  • Repayment terms from 5 years to 20 years
  • Forbearance available for 18 months
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Credible

  • Compare personalized rates from 10 different lenders without impacting your credit
  • Refinance federal, private and ParentPlus Loans
  • Lenders include Advantage Education Loans, Brazos, Citizens Bank, College Ave, EDvestinU, ELFI, MEFA, PenFed, RISLA and SoFi
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SoFi

  • No application or origination fee and no pre-payment penalties
  • Repayment terms from 5 years to 20 years
  • Offers unemployment protection if you lose your job
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Figure

  • No prepayment or origination fees
  • Get a 0.25% APR discount when you set up auto pay
  • Offers a 12-month forbearance option
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Discover

  • No late fees
  • Get a 0.25% interest rate reduction with auto pay
  • Options if facing a financial difficulty
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Simple Tuition

  • Compare rates from various lenders side-by-side
  • Learn about the benefits of each lender
  • Lenders include Citizen Bank, Earnest, Education Loan Finance, LendKey, Laurel Road, CommonBond and SoFi
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Frequently Asked Questions

Why should I refinance my student loans?

Student loans are often taken out when you have a limited credit history and no job. Once you’ve established good credit and have a steady salary, you may be able to qualify for a lower interest rate, which ultimately saves you money. Besides a lower interest rate, combining multiple loans and lenders into one can reduce the risk of late fees and make your loan easier to manage and keep track of.

Should I refinance my federal student loans?

If you refinance your federal loans, you will lose the perks that come with that loan, such as potential student loan forgiveness, the ability to delay payments during a rough financial time (a deferment or a forbearance) and income-driven repayment plans. You may wish to consider a Federal Direct Consolidation Loan instead.

When is refinancing not a good idea?

If you are planning on making extra payments on the loan with the highest interest rate, you should avoid including that loan in the refinance. Refinancing replaces several loans with a single loan, which prevents you from targeting the most expensive loan for quicker repayment.

How do I qualify for student loan refinancing?

Your new lender will typically look for a debt-to-income ratio that is less than 35% (your total debt divided by your annual income), depending on the lender. Some lenders will allow debt-to-income ratios as high as 50%, but the borrower must have characteristics that compensate for the high debt-to-income ratio, such as high income and type of degree. Most lenders require a credit score of at least 620 (780 or higher is much better) and proof of steady income.