Student loan consolidation vs. refinancing
If you're trying to simplify your repayments or reduce your student loan interest rate, it’s essential to understand the difference between federal consolidation and private refinancing. While these two options may sound similar, they work in very different ways.
Federal student loan consolidation is a government program that allows you to combine multiple federal loans into a single loan issued by the government. While it can help streamline payments, federal consolidation won’t reduce your interest rate. The new rate is a weighted average of your existing federal loan rates. There’s no credit check required, and you’ll keep access to federal benefits like income-driven repayment. However, it only applies to federal loans. You can’t include private student loans.
Private student loan refinancing replaces one or more existing loans (federal, private, or both) with a new loan from a private lender. If you have strong credit or a qualified cosigner, you may be eligible for a lower interest rate, which can reduce your monthly payments or help you repay your student loan debt more quickly. However, refinancing does require a credit check. And if you refinance federal loans, you’ll lose federal protections like deferment, forbearance, and income-driven repayment plans.
In summary, federal consolidation simplifies federal student loans without lowering your rate, while refinancing offers the potential to save money. But if you refinance federal student loans, you’ll forfeit federal benefits.
When does student loan refinancing make more sense than consolidation?
You might be a good candidate for refinancing if you're looking for more control over your repayment strategy and, if considering refinancing federal loans, are comfortable moving away from federal loan protections. Refinancing can be a very beneficial financial move if your credit has improved since you first took out your loans or you’ve increased your income.
Refinancing is often a good fit if:
- You want to reduce your interest rate
- You have both private and federal loans and want one monthly payment
- You’re not relying on federal loan benefits like income-driven repayment or forgiveness
- You’re in a strong financial position and want to pay off debt faster
With Credible, you can compare real prequalified student loan refinancing offers from multiple trusted lenders, with no impact on your credit score.
Why Credible?
Why borrowers confuse consolidation with refinancing
The terms consolidation and refinancing are often used interchangeably in other types of lending, like credit cards and personal loans. Consolidation usually refers to combining multiple debts into a single loan, often with the goal of securing a lower interest rate. So when student loan borrowers search for "consolidation," they may actually be looking for the benefits that refinancing can offer, such as:
- A lower monthly payment
- A simplified repayment plan
- A way to combine all their loans into one
While federal consolidation can help streamline multiple federal loans, it won’t lower your rate or reduce your interest charges. That’s only possible through student loan refinancing.
How to refinance student loans with Credible
Refinancing student loans through Credible is fast and easy:
1. Find your student loan refinancing rates
Get prequalified in minutes with a soft credit check that has no impact on your credit score. You’ll get real, personalized rates from top lenders with fixed APRs from 3.99% to 10.3%, and variable APRs from 4.35% to 11.38%.
2. Compare your refinancing options
Evaluate student loan refinancing options side by side, considering not just the interest rates, but also repayment terms and monthly payments. None of Credible’s partner lenders charge origination fees or prepayment penalties.
3. Choose a loan
Select the best student loan refinancing option for your financial goals. You may choose to apply with a cosigner to increase your chances of approval or secure more favorable terms.
4. Submit your student loan refinancing application
Complete the lender’s full student loan refinancing application and upload supporting documents such as pay stubs and tax returns.
Pros and cons of student loan refinancing
Pros
- May lower your interest rate and total repayment cost
- Combine federal and private loans into one
- Choose new loan terms that fit your budget
- Pay off debt faster and save on interest
Cons
- You’ll lose access to federal benefits like income-driven repayment
- Requires good credit or a cosigner to qualify
- Not everyone will qualify for a lower rate
- Not all lenders offer options for hardship deferments
FAQ
Can I consolidate federal and private student loans together?
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Will refinancing lower my monthly student loan payment?
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Does refinancing affect my credit score?
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What happens to my federal loan benefits if I refinance my student loan?
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Is refinancing the same as student loan consolidation?
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A closer look at the best lenders for student loan refinancing
Advertiser Disclosure
RISLA: Best for Income-Based Repayment
Min. Credit Score
680
Fixed APR
3.99 - 8.29%
Variable APR
-
Loan Amount
$7,500 - $250,000
Term
5, 10, 15
Expert Insights
RISLA is notable among refinance lenders for its borrower-friendly repayment options. It offers income-based repayment, extended forbearance, and deferment options. These features give RISLA, a nonprofit, a level of flexibility not commonly found among private lenders.
Advertiser Disclosure
SoFi: Best for Member Perks
Min. Credit Score
6501
Fixed APR
4.99 - 9.99%
Variable APR
-
Loan Amount
$5,000 up to the full balance
Term
5, 7, 10, 15, 20
Expert Insights
SoFi offers more than just student loan refinancing, bundling perks such as access to financial planning, travel discounts, and member events into its lending experience. These services are automatically available to borrowers. This broader, membership-based approach sets SoFi apart from typical private lenders.
Advertiser Disclosure
LendKey: Best for Graduates With Excellent Credit
Min. Credit Score
680
Fixed APR
4.54 - 9.29%
Variable APR
-
Loan Amount
$5,000 - $250,000
Term
5, 7, 10, 15
Expert Insights
LendKey facilitates access to student loan refinancing offers from credit unions and community banks, which often have different pricing models and underwriting standards than national lenders. Borrowers submit a single application to view multiple offers. LendKey's structure may appeal to those seeking competitive rates or a more community-based lending experience.
Advertiser Disclosure
Brazos: Best for Flexible Refinance Terms
Min. Credit Score
720
Fixed APR
3.99 - 6.95%
Variable APR
-
Loan Amount
$10,000 - $400,000
Term
5, 7, 10, 15, 20
Expert Insights
Brazos offers some of the lowest student loan refinance rates available, but only to Texas residents. As a nonprofit lender, it operates with lower overhead and passes potential savings on to borrowers. This model may appeal to Texans seeking in-state refinancing options with competitive pricing.
Advertiser Disclosure
Earnest: Best for Fair Credit
Min. Credit Score
665
Fixed APR
4.35 - 9.99%
Variable APR
-
Loan Amount
$5,000 to 550,000
Term
5, 7, 10, 15, 20
Expert Insights
Unlike many student loan refinance lenders, Earnest considers applicants with fair credit, provided other aspects of their financial profile, such as savings, employment status, and rent or mortgage payments, are strong. Earnest's approach may benefit those who don't meet traditional credit standards but show overall financial stability. This makes it a potential option for borrowers with thinner credit histories.
Advertiser Disclosure
Citizens: Best for Current Account Holders
Min. Credit Score
Does not disclose
Fixed APR
5.74 - 10.30%
Variable APR
-
Loan Amount
$10,000 - $750,000
Term
5, 7, 10, 15, 20
Expert Insights
Citizens offers refinancing through a traditional bank platform, with nationwide availability and loan terms up to 20 years. Borrowers can refinance multiple education loans and may qualify for a loyalty discount if they already bank with Citizens or an autopay discount if they set up automatic payments. These features may appeal to those seeking long-term financing from a brick-and-mortar lender.
Advertiser Disclosure
EdvestinU: Best Nonprofit Lender
Min. Credit Score
700
Fixed APR
4.15 - 9.56%
Variable APR
-
Loan Amount
$7,500 - $200,000
Term
5, 10, 15, 20
Expert Insights
Backed by a nonprofit organization, EdvestinU stands out among many others by offering student loan refinancing without requiring a degree. Borrowers can apply while still in school, which is uncommon among lenders. Eligibility for refinancing through EdvestinU is based on income and credit, with higher thresholds for larger loan amounts.
Advertiser Disclosure
INvestEd: Best for Forbearance
Min. Credit Score
670
Fixed APR
5.54 - 9.90%
Variable APR
-
Loan Amount
$5,000 - $250,000
Term
5, 10, 15, 20
Expert Insights
INvestEd stands out among student loan refinance lenders for providing 24 months of general forbearance, significantly longer than many others. This extended relief makes it a strong option for those seeking flexibility during financial hardship. INvestEd does not require a degree to refinance and sets a $36,000 minimum income threshold.
Advertiser Disclosure
ELFI: Best for High Balances
Min. Credit Score
680
Fixed APR
4.88 - 8.44%
Variable APR
-
Loan Amount
$10,000 up to total refinance amount
Term
5, 7, 10, 12, 15, 20
Expert Insights
ELFI accommodates borrowers refinancing high student debt, though the amount approved will depend on creditworthiness. The lender allows parent PLUS refinancing and offers 12 months of forbearance during financial hardship. A cosigner is not required, but can help meet ELFI's eligibility criteria.
Advertiser Disclosure
MEFA: Best for No Degree
Min. Credit Score
670
Fixed APR
6.20 - 8.99%
Variable APR
-
Loan Amount
$10,000 up to the total amount
Term
7, 10, 15
Expert Insights
Student loan refinancing with MEFA is available to borrowers regardless of whether they earned a degree. MEFA evaluates applications based on income and credit strength and permits cosigners. Terms are limited to three fixed-rate options: 7, 10, or 15 years.
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Methodology
To determine the best student loan refinance lenders, Credible collected more than 1,000 data points on a dozen companies and evaluated them on eligibility, repayment options, interest rates, loan terms, and customer support. We assigned a score out of five stars to each lender based on our findings. Below are the weightings assigned to the general categories for the best student loan refinance lenders, which comprise individual criteria that are also weighted.
- Eligibility: 25%
- Repayment options: 25%
- Interest rates: 20%
- Loan terms: 20%
- Customer support: 10%
While the best lender for you will depend on your unique needs and financial circumstances, these findings should help answer your questions and assist you in your search for student loan refinancing.
Learn more about our methodology.
