30-Year Refinance for Student Loans: What To Know Before Extending Your Term

Refinancing to a 30-year student loan term can significantly lower your monthly payments by spreading them out over a longer period. This is typically more appealing to borrowers with large loan balances because it offers immediate relief for tight budgets. However, finding a private lender that offers 30-year student loan refinancing can be challenging.

In this guide, learn about your options for extending your repayment term to 30 years, the pros and cons of longer loan terms, and whether this strategy is right for your financial situation.

Current student loan refinance rates

Can I refinance my student loan term to 30 years?

A 30-year refinance term isn't typically an option with private lenders. Most private lenders cap their repayment terms at 20 years. However, it might still be possible to achieve a longer repayment term with careful planning and potentially several student loan refinances.

For federal student loan borrowers, a Direct Consolidation Loan could allow you to stretch your repayment term to 30 years, but this option is generally available only to those with a large amount of federal debt.

Keep in mind that extending your term can lower your monthly payments but also increase the total interest you'll pay over time.

How to get a 30-year student loan refinance

Finding a private lender that offers a 30-year student loan refinance term might be a challenge, but there are a few strategies you can explore:

• Refinance multiple times: It may be possible to achieve a 30-year loan repayment on a private loan if you refinance your loan multiple times. While lenders generally don't offer private student loans longer than 20 years, you could spread your repayment out over a longer period by refinancing several times.
• Opt for a slightly shorter loan term: A 30-year refinance isn't typically an option unless you refinance more than once, but you'll have more options if you choose a shorter loan term, such as 20 years instead of 30. You'll still have considerably lower monthly payments than you would on a 10-year loan, meaning you're still getting some of the benefits of a longer loan term.
• Apply for a federal Direct Consolidation Loan: Almost anyone with federal student debt is eligible to consolidate their loan(s) into a Direct Consolidation Loan. However, you can only extend your repayment term to 30 years if you have more than $60,000 of federal debt.

If you opt for a federal student loan consolidation, you won't have to meet any income or credit requirements. However, private refinancing requires a good credit score, especially if you want to land the best interest rate. And if you're considering consecutive loan refinances, you'll have to keep your credit in good shape over a long period.

The table below shows the average interest rate by credit score for refinancing student loans in 2024, according to data compiled by Credible:

If you want to refinance with a private lender and don't have ideal credit, consider applying with a cosigner to improve your chances of approval. Depending on your lender, you may be eligible for a cosigner release after a couple of years, freeing them from the responsibility of the loan.

Pros and cons of extending your loan term

Pros of refinancing to a longer term

The most significant benefit of an extended loan term is that you can lower your monthly payments significantly by spreading them out over many years.

“A lower payment can free up cash flow to help the borrower achieve other financial goals, such as building up an emergency fund or paying off higher interest rate debt such as credit cards,” says Jack Wang, wealth advisor and financial aid expert at Innovative Advisory Group.

For example, refinancing $100,000 in student loan debt from a 10-year term to a 30-year term at an interest rate of 6% could reduce your monthly payments by more than $500 per month. That extra $500 per month could help you save for a 10% down payment on the average home in just six years, based on Zillow's average home price.

Another benefit of a longer loan term is the opportunity to consolidate multiple loans. If you have several smaller loans with 10-year repayment terms, refinancing can combine them into one longer-term loan with a lower monthly payment, simplifying your repayment process.

See Also: How To Choose the Best Student Loan Repayment Option

Cons of refinancing to a longer term

While extending your loan term can lower monthly payments, there are significant drawbacks.

The first challenge is that most lenders don't offer 30-year terms for student loan refinancing. Private lenders typically cap repayment terms at 20 years. To extend your loan to 30 years, you might need to refinance multiple times, which could complicate your repayment plan.

Choosing a longer loan term also means staying in debt much longer than the standard repayment period, potentially weighing on your finances for decades. Additionally, you'll pay far more in interest over the life of the loan.

For example, refinancing a $100,000 loan from a 10-year to a 30-year term at a 6% interest rate would result in more than $80,000 in additional interest charges.

Lastly, if you refinance federal loans into a private loan, you'll lose access to federal benefits, such as low fixed interest rates, forbearance and deferment options, income-driven repayment plans, and potential loan forgiveness. These can be invaluable if you face financial challenges or qualify for specific forgiveness programs.

Should I refinance to a longer loan term?

Refinancing to a longer loan term isn't ideal for everyone. It's usually a better fit if you have a significant loan balance.

Loretta Kilday, an attorney and spokesperson with Debt Consolidation Care, says this strategy works best for high-earning professionals with stable incomes and large student loan balances, usually more than $100,000.

“I recommend it to doctors, lawyers, and other professionals who need immediate monthly payment relief but can still make consistent payments,” Kilday says.

If you're considering extending your loan term, it's also likely that you want to prioritize lower monthly payments over a quick loan payoff. This could be because you want to prioritize other financial goals or because you have a large loan balance relative to your income.

Check Out: Best Student Loan Refinance Companies

Tips for managing a 30-year student loan refinance

When you take out a 30-year loan — or refinance multiple times over 30 years — it's important to have a strategy in place to become debt-free.

Even if you're opting for the longer loan term to take advantage of the lower monthly payments, it may still be a good idea to make extra payments when you can. Doing so will reduce your total interest payments considerably and can help shave some years off your loan.

“Just because you have a 30-year loan does not mean you have to keep the loan for 30 years,” says Wang.

“Most loans, including student loans, do not include prepayment penalties. So, a borrower can build up other aspects of their finances, then pay the loan down aggressively later to save on interest over the life of the loan.”

This may be particularly beneficial for someone who graduates with a large loan balance and a low income but whose income rises over time. As you earn more, you can pay more on your loans.

Another thing to consider on a longer loan term is whether you'll have a fixed or variable interest rate. A fixed interest rate, which all federal loans have, helps keep your payments stable over your entire loan term. A variable-rate loan often has a lower upfront interest rate, potentially leading to major rate fluctuations that could be hard on your budget.

Lastly, keep your eyes out for opportunities to refinance again at a lower rate. Over a 30-year period, even a small rate difference can make a big difference. If your credit improves or market rates go down, consider refinancing for both short-term and long-term savings.

Other ways to lower monthly student loan payments

Before extending your repayment term to lower your monthly payments, consider these alternatives:

• Switch to an income-driven repayment plan: If you have federal student loans, you can switch to an income-driven repayment plan to potentially reduce your monthly payment. If you switch to the Saving on a Valuable Education (SAVE) Plan, for instance, your payment could be as low as $0.
• Look into deferment or forbearance: While not permanent solutions, deferment or forbearance options could help you temporarily lower your payments if you're experiencing financial hardship or other extenuating circumstances.
• Refinance your loans without extending your repayment term: If you're able to refinance to a loan with a lower interest rate, you can reduce your monthly payments without having to switch to a longer repayment term.