Is It Worth It to Refinance Student Loans?

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There are several possible end goals when it comes to refinancing your student loans. For example, maybe you want to get a lower interest rate, reduce your monthly payments, or pay off your loans soon.

However, while refinancing might be a good idea in some cases, it isn’t right for everyone.

Here are a few scenarios when it might be worth it to refinance student loans:

1. You want to lower your monthly payments
2. You want to save money long term
3. You want to pay off the loan faster
4. You don’t qualify for student loan forgiveness

1. You want to lower your monthly payments

If your monthly student loan payments are too high for you to comfortably afford, you might consider refinancing your student loans to extend your repayment term. This could reduce your payments and lessen the strain on your budget.

Additionally, consolidating your student loans through refinancing will leave you with just one loan and payment, which might make your repayment easier to manage.

But keep in mind that choosing a longer repayment term means you’ll pay more in interest over time.

If you’re wondering how competitive your loan is, the loan score tool below can help. Just enter your APR, credit score, monthly payment, and remaining balance (estimates are fine) to see how your loan stacks up.

Learn More: How to Refinance Your Student Loans

2. You want to save money long term

Your student loan interest rate is one of the biggest factors in determining how much you actually pay for your loan. If you have a particularly high interest rate, you could end up paying thousands of dollars in interest.

However, depending on your credit, you might be able to lower your student loan interest rate through refinancing. This could save you a significant amount of money on interest charges — as well as potentially help you pay off your loans faster.

Use our student loan refinancing calculator below to see how much you can save by refinancing your student loans.

Check Out: When to Refinance Student Loans

3. You want to pay off the loan faster

The average time to repay student loans is 10 years — though this can vary depending on your loan balance and degree type. If you’re looking to pay off your student loans early, then refinancing might be a good option.

Depending on your credit, you might qualify for a lower interest rate, which could reduce how much you pay in interest and help you repay the loan more quickly.

Or you might opt for a shorter repayment term. While this will generally raise your monthly payments, it could also get you a better interest rate while trimming down your repayment time.

If you’re wondering how long it’ll take to pay off your student loans, enter your current loan information into the student loan repayment calculator below to find out. Use the slider to see how increasing your payments can change the payoff date.

Learn More: How Long Does It Take to Pay Off Student Loans?

4. You don’t qualify for student loan forgiveness

One of the major benefits of federal student loans is the potential to qualify for a student forgiveness program, such as:

• Public Service Loan Forgiveness: if you work for an eligible nonprofit or government organization, you could apply for Public Service Loan Forgiveness (PSLF) after 10 years of qualifying federal student loan payments.
• Income-driven repayment forgiveness: If you sign up for an income-driven repayment (IDR) plan, you could have any remaining balance forgiven on your federal student loans after 20 to 25 years of payments (depending on the plan).

Unfortunately, while most federal student loans can generally at least qualify for forgiveness through an IDR plan, private student loan forgiveness doesn’t exist.

However, there are other options that could help you more easily manage and pay off private student loans — such as refinancing.

If you can qualify for a lower rate or better terms by refinancing your private student loans, then it’s probably worth it.

Check Out: How Often Can You Refinance Student Loans?

Drawbacks of refinancing student loans

While refinancing is a good idea in some cases, here are a few scenarios where refinancing might not be worth it:

• You don’t want to lose federal protections. While you can refinance both federal and private student loans, refinancing federal student loans will cost you your federal benefits and protections — such as access to income-driven repayment plans and federal unemployment deferment. Additionally, you’ll no longer be eligible for the suspension of federal payments and interest accrual under the CARES Act due to the COVID-19 pandemic.
• You can’t get a lower interest rate. In addition to verifiable income and a low debt-to-income ratio, you’ll generally need good to excellent credit to get approved for refinancing. You’ll also need a good credit score to qualify for a lower interest rate — which means you might not be able to get a better rate if you have poor or fair credit. Additionally, while some lenders offer student loan refinancing for bad credit, these loans tend to come with higher interest rates compared to good credit loans. In this case, it might be better to either build your credit first or apply with a cosigner to potentially get a lower interest rate.
• You’re almost done repaying your loans. If you have only a couple of months or years left in your repayment term, it’s likely better to just stay the course and pay off your loans. Refinancing could add years to your repayment plan, meaning you could end up paying more in interest payments compared to if you simply paid them off with your original plan.

Learn More: Can You Refinance a Student Loan to a 30-Year Term?

Refinancing during the COVID-19 pandemic

Due to the COVID-19 pandemic, payments and interest accrual on federal student loans have been suspended by the CARES Act through September 1, 2023.

If you’re thinking about refinancing your federal student loans, it’s likely better to wait until this administrative forbearance period ends so you don’t lose access to this forbearance period.

However, private student loans aren’t eligible for this federal student loan repayment option — which means it might be a good idea to refinance if doing so will save you money or help you pay off your loans faster.

Check Out: Which Student Loans Should You Pay Off First?

Compare multiple lenders risk-free to find your strategy

If refinancing seems like a good fit for your situation, be sure to compare as many student loan refinance companies as possible to find the right loan for you. Consider not only interest rates but also repayment terms and any fees charged by the lender.

It’s easy to compare lenders with Credible — you can see your prequalified rates from our partner lenders in the table below in two minutes.

Lender	Fixed rates from (APR)	Variable rates from (APR)	Loan terms (years)	Loan amounts	Discounts
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	3.99%+	5.25%+	5, 7, 10, 15, 20	$10,000 up to $250,000 (depending on degree)	Autopay
Fixed APR: 3.99%+ Variable APR: 5.25%+ Min. credit score: 720 Loan amount: $10,000 to $400,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Military deferment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must have a credit score of at least 720, a minimum income of $60,000, and must be a resident of Texas Customer service: Email, phone Soft credit check: 720 Cosigner release: No Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 - $149,000 Max. Graduate Loan Balance: $200,000 - $400,000 Offers Parent PLUS Refinancing: Does not disclose
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.89%+1	6.92%+1	5, 7, 10, 15, 20	$10,000 to $500,000 (depending on degree and loan type)	Autopay, loyalty
Fixed APR: 5.89%+1 Variable APR: 6.92%+1 Min. credit score: Does not disclose Loan amount: $10,000 to $750,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay, loyalty Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $150,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	6.99%+2	6.99%+2	5, 7, 10, 12, 15, 20	$5,000 to $300,000 (depending on degree type)	Autopay
Fixed APR: 6.99%+2 Variable APR: 6.99%+2 Min. credit score: Does not disclose Loan amount: $5,000 to $300,000 Loan terms (years): 5, 7, 10, 12, 15 Repayment options: Military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: All states except for ME Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 24 to 36 months Loan servicer: College Ave Servicing LLC Max. Undergraduate Loan Balance: $100,000 to $149,000 Max. Graduate Loan Balance: Less than $300,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	6.0%+5	7.93%+5	10, 15, 20	$7,500 to $200,000	Autopay
Fixed APR: 6.0%+5 Variable APR: 7.93%+5 Min. credit score: 700 Loan amount: $7,500 to $200,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Immediate repayment, academic deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and submit two personal references Customer service: Email, phone Soft credit check: Yes Cosigner release: After 24 months Loan servicer: Firstmark Services Max. Undergraduate Loan Balance: $150,000 to $249,000 Max. Graduate Loan Balance: $150,000 to $199,000 Offers Parent PLUS Refinancing : Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.84%+3	4.86%+3	5, 7, 10, 12, 15, 20	$10,000 to $250,000	None
Fixed APR: 4.84%+3 Variable APR: 4.86%+3 Min. credit score: 680 Loan amount: $10,000 to $250,000 Loan terms (years): 5, 7, 10, 15, 20 Repayment options: Forbearance Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident, have at least $15,000 in student loan debt, and have a bachelor’s degree or higher from an approved school Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: Mohela Max. Undergraduate Loan Balance: $250,000 Max. Graduate Loan Balance: $250,000 Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	5.12%+4	8.5%+4	5, 10, 15, 20	$5,000 - $250,000	Autopay
Fixed APR: 5.12%+4 Variable APR: 8.5%+4 Min. credit score: 670 Loan amount: $5,000 to $250,000 Loan terms (years): 5, 10, 15, 20 Repayment options: Academic deferment, military deferment, forbearance Fees: Late fee, returned payment fee Discounts: Autopay Eligibility: Must be U.S. citizen or permanent resident Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: Yes Max undergraduate loan balance: $250,000 Max graduate loan balance: $250,000 Offers Parent PLUS refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	4.89%+	5.54%+	5, 7, 10, 15	$5,000 - $250,000	Autopay
Fixed APR: 4.89%+ Variable APR: 5.54%+ Min. credit score: 700 Loan amount: $5,000 to $300,000 Loan terms (years): 5, 7, 10, 15 Max. undergraduate Loan Balance: $125,000 Time to Fund: 10 to 30 days Repayment options: Immediate repayment, forbearance Fees: Late fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and have already graduated with at least an associate degree from an eligible institution Customer service: Email, phone Soft credit check: Yes Cosigner release: After 12 months Loan servicer: LendKey Technologies Inc. Max. graduate Loan Balance: $175,000 Credible Review: LendKey Student Loans review Offers Parent PLUS Refinancing: No
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	6.2%+	N/A	7, 10, 15	$10,000 up to the total amount of qualified education debt	None
Fixed APR: 6.2%+ Variable APR: N/A Min. credit score: 670 Loan amount: $10,000 up to the total amount Loan terms (years): 7, 10, 15 Repayment options: Military deferment, loans discharged upon death or disability Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident and have at least $10,000 in student loans Customer service: Email, phone Soft credit check: Yes Cosigner release: No Loan servicer: AES Max. Undergraduate Loan Balance: No maximum Max. Gradaute Loan Balance: No maximum Offers Parent PLUS Refinancing: Yes
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology. View details	6.34%+	N/A	5, 10, 15	$7,500 up to $250,000 (depending on highest degree earned)	Autopay
Fixed APR: 6.34%+ Variable APR: N/A Min. credit score: 680 Loan amount: $7,500 to $250,000 Loan terms (years): 5, 10, 15 Repayment options: Academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Available in all 50 states; must also have at least $7,500 in student loans and a minimum income of $40,000 Customer service: Email, phone Soft credit check: Does not disclose Cosigner release: No Loan servicer: Rhode Island Student Loan Authority Max. Undergraduate Loan Balance: $150,000 - $249,000 Max. Graduate Loan Balance: $200,000 - $249,000 Offers Parent PLUS Refinancing: Yes
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All APRs reflect autopay and loyalty discounts where available | 1Citizens Disclosures | 2College Ave Disclosures | 5EDvestinU Disclosures | 3 ELFI Disclosures | 4INvestEd Disclosures | 7ISL Education Lending Disclosures  | 8Nelnet Bank Disclosures

Learn How to Pay Off Your Student Loans:

• Pay Off $30,000 in Student Loans
• Pay Off $50,000 in Student Loans
• Pay Off $100,000+ in Student Loans
• Pay Off $200,000+ in Student Loans
• Pay Off $300,000+ in Student Loans
• Pay Off $400,000+ in Student Loans

About the author

Dori Zinn

Dori Zinn is a student loan authority and a contributor to Credible. Her work has appeared in Huffington Post, Bankate, Inc, Quartz, and more.

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