When to Refinance Student Loans

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. By refinancing your mortgage, total finance charges may be higher over the life of the loan.
Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."

If you refinance your student loans, you might get a lower interest rate or reduce your monthly payments, which could help you get out of debt faster.

In fact, borrowers who refinance through Credible could potentially save an average of $17,344¹ over the life of their loan. However, refinancing isn’t always the best idea for everyone.

Here’s how to decide when to refinance student loans:

• When to refinance student loans
• When not to refinance student loans
• Are you eligible for student loan refinancing?
• Is it worth it to refinance student loans?
• Is now a good time to refinance?
• How to refinance your student loans

When to refinance student loans

Here are several situations in which refinancing student loans might be a good idea:

• You want to pay off your loan sooner: If you refinance, you can choose a shorter repayment term. While this might raise your payments, it also means you could pay off your loan faster. You might also qualify for a lower interest rate, which could make it easier to repay your loan more quickly.
• You want to combine multiple student loans: Keeping track of more than one student loan can be like herding cats sometimes. It can also be difficult to know which loan to pay off first. Refinancing could simplify your repayment by combining all your student loans into a single loan that’s easier to manage.
• You want to get a smaller monthly payment: The average student loan payment is $393. If you’re having trouble making ends meet, you could choose to extend your repayment term by refinancing, which will likely reduce your monthly payment. However, keep in mind that having a longer term means you might end up paying more in interest over time.
• You’re unhappy with your servicer or lender: If you’ve had a bad experience with the company managing your loans, you don’t have to stick with them. Refinancing lets you take your business elsewhere.
• Your income and credit are good: Refinancing lenders typically consider both your income and credit to determine if you qualify. Having verifiable income and good credit makes it more likely that you’ll qualify for a lower interest rate or better terms.
• Market interest rates are low: Sometimes refinancing rates fall so much that you might get a lower rate even if your financial situation hasn’t changed. You can also refinance again if rates change again in the future.

If you decide to refinance, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.

Also keep in mind that while federal student loan refinance is an option, you’ll lose your federal benefits and protections if you refinance to a private student loan. These include access to income-driven repayment (IDR) plans and student loan forgiveness programs.

Learn More: 4 Credit Unions for Student Loan Refinancing

When not to refinance student loans

While refinancing might sometimes be a good choice, here are a few situations in which it’s better not to refinance:

• You have federal student loans: If you refinance your federal student loans into a private student loan, you’ll lose your federal protections and benefits. This is especially important to keep in mind if you don’t have a solid financial footing since you’ll no longer have access to IDR plans.
• Your finances aren’t secure: Unlike federal student loans, private student loans don’t come with built-in protections such as deferment and forbearance. If your income could change or go down in the future, it might be better to wait on refinancing until your finances are more stable.
• You’re trying to get federal loan forgiveness: Refinancing federal loans means you’ll no longer be eligible for federal loan forgiveness programs. For example, you must have federal student loans to potentially qualify for Public Service Loan Forgiveness.
• You have poor credit: Having bad credit could make it harder to qualify for refinancing, especially if you want to get a better interest rate. While there are options for bad credit student loan refinance, they won’t come with the lowest interest rates.
• You’re close to paying off your loan: If you only have a short time left before your loan is paid off, it might make more sense to just pay it off instead of refinancing. Going through the process to only save a few pennies likely isn’t worth it — and that’s if you can even find a lender for such a small loan size.
• Interest rates are higher than what you already have: If the potential rate you could get is higher than what you have on your loan right now, it’s probably better to wait. However, It doesn’t hurt to check your rates to make sure.

Before you decide whether you should refinance, it’s also a good idea to see how much refinancing might save you over time. You can use our calculator below to see your potential savings if you refinance.

Check Out: Private Student Loan Consolidation

Are you eligible for student loan refinancing?

While the eligibility criteria for refinancing can vary by lender, here are some common requirements that you’ll likely need to meet:

• Good credit: You’ll typically need good to excellent credit to get approved for refinancing. A good credit score is usually considered to be 700 or higher. Some lenders offer refinancing for bad credit. However, these loans tend to come with higher interest rates compared to good credit loans.
• Verifiable income: Some lenders have a minimum income requirement while others don’t, but in either case, you’ll likely need to provide proof of income to show you can afford repayment.
• Low debt-to-income ratio: Your debt-to-income (DTI) ratio is the amount you owe in monthly debt payments compared to your income. To qualify for refinancing, your DTI ratio should be no higher than 50%, though some lenders might require lower ratios than this.

Learn More: Cost to Refinance Student Loans: Fees & Discounts Explained

Is it worth it to refinance student loans?

If refinancing will help you to save money, pay off your student loans faster, or manage your loans more easily, then it’s likely worth it. However, if refinancing won’t improve your financial situation or will cost you federal benefits and protections, then it might not be a good idea.

Ultimately, whether it’s worth it to refinance student loans will depend on your individual circumstances and financial goals.

Find your loan score

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.

Check Out: Is It Worth It to Refinance Student Loans?

Is now a good time to refinance?

Due to the COVID-19 pandemic, the CARES Act paused federal student loan payments and interest accrual through Dec. 31, 2022.

If you refinance your federal student loans, you’ll no longer be eligible for this administrative forbearance and will have to start making payments again. You’ll also lose access to other federal benefits and protections, such as IDR plans and student loan forgiveness programs.

How to refinance your student loans

Refinancing your student loans is a big decision, so be sure to take the time to consider whether it’s right for you.

For example, if you can qualify for a lower interest rate or better repayment terms, it could be a good idea to refinance. But if you have poor credit or unstable income, it’s probably better not to refinance your student loans.

If you’re wondering how to refinance student loans, follow these four simple steps:

• Step 1: Research and compare lenders. Be sure to compare your options from as many lenders as you can to find the right loan for your situation. Consider not only interest rates, but also repayment terms, any fees charged by the lender, and eligibility requirements.
• Step 2: Pick your loan option. After considering as many lenders as possible, choose the option that best suits your needs. For example, you might choose a loan with a shorter repayment term and higher monthly payment to pay off your loan faster. Or you might extend your repayment term to reduce your monthly payment, lessening the strain on your budget.
• Step 3: Complete your application. Once you’ve decided on a lender, you’ll need to complete a full application and submit any required documentation, such as pay stubs or tax returns.
• Step 4: Stay current on your loans. You’ll need to keep up with payments on your old loans until your new loan is processed. Once this happens, be sure to double-check that your old loans have been paid off.

Remember to consider as many lenders as possible to find the right loan for you. This is easy with Credible — you can compare your prequalified rates from our partner lenders in the table below after filling out just a single form.

Lender	Fixed rates from (APR)	Variable rates from (APR)	Loan terms (years)	Loan amounts
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	2.94%+	N/A	10, 15, 20	$7,500 up to $500,000 (larger balances require special approval)
Fixed APR: 2.94%+ Variable APR: N/A Min. credit score: Does not disclose Loan amount: $7,500 up to $500,000 Loan terms (years): 10, 15, 20 Max. undergraduate loan balance: $250,000 - $500,000 Time to fund: 4 days Repayment options: Immediate repayment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Must be a U.S. citizen or noncitizen with proof of residency card, have an acceptable income and credit history or an approved cosigner, and have entered grace or repayment on the loans he or she wants to refinance Customer service: Phone Soft credit check: Yes Cosigner release: After 12 months Loan servicer: Kentucky Higher Education Student Loan Corporation Max. graduate loan balance: $250,000 - $500,000 Credible Review: Advantage Education Loan review 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	2.49%+	4.82%+	5, 7, 10, 15, 20	$10,000 up to $250,000 (depending on degree)
Fixed APR: 2.49%+ Variable APR: 4.82%+ Min. credit score: 690 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: Does not disclose 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	4.49%+1	3.84%+1	5, 7, 10, 15, 20	$10,000 to $500,000 (depending on degree and loan type)
Fixed APR: 4.49%+1 Variable APR: 3.84%+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	3.99%+2	3.44%+2	5, 7, 10, 12, 15, 20	$5,000 to $300,000 (depending on degree type)
Fixed APR: 3.99%+2 Variable APR: 3.44%+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	4.41%+5	5.23%+5	5, 10, 15, 20	$1,000 to $250,000
Fixed APR: 4.41%+5 Variable APR: 5.23%+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 36 months Loan servicer: Granite State Management & Resources (GSM&R) 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	4.29%+3	2.48%+3	5, 7, 10, 12, 15, 20	$10,000 to $250,000
Fixed APR: 4.29%+3 Variable APR: 2.48%+3 Min. credit score: 680 Loan amount: $10,000 to $250,000 Loan terms (years): 5, 7, 10, 12, 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	5.18%+4	3.67%+4	5, 10, 15, 20	$5,000 to $250,000
Fixed APR: 5.18%+4 Variable APR: 3.67%+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 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	3.94%+ 7	N/A	5, 7, 10, 12, 15, 20	Up to $300,000
Fixed APR: 3.94%+ 7 Variable APR: N/A Min. credit score: 670 Loan amount: Up to $300,000 Loan terms (years): 5, 7, 10, 15, 20 Time to fund: Usually one business day Repayment options: Academic deferral, military deferral, forbearance, death/disability discharge Fees: None Discounts: Autopay Eligibility: Available in all 50 states Customer service: Email, phone Soft credit check: Yes Cosigner release: After 24 months Max. undergraduate loan balance: $300,000 Max. graduate balance: $300,000 Offers Parent PLUS loans: Yes Min. income: None
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	4.5%+	N/A	7, 10, 15	$10,000 up to the total amount of qualified education debt
Fixed APR: 4.5%+ 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	5.49%+	N/A	5, 8, 12, 15	$7,500 to $300,000
Fixed APR: 5.49%+ Variable APR: N/A Min. credit score: 670 Loan amount: $7,500 to $300,000 Loan terms (years): 5, 8, 12, 15 Repayment options: Does not disclose Fees: None Discounts: None Eligibility: Must be a U.S. citizen and have and at least $7,500 in student loans Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 12 months Loan servicer: PenFed Max. Undergraduate Loan Balance: $300,000 Max. Graduate Loan Balance: $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	4.29%+	N/A	5, 10, 15	$7,500 up to $250,000 (depending on highest degree earned)
Fixed APR: 4.29%+ 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

¹$17,344 savings disclaimer: Actual savings may be higher or lower. Average $17,344 savings calculation based on self-reported data from users who provided data to Credible.com about their original loans (such as loan balance, repayment term, and rate), created an account between Nov. 1, 2017 and Dec. 29, 2018, and refinanced into a student loan with a shorter repayment term than their previous loan(s). This calculation excludes borrowers who refinanced to a loan of a similar or longer duration or who reported loan terms that deviate from normal user experiences, including: (i) any loan term with less than one (1) year or more than twenty-five (25) years remaining; (ii) monthly loan payments greater than $5,000 per month; and (iii) any existing loan amount that deviates more than five (5) percent from the loan amount disbursed upon refinancing. Our calculations do not take into account variable factors such as the borrower’s potential eligibility for loan forgiveness, variable interest rates, or pre-payments. Please note that your actual savings may vary depending on interest rate, balance, loan terms, credit score, and other factors.

About the author

Lindsay VanSomeren

Lindsay VanSomeren specializes in credit and loans. Her work has appeared on Credit Karma, Forbes Advisor, LendingTree, and more.

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