How To Refinance Student Loans With No Degree

More than 43 million Americans have left college without earning a degree, according to the National Student Clearinghouse Research Center. However, many still carry student loan debt, which can make repayment especially challenging.

Refinancing can help reduce your debt costs and simplify repayment, even if you didn't graduate. While not every lender offers this option, some do if you meet their requirements and can show you're able to repay the loan.

Here's a look at the top lenders that allow you to refinance student loans with no degree, and whether it's the right move for you.

Current student loan refinance rates

Can you refinance student loans without a degree?

Most lenders require you to have a degree to refinance, but some will work with you even if you didn't graduate. That means you'll need to compare lenders carefully to find one that offers this option.

To qualify, you'll generally need a good credit score and steady income to show you can repay the loan. Some lenders also set minimum loan amounts to refinance or require that you've already made a certain number of payments on your existing student loans.

Lenders that offer student loan refinancing with no degree

The following lenders make it possible to refinance your student loans even if you didn't graduate:

• RISLA: You can refinance with RISLA if you have at least $7,500 in student loans. You may also qualify for an income-based repayment plan on your refinanced loan if you can demonstrate financial hardship.
• EdvestinU: Refinancing with no degree is available through EDvestinU if you have a minimum of $7,500 in student loans.
• Earnest: Earnest allows you to refinance without a degree if you have at least $5,000 in student loans (or $10,000 if you live in California). You also must have left school more than 6 years ago, have a credit score of 700 or higher, and your school cannot have been for-profit.
• PNC: PNC doesn't require a degree, but you must show a record of 24 consecutive on-time payments on at least one student loan within the past 2 years.

Eligibility criteria to refinance with no degree

Each lender sets its own requirements for refinancing without a degree, but they're often similar to those for borrowers who graduated.

“Like any other private student loan, the borrower will be subject to credit qualifications, such as having an adequate credit score and a low debt-to-income ratio,” explains Jack Wang, a wealth adviser and host of the Smart College Buyer podcast.

Some common requirements include:

• Loans must have been used for qualified education expenses at an eligible school
• No record of bankruptcy or foreclosure
• A history of on-time student loan payments
• Proof of steady employment and enough income to cover repayment
• A good to excellent credit score, usually 670 or higher

If you don't meet these requirements on your own, applying with a strong cosigner could improve your chances of approval.

Pros and cons of refinancing without a degree

Refinancing isn't right for everyone, so it's important to weigh both the pros and cons before moving forward.

Pros

If you didn't graduate, the main advantages of refinancing your student loans include:

• Lowering your interest rate and monthly payments
• Paying off debt faster by choosing a shorter loan term
• Combining multiple loans into one for simpler repayment

“One of the pros to refinancing student loans is that if you have built a strong credit history and stable income, you could qualify for a lower interest rate,” explains Domenick D'Andrea, an accredited investment fiduciary and co-founder of DanDarah Wealth Management.

Keep in mind that refinancing can also affect your overall costs. Extending your repayment term may lower your monthly payment but increase the total interest you'll pay over time. Choosing a shorter term can help you become debt-free faster, but your monthly payments will be higher.

A student loan refinance calculator can show how different loan terms and rates will affect your finances.

Cons

Refinancing without a degree comes with some clear drawbacks, starting with the fact that it can be harder to qualify. “Lenders will take a deeper look at your credit and work history before you can refinance,” says D'Andrea.

Here are some of the key disadvantages:

• Stricter qualifying requirements, since lenders view non-graduates as higher risk
• Fewer options, as not all lenders are open to borrowers without a degree
• Loss of federal loan protections if you refinance federal student loans

“The biggest con of refinancing a student loan would be forgoing any federal loan protections or forgiveness programs,” advises Jason Fannon, certified financial planner (CFP) and senior partner at Cornerstone Financial Services. These protections include forgiveness programs and income-driven repayment plans that tie your monthly payments to your income.

“You also could incur fees, including origination fees, application fees, and prepayment fees,” warns D'Andrea. “The fees could wipe out any benefit the new loan gives you by refinancing to a lower interest rate.”

Managing federal loan debt with no degree

If you have federal student loans and are struggling to keep up, refinancing with a private lender isn't your only option. You can also consolidate your loans through a Direct Consolidation Loan, which doesn't require a degree and lets you keep federal benefits.

A Direct Consolidation Loan combines eligible federal loans into one. Unlike refinancing, it doesn't lower your interest rate. Instead, your new rate is the weighted average of the loans you consolidate.

Consolidation can still be useful because it may qualify you for more repayment options. Depending on your balance, you can extend your repayment term up to 30 years, making monthly payments more manageable.

Keep in mind that consolidation only applies to federal loans. You can't use it to combine federal and private loans into one.