Student Loan Refinance Calculator

A student loan refinance calculator helps estimate how much you could save by refinancing. It uses your current loan balance, interest rate, and repayment term to show how a new loan could potentially lower your monthly payment or your total interest costs. 

A private student loan refinancing calculator is especially helpful if you're comparing lender offers or deciding whether refinancing makes sense based on your financial goals.

Follow these steps to estimate your potential savings:

1. Input your current loan information

To establish a baseline, enter your remaining student loan balance, which is the total amount you currently owe. You will also need to provide your current interest rate and your current monthly payment. This allows the calculator to see exactly what you are paying under your existing terms.

2. Enter your new estimated interest rate

Input the new student loan refinancing interest rate you expect to receive. This could be a prequalified rate provided by a specific lender or a ballpark estimate based on your current credit score. This figure is the primary driver in determining how much interest you will save.

3. Select your new loan term

Choose your new loan term, which is the number of years you intend to take to pay off the refinanced balance. Most lenders offer terms ranging from 5 to 20 years. A shorter term usually means higher monthly payments but lower total interest. A longer term lowers your monthly payment but increases the total interest you’ll pay over time.

4. Review your estimated savings

Once the details are filled in, the calculator will generate your new monthly payment and total repayment cost. Compare these estimates against your current loan details to understand your total potential savings over the life of the loan. This data helps you decide if a lender's offer aligns with your long-term financial goals.

See Also: Compare the 10 Best Student Loan Refinance Lenders

Refinancing can change both your monthly payment and the total cost of your loan.

If you qualify for a lower interest rate, you could pay less in interest over time. Additionally, choosing a shorter repayment term can help you become debt-free faster and reduce your overall loan cost, but it can also mean higher monthly payments. If you extend your repayment term, your monthly payment will likely go down. But you'll pay interest for a longer period, which often increases the total amount you owe.

Before refinancing, it's important to weigh what matters most to you: lowering your monthly payment, paying off your loan faster, or saving the most in the long run.

Learn More: Should I Refinance My Student Loans?

The amount you can save by refinancing depends mostly on the new interest rate you qualify for. The lower the rate, the more you can reduce your total repayment cost.

For example, let's say you have $30,000 in student loans with a 10-year repayment term at a 9% interest rate. If you refinance to a 5% interest rate with the same repayment term, you could save around $7,536 over the life of the loan.

Not all refinancing offers are the same. To find the best deal, it's important to shop around, compare refinance rates, and look closely at the terms each lender offers. Many lenders let you check your rates with a soft credit pull, so you can see your options without affecting your credit score.

Here's what to focus on when comparing offers:

• Interest rates: Look for the lowest fixed or variable rate you qualify for. Even a small rate drop can lead to significant savings over time.
• Repayment terms: Most lenders offer terms between 5 and 15 years, though some go as long as 20 years. Shorter terms cost less overall but come with higher monthly payments.
• Loan fees: None of the lenders on Credible charge application or origination fees, but it's still worth checking for late fees or other charges.
• Cosigner requirements: If you don't meet a lender's credit or income criteria, you may need a cosigner. Some lenders also offer cosigner release after a set number of on-time payments.

Take time to review the full loan details, not just the monthly payment, so you understand the total cost and any borrower benefits included, like deferment options or unemployment protection.