You can refinance both your federal student loans and your private student loans through a private lender, such as a bank or credit union. Refinancing your loans will combine all of them into one loan with one monthly payment. Your interest rate will be based off of your credit score, so if it’s higher than when you first applied, you should score an incredibly low rate.
If you’re planning on taking advantage of federal loan forgiveness programs, you may not want to refinance your federal loans. Refinancing your federal student loans will disqualify you from any forgiveness programs. However, if you are ineligible for loan forgiveness, a refinance is the best way to lower your payments. To help determine if refinancing is right for you use our student loan refinancing calculator below.
How long does it take? 5-10 minutes
Shop around with multiple lenders
Provide some basic info to get rate quotes
You can shop for lenders online, getting quotes in a few minutes without affecting your credit.
How long does it take? 5 minutes
Make sure that refinancing is right for you
Review FAQs about refinancing below
Be certain you won’t need any of the federal student loan programs that you’ll lose access to after refinancing.
How long does it take? Take your time with this step
Pick your best offer
Base your pick on rates and other features (such as repayment protections)
How long does it take? 2-3 weeks
Upload your documents (and those of your cosigner, if any)
Sit back and wait for approval
Keep making payments on your loans until the refinance process is complete
When you refinance student loans, you take out a new loan from a private lender to pay off one or more of your old loans. If you qualify, you could snag a lower interest rate on this new loan. You can also choose new repayment terms to pay off your debt faster, or lower your monthly bills.
Both private and federal student loans that were used at a qualifying institution are eligible for refinancing. A qualifying institution typically means a Title IV-accredited school in the United States.
You must be the primary borrower on any loans you wish to refinance. A lender might also require that you’ve already earned your degree, or are close to earning your degree. Some lenders also state a minimum loan amount for refinancing.
You can refinance one or more federal and/or private student loans, but you must meet a lender’s requirements for credit and income. Most lenders look for a credit score of 650 or higher, along with a steady source of income or an offer of employment. If you can’t meet these criteria on your own, you could qualify by applying with a creditworthy cosigner, such as a parent.
Along with your credit score and annual income, some lenders also look at your savings and debt-to-income ratio. Finally, some lenders require proof of graduation, as they’ll only approve borrowers who have obtained their degree. If you left school before graduating, there are relatively few student loan refinance providers that will work with you.
Although refinancing can simplify your debt by combining multiple loans into one, it’s different from federal student loan consolidation. You refinance student loans with a private lender, but you consolidate loans by taking out a direct consolidation loan from the federal government.
Federal consolidation combines federal student loans into one new loan, and it lets you choose new repayment terms. But it doesn’t lower your interest rate, so you won’t save money on interest-only student loan refinancing helps you lower your rate, if you qualify.
Many student loan refinance companies offer the option to borrow at fixed and variable rates. It’s important to understand the differences between these rate types before you choose your ultimate loan.
Yes, there’s no hard-and-fast rule on the amount of times you can refinance student loans — you might decide to refinance with your current lender, or switch to another.
Refinancing a second time could make sense if your financial situation has improved to the point where you could score a significantly lower interest rate. If you extend your loan term as part of refinancing again, though, you’re likely to lose — not save — money until your balance hits zero.
Compare your current loan to your potential refinanced loan using our student loan refinancing calculator.
Refinancing student loans with bad credit is difficult but not impossible. One way to circumvent the underwriting criteria of lenders is to attach a cosigner to your refinancing application. If your cosigner has a good enough credit score, debt-to-income (DTI) ratio and other characteristics, it could be enough to net you a stamp of approval. Just keep in mind that cosigning is a big responsibility, as you and your cosigner would be held equally responsible for repayment.
If you have bad credit but can’t find a cosigner, it could take longer to qualify for student loan refinancing. You might decide to build a positive credit history, improve your cash flow and reapply for refinancing down the road, when you’re more likely to meet lender requirements.
Before refinancing your student loans, make sure you’re in a financially secure position to pay them back on time, and have the credit score (or a creditworthy cosigner) to qualify for competitive rates.
It can also be a good time to refinance when interest rates are low. Note that if interest rates drop, you can consider refinancing again for better terms.
Finally, make sure you don’t need any federal plans or protections before you refinance. Once you refinance federal loans with a private lender, you’ll no longer have access to federal plans, such as income-driven repayment or federal forgiveness programs.
The lowest student loan refinance rates advertised by lenders are awarded to the most creditworthy applicants. Your creditworthiness is determined by your credit history and score, DTI ratio and other financial factors. If you fall short in any of these underwriting categories, you could lean on a cosigner to help you qualify and secure a lower APR.
Besides improving your application, another way to net the lowest possible interest rate is to make sure you’re shopping around with reputable lenders. Not all banks, credit unions and online companies start their fixed and variable rate ranges as low as industry leaders. So be sure to narrow your list of potential lenders to those that offer competitive APRs.
Usually no. Many lenders do not charge origination, application or disbursement fees for refinancing student loans. If you’re not sure, ask your lender about its fee structure before you refinance.
Note that when you refinance student loans, you can choose to extend your repayment terms. Opting for a long term can result in higher interest costs over the life of your loan. If you want to reduce the amount you pay in interest, consider selecting a shorter repayment term.
Applying for any new loan can knock a few points off your credit score, but on-time payments will improve your score over time. New credit applications only account for about 10% of your FICO Score, whereas your payment history makes up 35%.
Many refinancing lenders let you shop around with no impact on your credit score. With prequalification, you can compare rates before submitting a full application and consenting to a hard credit inquiry.
Since you’ll be refinancing your current loans rather than taking on new debt, your DTI ratio should not be affected.
You should consider refinancing if your finances are stable and you’re able to qualify (or have a qualifying cosigner). Refinancing is best for borrowers who are looking to lower their interest rate, restructure their debt or combine multiple loans into one. Since refinancing is typically done through a private institution, you should only refinance federal loans if you don’t need federal repayment plans or programs.
If you’re looking to combine several federal student loans into one loan, consider direct loan consolidation. This federal option helps you simplify repayment, and apply for a new repayment plan, but it won’t result in a lower interest rate. Also check out direct loan consolidation if you want to combine your federal loans while maintaining access to federal repayment plans.
