Deciding when to refinance your student loans comes down to whether you qualify for a lower interest rate. Typically, you need to graduate school before you can apply for a student loan refinance — although there are a few lenders that offer refinancing to those who didn’t earn a degree.

It is generally best to avoid refinancing your federal student loans if you want access to government protections like income-driven repayment and loan forgiveness. However, borrowers who don’t qualify for such programs might save money by refinancing their federal debt if they can secure a lower interest rate.

You can refinance your student loans as often as you want. There are typically no fees associated with a student loan refinance, so there’s no harm in switching lenders whenever you see a lower interest rate.

Just be sure to use our refinance calculator in advance to compare rates for refinancing student loans to ensure you get the best deal.

The amount you can expect to save depends on your current loan balance, plus your new rate and term.

Let’s say you have $30,000 in private student loans with a 7% rate on a 10-year term; your monthly payment would be $348. Now, if you refinance to a 5% rate, and if your monthly payment remains around the same, you would save $4,483 in total interest charges while shaving one year off your repayment term.

While requirements vary by lender, here are some standard criteria lenders look at when assessing your level of creditworthiness:

• Your credit score. Many refinance lenders require a good to excellent FICO Score in the mid-600s or higher, although you can add a creditworthy cosigner if your credit score isn’t up to par.
• Your income. You’ll need to demonstrate you have enough funds to cover your new student loan payment. Lenders evaluate this by looking at your debt-to-income (DTI) ratio, which is all your monthly debts divided by your gross income. Many refinance lenders prefer a DTI below 50%.

Your school. In general, most lenders require that you graduate from an eligible institution to qualify for student loan refinancing — still, some lenders will work with those who didn’t complete their degree.