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When Should You Refinance Student Loans
It's smart to refinance private student loans as soon as you can get a better deal than you currently have.
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Cecilia Clark Assistant Assigning Editor | Education financing products, Veteran's benefits, Student and graduate finances
Cecilia Clark is an editor on the loans team. She specializes in student loans and manages product reviews and roundups. Previously, she worked as a freelance writer and developed communications strategies for cybersecurity firms. Cecilia has also worked in post-secondary education, elevator operations management and sales and military nuclear command control, maintenance management and public affairs.
Karen Gaudette Brewer Lead Assigning Editor | Core Personal Finance
Karen Gaudette Brewer leads the Core Personal Finance team at NerdWallet. Previously, she guided students and their families through the ins and outs of paying for college and managing student debt on the Higher Education team. Helping people navigate complex money decisions and feel more confident brings her great joy: as the daughter of an immigrant, from an early age she was the translator of financial documents and the person who called the credit card company to fix fraud.
She joined NerdWallet with 20 years of experience working in newsrooms and leading editorial teams, most recently as executive editor of HealthCentral. She launched her journalism career with The Associated Press and later worked for The (Riverside) Press-Enterprise, The Seattle Times, PCC Community Markets and Allrecipes.com.
She is a graduate of the 2022 Poynter Institute Leadership Academy for Women in Media. Her writing has been honored by the Society for Features Journalism and the Society of Professional Journalists. In addition, she’s the author of two books about the Pacific Northwest.
Generally, the sooner you refinance student loans, the better.
When you refinance, a lender pays off your existing loans with a new one at a lower interest rate. That can save you money in the long run — and from the very first payment.
When to refinance student loans depends on whether you’ll find a rate that makes a difference in your life. A $30,000 private student loan with an 8% interest rate, for example, will give you a $364 monthly payment over 10 years. Refinancing to a 10-year loan term at 5% interest will save you $5,494 in total and $46 per month — enough to make a dent in an electricity, cable or phone bill.
Refinancing private student loans can be an easier decision if your credit score and income can qualify you for lower interest rates.
Not everyone can qualify to refinance student loans. You typically need a college degree, good credit and an income that lets you comfortably afford your expenses and debt payments. If you meet these requirements, consider refinancing in these circumstances:
The savings will make a difference. It’s not necessary to wait until you have perfect credit to refinance, as long as you can qualify for a better rate than you have now. See if the lender offers a student loan refinance bonus, to boost your savings even more.
You have private student loans. You pretty much have nothing to lose by refinancing private student loans because these loans aren’t eligible for federal loan programs that can lower your monthly payment or put you on track for loan forgiveness.
You have student loans with high variable rates. It can be difficult to predict payments with a variable rate loan, and even loans with low variable rates can get more expensive to repay. Before they rise, consider refinancing to lock in a fixed rate.
The rate environment is strong. Both fixed and variable private loan refinancing rates can change based on economic factors, like the Federal Reserve hiking or cutting rates. When rates are pushed down, you may want to take advantage of the situation by refinancing.
Your finances have improved. If refinancing doesn’t make sense right when you graduate, consider it once you’re on sturdier financial footing. And if you previously refinanced but just paid off some credit card debt or got a raise, for example, you may now get a better rate — you can refinance as often as you want.
Readers also ask
Should you refinance student loans?
You should refinance your student loans if you would save money, you can qualify and your finances are stable. To qualify for the lowest rates — and the biggest savings — you’ll need an excellent credit score, clean credit history and enough income to support your debts and expenses.
If you have federal loans and are struggling to make consistent payments, refinancing would disqualify you from more helpful programs. Instead, consider federal student loan consolidation or an income-driven repayment plan.
You can refinance student loans as often as you’d like. If you’ve already refinanced and your credit has recently improved, consider refinancing again to lock in a lower rate. There are no application or origination fees, so refinancing won’t cost you anything.
Yes, if you qualify for a lower interest rate. With a lower rate, you’ll have a lower monthly payment, freeing up cash for other expenses. You could also choose a shorter repayment schedule, which will help you become debt-free faster and save money in interest long-term.
You're pursuing student loan forgiveness. Refinancing federal loans makes them ineligible for federal loan programs including Public Service Loan Forgiveness and Teacher Loan Forgiveness.
You recently declared bankruptcy. It's not impossible to refinance student loans if you've declared bankruptcy, but it's more difficult. Many lenders require that a certain amount of time — anywhere from four to 10 years — must have passed since your bankruptcy.
NerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.20% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Variable rates range from 6.14% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.
650
5.89-
9.74%
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.20% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Variable rates range from 6.14% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.
NerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Interest Rates: Eligibility and Important Details. Fixed rates range from 3.54% APR to 15.99% APR with 0.25% autopay discount. Variable rates range from
5.54% APR to 15.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates are capped at 17.95%. SoFi
rate ranges are current as of 11/20/24 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term
and type of repayment option you select, evaluation of your creditworthiness, income, presence of a co-signer (if applicable) and a variety of other factors. Lowest rates
reserved for the most creditworthy borrowers. Check out our eligibility criteria at https://www.sofi.com/eligibility-criteria/. For the SoFi variable-rate product, the
variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month,
rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The
SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or
checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit
lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org) UNDERGRAD LOANS: This repayment example is based on typical loan terms for a freshman borrower who selects the Partial Payment option with a 10-year repayment
term, a $10,000 loan that is disbursed in a single disbursement, a 0.25% autopay discount, and a fixed rate between 8.26% – 13.23% Annual Percentage Rate (“APR”)
(with autopay). It also assumes the borrower remains in school for 4 years and has a 6-month grace period (together, the deferment period) before the loan term begins. It works out to 54 monthly payments of $25 during the deferment period, followed by 120 monthly payments ranging from $158.13 – $244.80 while in the repayment period, for a total amount of payments ranging from $20,325.32 – $30,726.15. This repayment example assumes that the borrower is signed up for autopay and that all payments are made on time, with no pre-payments. Terms and conditions apply. Offer good for new and repeat borrowers that apply for and are approved for a SoFi Private Student Loan. To receive the offer, you must: (1) complete a loan application with SoFi between 11/11/24 12:01AM PT to 01/30/25 11:59PM PT; and (2) meet SoFi’s underwriting criteria. Once conditions are met and the loan has been disbursed, the interest rate shown in the Final Disclosure Statement will include an additional 0.25% rate discount. Offer cannot be combined with any other rate discounts, with the exception of the 0.25% AutoPay rate discount. SoFi reserves the right to change or terminate the Rate Discount Program to unenrolled participants at any time with or without notice. The SoFi 0.25% autopay interest rate reduction requires payments by an automatic monthly deduction from a savings or checking account. This benefit is suspended during periods of non-payment through ACH, deferment and forbearance. Autopay is not required to receive a loan from SoFi.
650
5.54-
15.99%
Interest Rates: Eligibility and Important Details. Fixed rates range from 3.54% APR to 15.99% APR with 0.25% autopay discount. Variable rates range from
5.54% APR to 15.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates are capped at 17.95%. SoFi
rate ranges are current as of 11/20/24 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term
and type of repayment option you select, evaluation of your creditworthiness, income, presence of a co-signer (if applicable) and a variety of other factors. Lowest rates
reserved for the most creditworthy borrowers. Check out our eligibility criteria at https://www.sofi.com/eligibility-criteria/. For the SoFi variable-rate product, the
variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month,
rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The
SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or
checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit
lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org) UNDERGRAD LOANS: This repayment example is based on typical loan terms for a freshman borrower who selects the Partial Payment option with a 10-year repayment
term, a $10,000 loan that is disbursed in a single disbursement, a 0.25% autopay discount, and a fixed rate between 8.26% – 13.23% Annual Percentage Rate (“APR”)
(with autopay). It also assumes the borrower remains in school for 4 years and has a 6-month grace period (together, the deferment period) before the loan term begins. It works out to 54 monthly payments of $25 during the deferment period, followed by 120 monthly payments ranging from $158.13 – $244.80 while in the repayment period, for a total amount of payments ranging from $20,325.32 – $30,726.15. This repayment example assumes that the borrower is signed up for autopay and that all payments are made on time, with no pre-payments. Terms and conditions apply. Offer good for new and repeat borrowers that apply for and are approved for a SoFi Private Student Loan. To receive the offer, you must: (1) complete a loan application with SoFi between 11/11/24 12:01AM PT to 01/30/25 11:59PM PT; and (2) meet SoFi’s underwriting criteria. Once conditions are met and the loan has been disbursed, the interest rate shown in the Final Disclosure Statement will include an additional 0.25% rate discount. Offer cannot be combined with any other rate discounts, with the exception of the 0.25% AutoPay rate discount. SoFi reserves the right to change or terminate the Rate Discount Program to unenrolled participants at any time with or without notice. The SoFi 0.25% autopay interest rate reduction requires payments by an automatic monthly deduction from a savings or checking account. This benefit is suspended during periods of non-payment through ACH, deferment and forbearance. Autopay is not required to receive a loan from SoFi.
NerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
4.89-
9.04%
See LendKey's full terms and conditions at https://www.lendkey.com/disclaimers
680
5.54-
9.12%
See LendKey's full terms and conditions at https://www.lendkey.com/disclaimers
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
NerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
4.88-
8.44%
Subject to credit approval. Terms and conditions apply. https://www.elfi.com/terms/
680
4.86-
8.49%
Subject to credit approval. Terms and conditions apply. https://www.elfi.com/terms/
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
NerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Splash Financial, Inc. (NMLS # 1630038) reserves the right to modify or discontinue products and benefits at any time without notice. The information you provide is an inquiry to determine whether Splash’s lending partners can make you a loan offer, but does not guarantee you will receive any loan offers. Terms and conditions apply. Products may not be available in all states. These rates are subject to change at any time. If you do not use the specific link included on this website, offers on the Splash website may include other offers from lending partners that may have a higher rate. Fixed Rate options range from 5.94% APR - 8.95% APR (without autopay). Variable rate options range from 7.60% APR (with autopay) to 7.85% APR (without autopay). Variable APRs and amounts subject to increase or decrease. Lowest rates are reserved for the highest qualified borrowers and may require an autopay discount of 0.25%. Some of the rates are based on the one-month London Interbank Offered Rate (“LIBOR”) index and some are derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). Fixed loans feature repayment terms of 5 to 20 years. For example, the monthly payment for a sample $10,000 with an APR of 7.50% for a 10-year term would be $118.70. Variable loans feature repayment terms of 5 to 20 years. For example, the monthly payment for a sample $10,000 with an APR of 7.85% for a 5-year term would be $202.05.
650
7.60-
7.85%
Splash Financial, Inc. (NMLS # 1630038) reserves the right to modify or discontinue products and benefits at any time without notice. The information you provide is an inquiry to determine whether Splash’s lending partners can make you a loan offer, but does not guarantee you will receive any loan offers. Terms and conditions apply. Products may not be available in all states. These rates are subject to change at any time. If you do not use the specific link included on this website, offers on the Splash website may include other offers from lending partners that may have a higher rate. Fixed Rate options range from 5.94% APR - 8.95% APR (without autopay). Variable rate options range from 7.60% APR (with autopay) to 7.85% APR (without autopay). Variable APRs and amounts subject to increase or decrease. Lowest rates are reserved for the highest qualified borrowers and may require an autopay discount of 0.25%. Some of the rates are based on the one-month London Interbank Offered Rate (“LIBOR”) index and some are derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). Fixed loans feature repayment terms of 5 to 20 years. For example, the monthly payment for a sample $10,000 with an APR of 7.50% for a 10-year term would be $118.70. Variable loans feature repayment terms of 5 to 20 years. For example, the monthly payment for a sample $10,000 with an APR of 7.85% for a 5-year term would be $202.05.
