Best Companies to Refinance Student Loans
A Smart Way to Pay Off Your Loans
Here are some of the best companies in the business that offer student loan refinancing. Consider your student loan refinancing goals when comparing lenders. The lenders below have great products, complete with low starting interest rates, zero origination fees, favorable borrowing limits, and great customer service (based on mystery shopper phone calls).
Consider your student loan refinancing goals when comparing lenders to find the right student loan refinance solution for you. When it comes to student loan refinancing, there is no one company that is the right fit to every borrower.
Best Student Loan Refinance Lenders
SoFi Student Loan Refinance
Features of a SoFi student loan refinance include:
- No origination fee
- No prepayment penalty or other hidden fees
- Unemployment protection
- Variable and fixed rates available
- Combine federal and private student loans
SoFi Student Loan Refinance
College Ave Student Loan Refinance
Features of a College Ave student loan refinance include:
- Choose how long you take to repay your loan
- No application or origination fees
- Refinance up tp $300,000
- Variable and fixed rates available
- Combine federal and private student loan together
College Ave Student Loan Refinance
Iowa Student Loan Refinance
Features of an Iowa student loan refinance:
- Fixed rate refinance loans
- No origination, prepayment or late fees
- Policies created to benefit borrowers and their families
- Multiple repayment options
- No obligation quote in minutes with no impact to your credit score
PenFed Student Loan Refinance
Features of a PenFed student loan refinance:
- Spouses can refinance their loans together
- No fees or prepayment penalties
- Work with a personal loan advisor through every step of the process
- Parents can refinance their student loans
- Choose from multiple repayment terms
PenFed Student Loan Refinance
Nelnet Bank, Member FDIC Student Loan Refinance
Features of a Nelnet Bank, Member FDIC student loan refinance:
- See the rate you qualify for in as little as two minutes
- Refinancing for undergraduate, graduate, MBA, law school and health professions
- Minimum income $36,000
- Cosigner release available
- No application or prepayment fees
Nelnet Student Loan Refinance
Discover Student Loan Refinance
Features of a Discover student loan refinance:
- 0.25% interest rate reduction while enrolled in automatic payments
- Choice of fixed or variable interest rate
- Never a penalty for prepaying
- No prepayment, origination, or application fees
- Refinance federal and private student loans
Discover Student Loan Refinance
Best Companies for Parent Student Loan Refinance
Best Companies for Refinancing Medical School Loans
Best Companies for Refinancing Student Loans While In School
Best Companies for Refinancing Graduate School Loans
Best Companies to Refinance With No Degree
Best Companies for Refinancing Law School Loans
Best Student Loan Refinance Rates
The best student loan refinance rates start at around 1.74%. When it comes to finding the best loan and low rates, there are many things to consider. The best rate you will qualify for will likely be a variable interest rate. Variable interest rates fluctuate with the market, so while your initial variable rate may be low, keep in mind that it could increase over time, which will increase your monthly payment amount as well.
The lowest fixed rates are typically higher than the lowest variable rate but will stay the same for the life of the loan. Better rates are offered to borrowers who have stronger FICO® scores and meet the qualifications as determined by each lender. Some borrowers choose to apply with a strong creditworthy cosigner to improve their loan rates.
Student Loan Refinance Calculator
Using a student loan refinance calculator can help you estimate your new monthly payment amount and total cost of the loan. The calculator below allows you to add multiple loans and see the impact refinancing can make.
|Loan Type||Amount Borrowed||Current Payment||Current Term||Total Cost of Loan|
This calculator is provided for informational purposes only. Calculated results are based on many factors, including the assumptions provided by the user. We cannot and do not provide any guarantees, conditions or warranties as to result accuracy or applicability to the user’s particular circumstances. It is the responsibility of the user to verify that all of the output and resulting calculations are correct. This calculator should not be used by anyone to make material financial decisions and should be used solely for informational purposes. Actual terms will be set by your lender or your school. We encourage any user to seek personalized advice from qualified professionals regarding all personal finance issues. The results of this calculator are not based on any information provided by or an affiliation with any school.
Best Way to Refinance Student Loans
The best way to refinance your student loans is to look for a lender that offers competitive interest rates, fees, and loan benefits. You can scroll up to see our lineup and get started.
And you can learn the steps to complete the refinance process in our How To section.
Some quick words of advice. You may want to start with an understanding of your credit history. Know where you stand in terms of your credit score and which items are listed on your report. If there is any inaccurate information you will want to resolve this, so it doesn’t get in the way of qualifying for the loan. You can get a free copy of your credit report at AnnualCreditReport.com. The free report will not include your actual score, just the items contained on your credit history. However, you can purchase copies of your report with the score included through Equifax, Experian, or TransUnion.
Pros and Cons of Refinancing Student Loans
Here are some pros and cons to consider regarding student loan refinancing. You should look at what you’ll potentially gain versus any downside. This boils down to the problem you are trying to solve, along with any financial benefits, as well as an honest review of whether you’d be sacrificing any federal benefits. (This applies if you include federal student loans in your refinance loan.)
|Problem You're Trying to Solve||Is Refinancing Worth It?|
|You're looking to reduce your interest rate||Yes. Even with lower loan balances, reducing your annual percentage rate (APR) can help you save money.|
|You have multiple loans and you want to simplify repayment||Yes|
|You want to release your cosigner||Yes|
|You want to transfer your parent loan debt to your child||Yes. But you should know that your child will need to apply for the refinanced loan and pass a credit check on their own merit.|
|You need to reduce your monthly payment||Yes. However, if you have federal loans and think you mat qualify for an income driven repayment plan, you may want to research your options.|
|You have federal student loans and you're pursuing a public-service career, or an occupation in a national/regional shortage area||Maybe not. At least not where your federal loans are concerned. You should do some homework on student loan forgiveness programs to understand if you qualify.|
Student Loan Consolidation vs. Refinancing
The following table highlights the key difference between student loan consolidation and student loan refinancing.
|Direct Consolidation||Student Loan Refinancing|
|Combine 2 or more federal student loans together (with a few exceptions to consolidate a single loan)||Can combine both private and federal loans together|
|Interest rate is simply the weighted average of all federal loans, rounded up to the nearest 1/8th percent||Allows you to lower your interest rate and take advantage of competitive offers|
|Remains a federal student loan||Single loans can be refinanced|
|Provides an option for parents to refinance in the child's name|
|Refinanced federal loans are no longer eligible for benefits under the federal student loan program|
When to Refinance Student Loans
The best time to refinance your student loans is when interest rates are low, you have an established credit history or a creditworthy cosigner, and you have stable employment. Rates for November 2021 are as low as 1.74%. Also, most lenders require that you are no longer enrolled in school to be eligible. In other words, you would have either graduated or left school. This also means the time to refinance is when you are employed.
Refinance Private Student Loans
Refinancing your private student loans can be a great way to reduce your interest rate and qualify for different repayment terms. This includes combining your existing student loans (private and/or federal—your choice) into one private student loan. It also can mean refinancing a single loan. A credit check is required to qualify.
Frequently Asked Questions
How Do You Qualify for a Student Loan Refinance?
To qualify for student loan refinance, you will need to meet the lender’s minimum eligibility criteria. This varies from one company to another. For example, some lenders may only refinance loans for students who have obtained a degree or live in certain states. With that in mind, here are some of the more common factors lenders use to evaluate applicants:
- Credit score - Lenders typically have a minimum credit score (for example: a FICO of around 670) that borrowers must meet to qualify for a loan. A higher credit score usually means a lower interest rate.
- Credit history - Lenders examine your credit history to determine if you are creditworthy.
- Income - Many lenders have a minimum income that borrowers must meet.
- Debt-to-income ratio – Your lender will review how much outstanding debt you already have and compare that to your income.
- Minimum loan amount - Many lenders require borrowers to have at least $5,000 to refinance.
- Maximum loan amount – Some lenders may limit how much they are willing to refinance for you. Each lender may have different maximum loan amounts depending on the type of your degree.
Should I Refinance My Student Loans?
You should consider refinancing your student loans if your monthly payments are unmanageable, you want to lower your interest rate, or you want a new repayment term for a single loan with a large balance. Of course, any or all of these could apply. Refinancing allows you to accomplish some key goals, including:
- Lower your interest rate. You may qualify for a rate that is lower and more competitive than what you’re paying today, which could potentially save you thousands of dollars during repayment.
- Reduce your monthly payment. By extending your repayment term, from 10 years to perhaps 15 years or more, your monthly payment could go down.
- Eliminate the hassle of paying multiple parties. Refinancing could help you can reduce the stress of paying multiple loan servicers, as well as the risk of forgetting to pay one of your loans.
- Contribute more savings. With additional wiggle room in your monthly budget, you can set aside money for an emergency fund or short-term savings. Because life happens.
- Release a cosigner. If you needed a cosigner to help you qualify for an in-school loan (such as a private loan), refinancing your debt is a way to release your cosigner.
- Continue to leverage tax deductions. Interest paid on a refinanced student loan may still qualify for a federal income tax deduction, subject to limitations on Adjusted Gross Income.
- No prepayment penalties. Private student loan lenders, including our partners that offer refinancing, do not charge a prepayment penalty.
How Often Can You Refinance Student Loans?
You can refinance your student loans multiple times, like refinancing a house. As market rates change or decrease, you may want to take advantage of lower rates. And you can refinance an existing loan that was previously refinanced. There are virtually no limits on the number of times you can refinance. However, you should keep in mind that you hit reset on the repayment clock each time. This means you start over at the beginning of a new repayment term, whether that’s 10, 12, 15 years or longer. You can always ask for a shorter term.
Another option if your refinance loan lowers your monthly payment and extends your repayment term, is to pay more than your monthly payment and ask for that overpayment be applied to your principal balance. You just want to confirm that there are no prepayment penalties on your loan.
Can I Refinance Federal Student Loans?
Yes, you can refinance federal student loans. In fact, you can either include your federal loans with any private loans you have. Or you can simply refinance federal loans on their own. The benefits associated with refinancing include qualifying for a lower interest rate. Currently, you cannot lower your interest rate under a federal Direct Consolidation Loan. But before you pull the trigger on refinancing federal loans, be clear about the benefits you may be giving up in the federal program, including deferment options and potential loan forgiveness (assuming you meet the criteria).
What Does it Mean to Refinance Student Loans?
Refinancing your student loans means combining multiple loans into one so that you can have a single monthly payment, along with a new repayment term. It can also mean potentially qualifying for a lower interest rate. On top of that, you can refinance a single loan in order to achieve more favorable terms. You will need to pass a credit check in order to qualify.
Another aspect of refinancing is that you can combine both federal and private student loans together. In fact, you can only achieve that through refinancing with a private lender. The Direct Consolidation Loan program does not offer this. We highly encourage you to examine whether you are giving up benefits that are unique to the federal student loan program before doing including federal loans in a refinance.
Student Loan Refinance With Cosigner
It may be a smart move to apply for student loan refinancing with a cosigner. Here are the primary reasons. First, it could help you qualify for the loan in the first place since you must demonstrate that you are creditworthy with proof of income. If your work history or credit history is not strong enough, lenders may encourage you to apply with a creditworthy cosigner to qualify. Second, applying with a cosigner who will be jointly liable for the loan increases the lender’s confidence in your ability to meet your payment obligations. And the better your cosigner’s credit history, the lower the rate you may qualify for. So, there is an added financial incentive for you to add a cosigner.
Another thing to consider is the unexpected. It simply helps to have someone who has your back in the event you have difficulty making your payments. A cosigner is equally responsible for the loan, and therefore has a bigger commitment to step in and help if you fall on hard times. Some lenders do offer a cosigner release option on refinanced student loans after you meet a defined number of on-time, qualifying payments. Plus, you’ll need to pass a new credit check in your own name. But this means having a cosigner does not have to be permanent.
Can You Refinance Student Loans While In School?
Most lenders will not allow you to refinance your student loans while you are still in school. Most lenders require that you complete your degree, or that your loans are in their grace period or you’re no longer enrolled on a half-time basis or more. Policies vary by lender.
Learning how to refinance your student loans is as easy as following some basic steps. It will take a little time to complete, but the process is straightforward.
- Decide which loans you want to include in your refinance. This can include both federal and private student loans.
- Look for a lender that offers the types of features you need.
- Apply for the loan and add a cosigner, if needed. You can also get pre-qualified and find your rate prior to making a commitment.
- Submit verification documents
- Be on the lookout for final disclosure statements to be signed
- Continue making your regular monthly payments until your new lender confirms your existing loans have been paid in full.
Can You Refinance Student Loans Without a Degree?
Some lenders will allow you to refinance your student loans without a degree. Others will require degree completion. And some lenders may ask you to specify which school you attended since their refinance loans may only be available to former students from select colleges or universities. You will need to confirm your eligibility with your potential lender.
Can You Consolidate Private Student Loans?
Private student loans can be refinanced (consolidated) with a private lender. Typically, consolidation is the term used when referring to the Direct Consolidation Loan program, which is only available for federal student loans. Private student loan refinancing on the other hand, sometimes referred to as private student loan consolidation, allows you to combine private and/or federal student loans into one new loan with a private lender.
Can You Consolidate Private and Federal Student Loans?
If you are interested in consolidating your federal AND private student loans at the same time, then you will want to check out student loan refinancing through a private lender. It is the only way to combine both types of loans together. Private student loans are not eligible for federal student loan consolidation, which only allows you to combine eligible federal student loans into a federal Direct Consolidation Loan.