Refinancing your student loans may result in a lower interest rate and smaller monthly payments. Refinancing is not always a good choice.
If you have federal Student loans, refinancing has drawbacks that you should consider. You’ll also need to examine student Loan firms and their terms to get the best bargain.
1. Best overall: SoFi Student Loan Refinancing
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Eligible borrowers
Undergraduate and graduate students, parents, health professionals
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Loan amounts
$5,000 minimum (or up to state); maximum up to cost of attendance
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Loan terms
Range from 5 to 15 years; up to 20 years for refinancing loans
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Loan types
Variable and fixed
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Borrower protections
Forbearance options like unemployment protection are available
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Co-signer required?
No
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Offer student loan refinancing?
Yes – click here for details
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Offer parent loan?
Yes – click here for details
Pros
- High loan amount
- You can select between variable and fixed rates.
- Borrowers have hardship protection.
- No co-signer is necessary.
- There are no origination, application, or prepayment costs.
- 0.25% interest rate reduction for autopay.
- SoFi members receive career coaching, financial guidance from planners, and a 0.125% interest rate discount on any additional SoFi lending product, including student loan refinancing.
- Accepts in-school payments.
Cons
- Non-cosigned loans typically carry higher interest rates.
- There are no co-signer release options available.
- Loan size minimum of $5,000.
Who is this for? SoFi is a well-known name in the Student Loan Refinancing industry, particularly for its member benefits. Member incentives include referral bonuses, rate discounts on other SoFi loans, premium vacation offers, tailored career advice, financial planning from real-life advisors, and an unemployment protection program that allows you to adjust your loan payments temporarily.
2. Best for fair credit score: Earnest
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Eligible borrowers
Undergraduate and graduate students, parents, half-time students, international and DACA students
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Loan amounts
$1,000 minimum (or up to state); maximum up to cost of attendance
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Loan terms
Range from 5 to 15 years
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Loan types
Variable and fixed
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Borrower protections
9-month grace period
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Co-signer required?
No
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Offer student loan refinancing?
Yes – click here for details
Pros
- Applicants with acceptable credit may qualify.
- High loan amount
- You can select between variable and fixed rates.
- Borrowers have hardship protection.
- No co-signer is necessary.
- There are no origination or prepayment fees.
- 0.25% interest rate reduction for autopay.
- Qualified borrowers can skip one payment every 12 months and make it up later.
- Offers student loan refinancing.
- Accepts in-school payments.
Cons
- Non-cosigned loans typically carry higher interest rates.
- There are no co-signer release options available.
- Variable rates are not accessible everywhere.
Who is this for? Earnest is ideal for consumers with fair credit because the lender accepts applications with a minimum FICO score of 650. Earnest also offers debtors the option of skipping one payment per year without incurring penalties.
3. Best for having a co-signer: Citizens
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Eligible borrowers
Undergraduate and graduate students, parents
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Loan amounts
$150,000 maximum, or cost of attendance, whichever is lower
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Loan terms
Range from 5 to 15 years
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Loan types
Variable and fixed
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Borrower protections
Forbearance options available
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Co-signer required?
No
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Offer student loan refinancing?
Yes – click here for details
Pros
- Flexible repayment arrangements
- You can select between variable and fixed rates.
- Borrowers have hardship protection.
- No co-signer is necessary.
- Offers cosigner release.
- There are no origination, application, or prepayment costs.
- Autopay offers up to 0.50% interest rate savings.
- Offers student loan refinancing.
- Accepts in-school payments.
Cons
- Non-cosigned loans typically carry higher interest rates.
- The loan amount is limited to the maximum of $150,000 or the cost of attendance, whichever is lower.
Who is this for? Citizens is ideal for adding a co-signer to a refinanced student loan. Borrowers can petition to have a co-signer released from their student loan after making 36 consecutive on-time principal and interest payments. Citizens offers a larger rate reduction of up to 0.50% for enrolling in autopay, compared to lenders’ regular 0.25% discount.
4. Best for parent loan refinancing: Education Loan Finance Student Loan Refinancing
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Cost
No origination fees to refinance
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Eligible loans
Federal, private, graduate, and undergraduate loans, Parent PLUS loans
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Loan types
Variable and fixed
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Variable rates (APR)
From 5.28%
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Fixed rates (APR)
From 5.48%
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Loan terms
From 5 to 20 years for student loan refinancing; 5, 7, or 10 years for parent loan refinancing
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Loan amounts
From $10,000
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Minimum credit score
N/A
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Minimum income
N/A
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Allow for a co-signer
Yes
Pros
- No application, refinance, or loan guarantee costs.
- An autopay discount has already been applied.
- When you prequalify, you will receive a soft credit draw.
- There are no prepayment penalties.
- Protections include: Deferment in which they synchronize your repayment start date with the expiration of the grace period on the federal student loans that you are refinancing, financial hardship or medical problems forbearance for up to 12 months
- Provides parent loan refinancing. Allows you to combine private and Parent PLUS loans.
- Borrowers are assigned a Personal Loan Advisor to help them.
- According to the website, consumers save an average of $278 every month and are expected to save a total of $20,774.
- Offers a bonus referral program
Cons
- No grace period is offered.
- There are no co-signer release options available.
- The late charge fee is the lesser of 5% of the past due amount or $50.
- Returned check or insufficient funds fee of $30
- Loan size minimum of $10,000.
Who is this for? ELFI stands out because it allows borrowers to combine private and Parent PLUS loans, and parents can refinance to move the student loan into their child’s name. ELFI also provides student loan consultants to help borrowers navigate the refinancing process.
5. Best for medical school loan refinancing: Laurel Road Student Loan Refinancing
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Cost
No origination fees to refinance
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Eligible loans
Federal, private, graduate and undergraduate loans, Parent PLUS loans, medical and dental residency/fellowship loans, plus special pricing and reduced rates for health-care professionals (physicians, dentists, optometrists and physician assistants)
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Loan types
Variable and fixed
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Variable rates (APR)
From 5.49%
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Fixed rates (APR)
From 5.44%
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Loan terms
5, 7, 10, 15, 20 years (but also offers any term below 20 years, subject to underwriting criteria)
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Loan amounts
For bachelor’s degrees and higher, a minimum of $5,000; for eligible associate degrees in the healthcare field, up to $50,000 in loans for non-ParentPlus refinance loans
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Minimum credit score
N/A
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Minimum income
N/A
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Allow for a co-signer
Yes
Pros
- There are no origination fees for refinancing, and the 0.25% autopay discount is already applied.
- When you prequalify, you will receive a soft credit draw.
- No prepayment penalties.
- Protections include financial hardship (such as job loss). forbearance for one or more 3-month periods (with a minimum of 12 months in between periods), COVID forbearance of three monthly payments (with the option of requesting longer), natural disaster forbearance of up to two monthly payments, and deferment for medical students up to six months after their residency and fellowships (the total loan term including residency, fellowship, and grace period must not exceed 20 years).
- Medical students pay only $100 per month while in the residency program or fellowship.
- Graduates with associate degrees in the healthcare profession can refinance.
- Referral program offers up to $400 bonus.
Cons
- There are no co-signer release options available.
- A late fee may be imposed if any part of a payment is not received within 15 days of the due date. shall not exceed 5% of the late payment or $28, whichever is less.
- You may be charged $20 for any payment (whether a cheque or an electronic payment) that is returned unpaid due to insufficient funds or a closed account.
- Loan size minimum of $5,000.
Who is this for? Laurel Road is a leading student debt refinance lender, particularly for medical students. Borrowers in residency pay only $100 per month, and accrued interest does not compound. Separately, Laurel Road has student loan professionals accessible for free consultations.
Overview: Laurel Road is a lender with competitive rates and a strong internet presence. Borrowers can select terms of five, seven, ten, fifteen, or twenty years.
- The borrower must be a US citizen or permanent resident, or have a co-signer who is. Borrowers must also have graduated or be in good standing in the final term before graduation, as well as be working or have a job offer. Only certain associate degrees in health care are eligible; borrowers with associate degrees must be in their last semester with an offer of employment in their field or have graduated and been employed in their field. Borrowers must additionally meet extra, undefined underwriting requirements.
Laurel Road levies a late fee equal to 5% of the late payment, or $28, whichever is less. It also charges a $20 fee for insufficient cash and returned payments.
6. Best for credit union: PenFed Student Loan Refinancing
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Cost
$0; no application fee or origination fee
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Eligible loans
Federal and private graduate and undergraduate loans
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Loan types
Fixed rates
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Variable rates (APR)
N/A
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Fixed rates (APR)
4.49%-6.68% APR
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Loan terms
5, 8, 12, or 15 years
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Loan amounts
The minimum amount is $7,500 and the maximum amount is $300,000
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Minimum credit score
Not disclosed
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Minimum income
Not disclosed
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Allow for a co-signer
Yes
Pros
- Ability to examine your rate without negatively impacting your credit score
- No prepayment penalties.
- Increased maximum loan amount for refinancing.
- Online application can be completed in as little as 15 minutes.
Cons
- You must be a member to refinance your loan.
Who is this for? PenFed Credit Union is a top student debt refinance lender among credit unions because membership is widely available: anybody can join, unlike other credit unions. You only need a PenFed savings account with a $5 minimum deposit.
7. LendKey
Why is LendKey the best for comparing multiple lenders? LendKey works with a network of credit unions and banks, combining different lenders’ products to tailor your loan. This implies that you simply have to apply once to receive many offers.
- Because LendKey works with a variety of lenders, your matches determine many aspects of your loan, including your eligibility. In general, you must be a US citizen or permanent resident who has completed at least an associate degree. The minimum credit score and fees vary by lender.
Some lenders levy late or inadequate fund fees.
8. College Ave
Pros
- Co-signer release.
- Fast prequalification.
- No origination fees.
Cons
- The maximum loan amount for non-medical degrees is $150,000.
- Borrowers must have graduated.
- Relatively high starting rates.
Overview: If you want to refinance your student loans without paying any fees, College Ave is worth looking into. This lender has variable and fixed rates as low as 6.99 percent APR, and you can refinance up to $300,000 in student debt provided you hold a medical, dentistry, pharmacy, or veterinary doctorate. The maximum loan amount for any other degree is $150,000.
Why College Ave is the best for no fees: This lender does not charge any upfront fees for its loans; the only fee you may be required to pay is a late fee.
- Borrowers must be US citizens or permanent residents and at least 18 years of age. Borrowers must also have completed a Title IV undergraduate or graduate program inside College Avenue’s network.
While College Ave does not indicate the amount, you may be charged a late fee.
9. Splash Financial
Pros
- Low starting rates.
- Prequalify with several lenders at once.
- Referral bonus: $200.
Cons
- Fees and conditions differ per lender.
- A four-year degree (or associate degree in medicine) is required.
- The loan minimums and maximums differ by lender.
Borrowers must be US citizens or permanent residents. Borrowers must have completed a four-year or associate degree at a Title IV college, or be in the final semester of an associate degree in a qualifying medical profession. Other restrictions, such as a minimum credit score and income, are determined by the lender you are paired with. The same is true for possible fees.
More about our best student loan refinance firms
* SoFi: SoFi provides competitive interest rates, no application, origination, prepayment, or late fees, and customizable loan terms.
Borrowers normally need good credit to qualify for refinancing, but SoFi allows you to apply with a co-signer who fulfills the credit and income criteria.
Borrowers can refinance at either a fixed or variable rate, and signing up for autopay results in a 0.25% rate discount. SoFi also provides repayment aid to those enduring financial difficulties, including deferment and forbearance.
Eligible loans
Federal, private, graduate and undergraduate loans, Parent PLUS loans, medical and dental residency loans
Loan amounts
From $5,000; to over $10,000 for medical/dental residency loans
Loan terms
5, 7, 10, 15, 20 years
* Earnest: Earnest offers cheap variable and fixed student loan rates, as well as a 0.25% autopay rate discount. Earnest allows you to make extra or early payments at no cost. Borrower safeguards include deferment and forbearance, interest-only payments, loan forgiveness, and discharge.
Eligible loans
Federal, private, graduate and undergraduate loans
Loan amounts
A minimum of $5,000, up to $500,000 (residents of California must request to refinance $10,000 or more)
Loan terms
Flexible terms anywhere between 5 to 20 years
* Citizens: Citizens offers no costs for refinancing student loans, including application, origination, and disbursement. The lender provides variable and fixed rates.
Eligible loans
Federal, private, graduate and undergraduate loans, Parent PLUS loans, medical and dental residency loans
Loan amounts
A minimum of $10,000, up to $300,000 (bachelor’s degree or below) or $500,000 (graduate degree)
Loan terms
5, 7, 10, 15, 20 years
* ELFI: ELFI offers competitive variable and fixed rates, and the lender does not charge an application or origination fee, nor are there any prepayment penalties.
Eligible loans
Federal, private, graduate, and undergraduate loans, Parent PLUS loans
Loan amounts
From $10,000
Loan terms
From 5 to 20 years for student loan refinancing; 5, 7, or 10 years for parent loan refinancing
* Laurel Road: Laurel Road has competitive variable and fixed rates, and borrowers can receive a 0.25% autopay rate discount. The lender does not charge application, origination, or disbursement costs, and there are no prepayment penalties.
Eligible loans
Federal, private, graduate, and undergraduate loans, Parent PLUS loans, medical and dental residency/fellowship loans, as well as special pricing and lower rates for health-care professionals.
Loan amounts
For bachelor’s degrees and higher, a minimum of $5,000; for eligible associate degrees in the healthcare field, up to $50,000 in loans for non-ParentPlus refinance loans
Loan terms
5, 7, 10, 15, 20 years (but also offers any term below 20 years, subject to underwriting criteria)
* PenFed Credit Union: PenFed Credit Union offers reasonable fixed rates, no origination fees, and no prepayment penalties.
Eligible loans
Federal, private, parent student loans
Loan amounts
From $7,500 to $300,000
Loan terms
5, 8, 12, 15 years
Compare refinance student loans
| Lender | Best For | Variable APR* | Fixed APR* | Loan Term | Loan Amount |
|---|---|---|---|---|---|
| SoFi | Overall refinancing | 6.24%-9.99% | 3.99%-9.99% | 5 – 20 years | $1,000 – full balance of education loans |
| Earnest | Flexible repayment options | 5.99%-8.94% | 5.19%-8.99% | 5 – 20 years | $5,000 – $500,000 |
| Laurel Road | Students in health care | 5.24%-10.64% | 5.49%-10.74% | 5 – 20 years | $5,000 – full balance of education loans |
| Citizens Bank | Available discounts | 9.54%-11.62% | 8.26%-10.17% | 5 – 20 years | $10,000 – $750,000 |
| LendKey | Comparing multiple lenders | 5.52%-8.70% | 5.49%-12.18% | 5 – 20 years | Starting at $5,000** |
| College Ave | No fees | 6.99%-13.99% | 6.99%-13.99% | 5 – 15 years | $1,000-$300,000($150,000 for some degrees) |
| Splash Financial | Low rates | 5.72%-10.24% | 4.96%-10.24% | 5 – 15 years | Starting at $5,000 |
What is student loan refinancing?
Student loan refinancing is the process of taking out a new loan to repay your previous student loans. When you refinance your student loans, you may be eligible for a reduced interest rate and a new repayment plan. This could help you save money on interest or cut your monthly bills.
People with a big monthly payment or a high-interest rate may consider refinancing since it can make loans more accessible in both the short and long term. Borrowers with good credit, in particular, will qualify for the most favorable rates and conditions. You can refinance both federal and private student loans; however, it is normally advisable to avoid refinancing federal loans because they come with a variety of benefits that are not available through private lenders.
Should I refinance my student loans?
The decision to refinance your student loans is a major one. The major motivation to refinance is to save money. Many student loan providers offer significant savings on their websites. For example, ELFI clients who refinanced their student loans between January 3, 2023, and March 1, 2023, saved an average of $278 each month — and a total of $20,774 in average interest expense savings during the loan’s term, according to its website.
Before applying for refinancing, look around for the best rates to discover what you are prequalified for. To compare lenders, consider using loan marketplaces such as Credible. Before you begin applying for a refinance, you need also ensure that your finances are in order. To get the best rates, you should meet the following requirements:
- Good credit score
- Stable income
- If your current interest rate is at or over 6%, consider refinancing to save money.
You should also ask yourself these questions:
- Do you want to pay off your loans faster if you could shorten the payback period?
- Would you like to make your loan payments more affordable by extending your repayment term?
Borrowers of federal student loans who want to refinance with a private lender should be aware that doing so would result in the loss of whatever safeguards they had with their federal loans, such as income-driven repayment, student debt forgiveness, and any present or prospective relief measures. Some private lenders (including those on this list) will provide their payment protections, such as deferment or forbearance, so be sure you understand your alternatives before taking out a refinanced loan.
Is now a good time to refinance student loans?
In general, student loan borrowers who are paying a greater interest rate on their federal or private student loans than they could otherwise afford should consider refinancing. However, federal student loan borrowers should be aware of the government protections that are lost when they go private.
Borrowers of private student loans should also evaluate whether their credit score has improved since they last took out a private loan; if so, they are more likely to receive a reduced interest rate.
What are the requirements to refinance student loans?
Once you’ve found a lender who best fits your financial circumstances, look into the precise refinancing requirements. These may differ from lender to lender, but here are some typical factors to be aware of:
- Debt-to-income ratio: Your debt-to-income ratio (DTI) measures the amount of debt you have compared to your monthly wages. If your debt-to-income ratio is less than 50%, you are more likely to get authorized.
- Credit score: When applying for a loan, your credit score counts. Before applying, check with your lender about their credit score criteria. If you have a credit score in the mid-600s or lower, you may require a co-signer to qualify for a loan.
- Income: Lenders may impose a minimum income level, and they will most likely require proof of employment, which demonstrates that you have the funds to make your monthly payments. Most lenders want evidence, so bring current pay stubs, W2 forms, or bank records.
- Refinancing amount: If you want to refinance your student loans, you’ll most likely need to owe at least $5,000. Most lenders will not work with you if you have less than this amount.
- Degree: Student loan refinancing normally requires a finished college degree, while some lenders accept borrowers regardless of degree status.
If the lender you’re considering has a prequalification tool, you may use it to get an estimated rate based on your overall financial history. A soft credit inquiry will not harm your credit score.
How is my student loan refinancing rate determined?
The interest rates advertised by lenders for student loan refinancing may differ from the rates you get. Lenders calculate your APR based on a variety of factors, including your credit score, income, debt-to-income (DTI) ratio, savings, variable or fixed rate, and loan term.
Can I refinance my student loans multiple times?
There is no limit to how many times you can refinance your student loans. One themoneymail Select reporter refinanced their student debts six times, saving thousands in interest. Refinancing student loans is a simple process that typically involves no additional charges or penalties.
Will refinanced student loans be forgiven?
If you refinance your federal student loans, a new private lender will assume responsibility for them. Once you acquire private student loans, you will be ineligible for federal protections and benefits such as debt forgiveness and repayment moratoriums.
How does refinancing affect my credit?
When you refinance your student loan, lenders will search your credit report to see if you are a high-risk borrower, which is known as a hard inquiry. This may drop your credit score by five or so points, but it will most likely recover as you continue to make on-time monthly payments on your new refinanced loan.
Many lenders and loan marketplaces provide prequalification tools, which allow you to quickly enter your personal information and view rate quotations from lenders without actually applying and damaging your credit. You’ll be able to see your interest rate, payback duration, and any costs. Choose the lender who offers you a significantly lower interest rate than the one you are presently paying.
In Conclusion
The greater your student loan interest rate, the longer it will take to make a dent in your principal sum and finally pay off that hefty debt. Consider refinancing with one of the top lenders on this list to see what rate you qualify for.
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