Student loan refinancing is the process of combining one or more of your existing student debts into one new loan. Refinancing can offer plenty of benefits, such as the potential for a lower interest rate or lower monthly payments.
To refinance your student loans, you’ll need good credit and a reliable income. The process can be completed online and takes only up to a few weeks to complete. Here are six steps to refinance your student loans.
Refinancing doesn’t make sense for everyone. First, consider what you hope to achieve by refinancing. Are you aiming for a lower interest rate? Do you want lower monthly payments? Are you looking to remove your cosigner?
It’s also important to consider which loans you want to refinance. Think twice before refinancing federal student loans, since you'll lose federal benefits and protections. If you don’t have a stable income or you’re pursuing loan forgiveness, you may need those perks later.
Generally speaking, refinancing might benefit you in the following situations:
- You have high-interest private student loans: Refinancing can potentially reduce the cost of your debt over time by securing you a lower interest rate on your private loans.
- Your finances are stable: Financial stability makes you a more appealing candidate to lenders who can either deny or approve your application based on your credit profile. Your credit score will affect your ability to qualify for a more favorable interest rate.
- You want to lower your monthly payments: If you need to free up room in your monthly budget, refinancing gives you the option to extend your repayment term, which can reduce your monthly payments. Just remember that you’ll end up paying more interest over time.
Related: Should I refinance my student loans?
You’ll generally need good credit to refinance on your own, and excellent credit if you hope to get the best rates and terms. Lenders typically look for a FICO credit score in the mid-to-high 600s or greater. You’ll also typically need sufficient income and a debt-to-income ratio of 50% or lower — though under 36% is ideal.
Before you submit an application, check your credit score and see how it lines up with what's required. Here are a couple of easy ways to do so:
- On your credit card bill or loan accounts: Credit card and loan companies often provide your score on monthly statements or in your online account.
- Through a free credit score service: There are websites that provide your credit score at no cost. Just make sure to read the fine print to avoid unnecessary charges.
Good to know:
If you don’t meet a lender’s credit requirements, adding a cosigner to your application can help. Even if you do qualify on your own, a cosigner can help you lock in better rates.
Related: Can you refinance student loans with bad credit?
Many lenders allow borrowers to prequalify for a refinance loan. To do so, input a few pieces of personal information on the lender’s site. Then, you can view the estimated interest rates and terms you’re likely to qualify for.
Unlike the formal application process, prequalification typically doesn’t involve a hard credit check. This means that you can suss out your options without impacting your credit, making it easier to identify the best loans available. Just keep in mind that prequalifying doesn’t guarantee approval, nor are the quoted terms assured — the lender will still need to conduct a hard credit check after you apply.
Before submitting any application, shop around and compare different lenders. As you weigh your choices, pay attention to the following factors:
- Advertised interest rates and annual percentage rates (APRs)
- Whether rates are fixed or variable
- Available repayment options
- Application, origination, or late fees, as well as other added costs
- Economic hardship policies, if you have trouble repaying your loan later
- Discounts, cash-back programs, or other rewards
- Cosigner release policies, if available
- The lender's reputation and customer service reviews
Fox Money rating
Fixed (APR)
4.94% - 8.69%
Loan Amounts
$10,000 up to total refinance amount
Min. Credit Score
Overview
Borrowers who graduated with at least a bachelor’s degree may refinance their student loans with ELFI. Every applicant is assigned a student loan advisor to help guide them through the process.
Students who wish to take over their parents’ PLUS loan may do so by refinancing with ELFI — something not offered by every lender — but spouses can’t consolidate their loans into a single refinancing loan.
Unfortunately, ELFI doesn’t allow borrowers to release cosigners, nor does it offer any rate discounts. However, borrowers who experience financial hardship may be eligible for up to 12 months of forbearance.
Interest rates
Fixed and variable
Minimum credit score
Minimum income
Loan terms
5, 7, 10, 15, or 20 years for student loan refinancing; 5, 7, or 10 years for parent loan refinancing
Loan amounts
Minimum of $10,000 with no set maximum.
Cosigner release
Eligibility
Must be a U.S. citizen or permanent resident with a bachelor’s degree or higher. Must have at least $10,000 in student loans to refinance and a minimum credit history of 36 months.
Fox Money rating
Fixed (APR)
5.24% - 9.40%
Loan Amounts
$5,000 - $250,000
Min. Credit Score
Overview
Founded in 2009, LendKey partners with 300+ community banks and credit unions to connect borrowers with the loans they need. You can compare multiple lenders at once without affecting your credit score.
However, the exact terms and qualification requirements available through LendKey vary depending on your chosen community lender. While you can easily compare options, you’ll need to read the fine print of each offer to make sure the loan offers everything you need.
Interest rates
Fixed or variable
Minimum credit score
Minimum income
Does not disclose
Loan terms
5, 7, 10, or 15 years
Loan amounts
$5,000 to $250,000
Cosigner release
Varies based on lender's terms
Eligibility
Must be a U.S. citizen or permanent resident and have already graduated with at least an associate degree from one of LendKey lenders’ eligible institutions.
Fox Money rating
Fixed (APR)
6.00% - 10.37%
Loan Amounts
$7,500 - $200,000
Min. Credit Score
Overview
EdvestinU is a loan program offered by Granite Edvance Corporation and offers affordable rates for refinance loans. Borrowers can refinance federal and private loans, and fixed and variable rate loans are available.
EdvestinU refinance loans are available to residents of about 20 states, and the lender has higher loan minimums and lower maximums than some competitors. Both of these factors limit who can (or might want to) refinance with this lender, but eligible borrowers do have various repayment term options.
Interest rates
Fixed or variable
Minimum credit score
Minimum income
Does not disclose
Loan terms
5, 10, 15, or 20 years
Loan amounts
$7,500 to $200,000
Cosigner release
Eligibility
U.S. citizens or permanent residents who are at least 18 years old and reside in Alaska, Arkansas, Colorado, Connecticut, Florida, Maine, Massachusetts, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Puerto Rico, Rhode Island, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin.
Fox Money rating
Fixed (APR)
6.15% - 10.14%
Loan Amounts
$5,000 - $250,000
Min. Credit Score
Overview
INvestEd is an Indiana-based nonprofit lender that provides refinanced student loans nationwide. As a nonprofit, INvestEd offers competitive rates as well as an autopay discount. Cosigner release is also available after 12 on-time payments, which is less than many competitors.
However, the maximum refinance limit of $250,000 is below what other lenders may allow. Borrowers must also comply with strict credit and income requirements to qualify, or must have an eligible cosigner. While credit requirements are clearly defined, there’s no way to prequalify with a soft credit check.
Interest rates
Fixed or variable
Minimum credit score
Minimum income
Does not disclose
Loan terms
5, 10, 15, or 20 years
Loan amounts
$5,000 to $250,000
Cosigner release
Eligibility
U.S. citizens or permanent residents are eligible. Borrowers must meet minimum requirements including a FICO score of 670 or higher, annual income of $36,000, a debt-to-income ratio below 40% to 50%, a year of continuous employment, and no defaults or serious collection activities in recent years.
Fox Money rating
Fixed (APR)
6.20% - 8.99%
Loan Amounts
$10,000 up to the total amount
Min. Credit Score
Overview
Massachusetts Educational Financing Authority (MEFA) offers refinancing loans to student borrowers — and unlike many other lenders, you don’t need to have earned your degree to qualify. Only fixed-rate loans are available, but the rates are competitive and may be lower than what other lenders can offer. MEFA also doesn’t charge any fees or penalties.
Refinance loans start at $10,000, and you must have made six consecutive on-time payments on the original loans over the most recent six months. If you can’t qualify based on your own credit history, you can add a cosigner.
Interest rates
Minimum credit score
Minimum income
Does not disclose
Loan terms
7, 10, or 15 years
Loan amounts
$10,000 up to your total debt
Cosigner release
Eligibility
Must be a U.S. citizen or permanent resident who is the primary borrower on education debt used to attend an eligible college or university. Must have made six on-time loan payments over the most recent six months. Must have no history of default or delinquency on education debt for the past 12 months and no history of bankruptcy or foreclosure in the past five years.
Fox Money rating
Fixed (APR)
6.34% - 8.54%
Loan Amounts
$7,500 - $250,000
Min. Credit Score
Overview
Founded in 1981, Rhode Island Student Loan Authority (RISLA) is a nonprofit lender that offers refinance loans to borrowers in all 50 states. Though most private lenders require borrowers to have graduated to qualify for refinancing, RISLA also serves borrowers who didn’t complete their degree.
RISLA offers income-based repayment to borrowers in financial distress. Additionally, borrowers may also access up to 24 months of forbearance in the event of financial hardship. Borrowers who return to graduate school may defer repayment on their refinancing loans for up to 36 months.
Interest rates
Minimum credit score
Minimum income
Loan terms
5, 10, or 15 years
Loan amounts
$7,500 minimum up to of $250,000, depending on degree
Cosigner release
Eligibility
Borrower or cosigner must meet credit requirements. Student must be a U.S. citizen or permanent resident and have used original student loans to attend an eligible degree-granting institution.
Fox Money rating
Fixed (APR)
6.50% - 10.99%
Loan Amounts
$10,000 - $750,000
Min. Credit Score
Does not disclose
Overview
Citizens offers student loan refinancing to qualifying borrowers who refinance at least $10,000 in student loan debt.
Undergraduate borrowers can refinance up to $300,000 in student loans, while those who borrowed for graduate or professional degrees have higher limits of $500,000 or $750,000. Citizens offers fixed and variable rates and repayment terms between five and 20 years.
If you’re a medical resident, you can refinance your student loans and only pay $100 per month for up to four years while completing your residency or fellowship.
Interest rates
Fixed or variable
Minimum credit score
Minimum income
Does not disclose
Loan terms
5, 7, 10, 15, or 20 years
Loan amounts
$10,000 minimum, with a maximum of $300,000 for bachelor’s degree or below; $500,000 for graduate degrees; and $750,000 for professional degrees
Cosigner release
Eligibility
Must refinance at least $10,000 in student loans and be a U.S. citizen, permanent resident, or resident alien with a valid U.S. Social Security number. Must have earned at least a bachelor's degree to qualify.
Fox Business does not make or arrange loans.
Once you've determined a lender you like, it's time to apply. You'll need to include basic personal and contact information, such as your name, date of birth, Social Security number, address, phone number, and email address. You may also need to provide government-issued identification like a driver's license or passport.
The application will typically ask about your school and degree (including proof of graduation), as well as the types of loans you're planning to refinance and the loan amount you're requesting. It's also common to provide information about your income, which may require pay stubs or W-2 forms, as well as details about your employer.
If you have a cosigner, they’ll need to provide similar information about themselves.
Important:
When you apply for a student loan refinance, the lender will perform a hard credit check, which may temporarily lower your credit score.
If you’re approved for your new loan, there are still a few things to complete. You’ll usually need to finalize your loan terms and other relevant options before signing the final paperwork.
Then, your new lender will work with your old lenders to pay off your existing loans. This can take some time to process, so it's important that you continue to make payments on your old debts so they remain current.
The refinancing process can sometimes take a few weeks to complete. Keep making payments on your original student loans until you receive a confirmation from the lender that your loans have been transferred to the new lender.
Once you receive this confirmation, you can start making monthly payments on your newly refinanced loan. You’ll typically need to create an online account with your new loan servicer to do so. Keep an eye on your account statements from both your old and new lender during the transition period to ensure everything is processed correctly.
Pros and cons of student loan refinancing
Refinancing your student loans has plenty of benefits, but it's not without risk.
- Potentially save money: Depending on your credit and other factors, you could lower your interest rate, leading to significant savings over time.
- Streamline multiple payments: If you're juggling several payments for different loans each month, refinancing can roll them into just one monthly payment to worry about.
- Reduce your monthly payments: Refinancing could also reduce your monthly bill. You can do this by lowering your interest rate and/or extending your loan term. While this can make your payments more affordable, note that extending your loan term can increase your interest costs over the life of the loan.
- Lose access to federal benefits: If you refinance federal student loans, you’ll lose access to valuable federal protections. This includes various repayment plans, such as income-driven repayment, as well as loan forgiveness and temporary payment relief.
- Potentially pay more: Refinancing isn’t guaranteed to save you money. Depending on your new loan’s terms, you may end up paying more over the life of the loan.
- Strict qualification standards: Typically, you'll need good credit, steady income, and a reasonably low debt-to-income ratio to qualify. For some, it can be hard to meet these qualification requirements without enlisting a cosigner.
You can technically refinance student loans at any time, as long as you meet a lender's eligibility criteria. Refinancing more than once may help you reduce your interest rate even further, saving you more money over the life of your loan.
Not necessarily. The best lender is the one that offers you the best interest rate and loan terms, and can match your needs as a borrower. In addition, many of the largest banks, including Bank of America, Chase, and Wells Fargo, no longer offer student loan refinancing.
The amount of time refinancing takes depends on the lender and the specifics of your application. A lender may approve you instantly, or it could take 10 business days or longer.
Once you’re approved and have signed the final paperwork, the lender must pay off your old loans before the process is complete. That can take anywhere from a few days to several weeks.
Refinancing has the potential to hurt your credit — though it could also help it. You might see an initial drop in your credit score after applying because lenders conduct hard credit checks. And if, down the road, you're late on making payments, that can negatively affect your credit score.
However, if you manage your loans wisely and build a history of on-time, in-full payments, that can help your credit score.
Meet the contributor:Becca Stanek
Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as the managing editor for investing and savings content at LendingTree and an editor at SmartAsset. Prior to that, she was a staff writer at The Week. She’s currently freelancing for publications including SoFi, Forbes, and The Week while she earns her MFA in creative writing.
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