6 Best Banks to Refinance and Consolidate Student Loans in 2018

If you’re ready to refinance your student loans, your search for the best lender is finally over.

We compared banks and lenders across the country to find ones with the best terms for student loan borrowers. The six below could help you refinance and consolidate both private and federal student loans. With this move, you could snag a lower interest rate, decrease your monthly payment, or both.

You might even get out of student loan debt ahead of schedule.

To qualify for refinancing, you’ll need to meet requirements for credit score, annual income, savings, and college degree (or certificate of enrollment if you’re still in school). If you can’t yet qualify on your own, you could apply with a creditworthy cosigner to improve your chances.

Ready to take control of your student loans? Here are our top recommendations for student loan refinancing and consolidation.

Disclosure: Student Loan Hero is a free website to help student loan borrowers. We only evaluate lenders and do not issue student loans. This report was not chartered by or created on behalf of any lender listed below.

Our Top 6 Picks for Student Loan Refinancing

LenderVariable APRLoan TypesTermsEligible DegreesEligible LoansMore Info
2.47% to 6.99%
Variable & Fixed5, 7, 10, 15, 20Undergrad
& Graduate
Private & Federal

Visit SoFi

2.46% to 6.97%
Variable & Fixed5 to 20Undergrad
& Graduate
Private & Federal

Visit Earnest

2.57% to 8.44%
Variable & Fixed5, 7, 10, 15, 20Undergrad
& Graduate
Private & Federal

Visit Lendkey

Apply by phone:Start Application:
1-877-304-9306
3.05% to 6.47%
Variable & Fixed5, 7, 10, 15, 20Undergrad
& Graduate
Private & Federal

Visit Laurel Road

2.50% to 7.24%
Variable & Fixed5, 7, 10, 15, 20Undergrad
& Graduate
Private & Federal

Visit CommonBond

2.55% to 6.01%
Variable & Fixed5, 7, 10, 15, 20Undergrad
& Graduate
Private & Federal

Visit Elfi

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

If you’re ready to refinance your student loans, your search for the best lender is finally over.

We compared banks and lenders across the country to find ones with the best terms for student loan borrowers. The six below could help you refinance and consolidate both private and federal student loans. With this move, you could snag a lower interest rate, decrease your monthly payment, or both.

You might even get out of student loan debt ahead of schedule.

To qualify for refinancing, you’ll need to meet requirements for credit score, annual income, savings, and college degree (or certificate of enrollment if you’re still in school). If you can’t yet qualify on your own, you could apply with a creditworthy cosigner to improve your chances.

Ready to take control of your student loans? Here are our top recommendations for student loan refinancing and consolidation.

Disclosure: Student Loan Hero is a free website to help student loan borrowers. We only evaluate lenders and do not issue student loans. This report was not chartered by or created on behalf of any lender listed below.

Top 6 Banks: In-Depth Reviews

1. SoFi

Cut the cost of your student loan debt.

Get Your Rate
  • Chiara McPhee – Stanford

    Chiara McPhee – Stanford

    Lowest rates without a cosigner!

    I was looking for the lowest rates I could find without a cosigner. SoFi was by far the best.

  • Ali Kahn – Ross University

    Ali Kahn – Ross University

    Tens of thousands saved!

    It's almost mind-boggling how much money I'll save through refinancing my student loans with SoFi - I'd literally be paying tens of thousands more with my original loans. Now that I’ve refinanced my student loans with SoFi, I see a light at the end of the tunnel. I’m able to put away a little bit more, think about long term goals, save for a house - and I know this burden isn’t going to be over my head for the rest of my life.

  • Barry Malinowski Jr. – Harvard

    Barry Malinowski Jr. – Harvard

    Significantly lower rate!

    With SoFi, I was able to significantly lower my rate, saving me thousands of dollars over the life of the loan. Plus, now I belong to a support group of borrowers and lenders, turning debt that was once only a liability into an assets of sorts. I’m grateful that a friend told me about SoFi.

  • Taryn B. – New York

    Taryn B. – New York

    Amazing customer service!

    Not only does SoFi provide low interest rates, but they have a seamless process, a tech savvy website and amazing customer service. They actually make me feel good about borrowing money from them.

  • Refinancing and consolidation of private and federal student loans
  • Must have completed an eligible undergraduate or graduate degree program
  • Available for both undergraduate and graduate school student loans
  • 2.47% APR to 6.99% APR (with autopay) variable rates, capped at 8.95% to 9.95% APR
  • 3.90% APR to 7.98% APR (with autopay) fixed rates
  • 5, 7, 10, 15, 20 year repayment terms
  • No origination fees or prepayment penalties
  • Unemployment protection – loan payments are paused and they help find new job
  • Career support – complimentary coaching for SoFi members
  • Entrepreneur program – qualified applicants can receive loan deferrals and mentorship
  • Important Disclosures

    SoFi Disclosures

    1. Student loan Refinance:
      Fixed rates from 3.899% APR to 7.979% APR (with AutoPay). Variable rates from 2.470% APR to 6.990% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.470% APR assumes current 1 month LIBOR rate of 2.30% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR 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. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
    2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2. Earnest

Get your rate in 2 minutes.

Get Your Rate
  • Sara Hathaway – UBC

    Sara Hathaway – UBC

    Not just another statistic

    These are real people who actually care about my needs as a person; I'm not just another statistic to them, I'm a relationship.

  • Refinancing available for undergraduate or graduate student loans from both private and federal lenders
  • Rates start at 2.46% APR variable (with autopay) and 3.89% APR fixed (with autopay)
  • Radical flexibility to pick any monthly payment and term between 5 and 20 years – saving you more than standard rates and terms
  • No set income requirements – Earnest looks at thousands of data points to evaluate financial responsibility and deliver the lowest possible rate
  • Commitment-free 2 minute rate check
  • Earnest never passes you off to a third party – their on-site team is your customer service partner for the life of your loan
  • Ability to change your loan as your life and needs change – refinance your loan for free, change payment dates, even skip a payment once a year and make it up later
  • Unemployment protection to pause your monthly payments when in between jobs
  • No origination fees, application fees, or prepayment fees
  • Must have completed undergraduate or graduate degree or expected graduation within 6 months
  • Must be currently employed or with an employment offer starting within 6 months
  • Must be a U.S. Citizen or permanent resident
  • Important Disclosures

    Earnest Disclosures

    To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

    Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 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% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.

    Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

    The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on ourstudent loan refinance product.

    © 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

3. LendKey

Loans funded by community lenders.

See refinancing rates from our network of 300+ lenders in 2 minutes without impacting your credit score.

Get Your Rate
  • Megan – Wartburg College

    Megan – Wartburg College

    I feel like I can breathe again!

    I have been very impressed with my application process with LendKey! Their customer service team is prompt in responding to any inquiries via email and very helpful on the phone! The application process was easy to follow and very user friendly! With LendKey's help, I'll be saving nearly $400 per month on my student loans! I'm absolutely thrilled and feel like I can breathe again knowing how much this is going to help me financially and the ability to pay my loans off faster. Thank you LendKey!

  • Tyler – Grand Valley State University

    Tyler – Grand Valley State University

    Thanks LendKey!

    I checked multiple companies for student loan refinancing and LendKey was by far the easiest and had best rates. Save yourself time and just go with LendKey.

  • Michelle – San Jose State University

    Michelle – San Jose State University

    Easy, friendly, and approved!!

    I found the application process easy, the customer service when I called always friendly and helpful (minimal automated phone assistance!) and I was approved quickly! Highly recommend refinancing your student loan with Lendkey!

  • Tyler – Harvard

    Tyler – Harvard

    Customized repayment plans

    I liked the repayment program that was offered. Lower payments in the beginning and as I moved along in my career and earned more, I could pay more.

  • Gregory – Rutgers

    Gregory – Rutgers

    Fantastic customer service!

    The customer service was fantastic and the network of credit unions was incredible. At the time when I was looking to consolidate my loans, I could not find many other opportunities like the one presented by you guys.

  • Abigail – Western Michigan University

    Abigail – Western Michigan University

    Much easier than the alternatives!

    I had outstanding loans from Sallie Mae with an extremely high interest rate. It would have taken me over 30 years to pay my college debt. You guys were the only program that allowed me to consolidate my private student loans for one easy payment. They are much easier and nicer to work with then Sallie Mae.

  • Higher chance of approval with LendKey’s network of not-for-profit lenders
  • Check real refinancing rates in 2 minutes with one form and no impact on your credit score
  • No handoffs – you’ll be with our fully trained customer care team from your application to your final payment
  • Refinancing and consolidation of private and federal student loans
  • Available for both undergraduate and graduate school student loans
  • Fixed rates from 5.13% ARP to 8.97% APR (with autopay)
  • Variable rates from 2.57% ARP to 8.44% APR (with autopay)
  • 5, 7, 10, 15, 20 year repayment terms
  • 0.25% Interest Rate Reduction – available to all borrowers when making automatic payments
  • Unemployment protection – longest period (18 months) of paused loan payments while in-between jobs
  • Cosigner release – available after 12 on-time payments
  • Minimum balance to refinance: $5,000
  • Minimum income of $24,000/year
  • No application or origination fees, and no prepayment penalties
  • Keep payments low with interest only repayment available for initial four years of some 15yr term loans
  • Important Disclosures

    LendKey Disclosures

    Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.

4. Laurel Road

Refinance up to 100% of outstanding federal and private loans at
super low rates.

Get Your Rate
  • Bethany Whittier, DDS – Dentist

    Bethany Whittier, DDS – Dentist

    I will save over $20,000!

    Refinancing my student loans through Laurel Road is the best thing that could have happened for my personal finances. The online application was very straightforward and I was approved within a week of applying. The customer service has been nothing but professional, promptly answering any questions I have about my account. Throughout the lifetime of my loan I will save over $20,000!

  • Dr. Bryce Peterson – Medical Doctor

    Dr. Bryce Peterson – Medical Doctor

    The customer service was very efficient!

    I have refinanced other loans, but never as easily as with Laurel Road. The online services they offered made this refi a snap, and their rates were lower than other banks, too. The customer service through email and telephone was also very efficient.

  • Dr. Chandy Randall – Medical Doctor

    Dr. Chandy Randall – Medical Doctor

    The interest rate was great!

    Applying to refinance my loan with Laurel Road was so easy! I only needed to collect a few documents and upload them to the website. The documents were reviewed and accepted quickly. The communication was easy. The interest rate was great! I am very happy that I decided to refinance with Laurel Road!

  • Bethany Hammons – Registered Nurse

    Bethany Hammons – Registered Nurse

    I would recommend them to anyone!

    After spending weeks communicating with other companies I had about given up on refinancing my loans. I decided to give one more company a try. Laurel Road (formerly DRB Student Loan) was such an easy online process I almost didn’t believe. I would recommend them to anyone. Student loans are stressful so it’s so nice knowing there’s a company out there to make the process as pain free as possible!

  • Brandi Brock – Finance Manager

    Brandi Brock – Finance Manager

    Fast and easy!

    Working with Laurel Road was fast and easy! I searched for the right refinance company, and no one had better rates or service. I would recommend refinancing with Laurel Road to any of my friends with student loan debt to consolidate!

  • Refinancing and consolidation of private and federal student loans
  • Must have completed an eligible undergraduate or graduate degree program
  • Laurel Road also offers parents of Bachelor degree holders the opportunity to refinance student loans they took out to finance their child’s education as long as their child has graduated and is working. Parents can refinance Parent PLUS loans in their own name or their child’s name.
  • 3.05% – 6.47% (with autopay) variable rates
  • 3.50% – 7.02% (with autopay) fixed rates
  • 5, 7, 10, 15, 20 year repayment terms
  • Maximum variable rates capped at 9% for 5-10 year terms. For greater than 10 year term, maximum rate cap is 10% APR
  • No origination fee or prepayment penalty
  • .25% Interest Rate Reduction with automatic payments via ACH
  • Important Disclosures

    Laurel Road Disclosures

    APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.

    Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.

    However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.

5. CommonBond

See your rate in two minutes

Your loan funds the education of a child in need

No Fees

Get Your Rate
  • Chan – Binghamton, NY

    Chan – Binghamton, NY

    Very easy application!

    It was very easy to go through the CommonBond website and apply for the loan.

  • Grace – Detroit, MI

    Grace – Detroit, MI

    Tailored, one on one service

    Looking at the math and the rates, it was an easy choice for me. It's just a very personal, tailored, one on one service.

  • Andrew – Grand Forks, ND

    Andrew – Grand Forks, ND

    Save Thousands of Dollars

    I am going to save thousands of dollars and some portion of that is going to help other people involved in education right now.

  • Mariana – Lansing, MI

    Mariana – Lansing, MI

    How could I live without this?

    You know that moment when you find out about something you didn't know existed, and you think how could I ever live without this?

  • Dan M – San Francisco, CA

    Dan M – San Francisco, CA

    Very innovative

    It's a very innovative approach to student financing.

  • Tom – Seekonk, MA

    Tom – Seekonk, MA

    Commitment to financial literacy

    Their committment to financial literacy education is also very important.

  • Dan S – East Hampton, CT

    Dan S – East Hampton, CT

    Support a great organization

    It's an opportunity to support an organization with a really great message about the community and people.

  • Refinancing and consolidation of private and federal student loans001
  • Available for undergraduate, graduate, and Parent PLUS student loans
  • 2.50% – 7.24% APR variable rate refinancing (with autopay)
  • 3.67% – 7.57% APR fixed rate refinancing (with autopay)
  • 4.35% – 6.30% APR hybrid rate refinancing (with autopay)
  • 5, 7, 10, 15, 20 Year Repayment Terms
  • 0.25% Interest Rate Reduction with automatic payments via ACH
  • Unemployment protection – loan payments are paused and it helps eligible graduates find new jobs and also hire them for short-term consulting projects
  • Access to CommonBond Community – Borrowers are connected to events in their cities, networking opportunities, and lifestyle perks
  • Social good – for every fully funded degree through CommonBond, it funds the education of a student in need abroad for a year through Pencils of Promise
  • No application, origination or disbursement fees
  • Important Disclosures

    CommonBond Disclosures

    Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.

    All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.

6. Education Loan Finance

  • Lance S. – Virginia Tech

    Lance S. – Virginia Tech

    ELFI was a breeze to deal with. All I had to do was complete some simple forms and upload a few documents. Anytime I had a question or issue they went above and beyond to either answer or even take care of the issue for me. I will now save over $24,000 over the life of the loan and I plan to use the savings to pay off my house faster. The best thing is, it cost us nothing. I wish I had refinanced with ELFI years ago.

  • Variable rates and fixed rates from 2.55% APR to 6.69% APR – we offer these discounted rates automatically as there is no need to enroll in auto debit!
  • No application fees, no origination fees and no prepayment penalties.
  • Refinance federal and private education loans and lower your monthly payments or total student loan cost
  • “I would recommend everyone refinance their loans with ELFI. They made this the easiest, stress free process. Unlike other loan companies. ELFI, gives you your own representative from start to finish. My representative Nate was so helpful, he got me an answer on my loan process in less than 48 hours, and made sure if I had any questions I could reach out at any time. Awesome customer service, I have already recommended ELFI to multiple co-workers.” (Alana T., CT)
  • Our management team has over 30 years of experience in the student lending business, with experts who know how best to meet our customers’ goals
  • Must have a bachelor’s degree or higher from an eligible institution
  • Flexible repayment terms on student loans: 5, 7, 10, 15, 20 years
  • Parent Loan refinance program offered for both fixed and variable rate loan products with terms of 5, 7, and 10 years
  • Subject to credit approval. Terms and conditions apply http://www.elfi.com/terms/

Recap: The Top 6 Student Loan Refinancing Companies

  • SoFi
  • Earnest
  • Lendkey
  • Laurel Road
  • CommonBond
  • Education Loan Finance

Frequently Asked Questions About Refinancing

What is student loan refinancing?

When you refinance student loans, you take out a new loan from a private lender to pay off one or more of your old loans. If you qualify, you could snag a lower interest rate on this new loan. You can also choose new repayment terms to pay off your debt faster or lower your monthly bills.

Eligible borrowers can refinance student loans to achieve a number of objectives, such as:

  • Saving money on interest with a lower rate
  • Adjusting your monthly payments to match your goals
  • Combining multiple loans into one, simple repayment
  • Removing a cosigner from your debt
  • Switching to a new loan servicer with better customer service

If you choose a shorter repayment term when you refinance, you could save money by paying off your debt faster and therefore paying less in interest over the life of the loan. On the other hand, you could select a longer term to lower your monthly bills, though this will cost you more in interest by the time you’ve paid off your debt. Whatever your goals, refinancing can be a savvy strategy for managing your student loan debt.

Are there any downsides to refinancing student loans?

Refinancing federal student loans means you turn them private. As a result, you lose access to federal programs, such as income-driven repayment and Public Service Loan Forgiveness. Some private lenders offer help if you run into financial hardship, but this varies by lender. If you’re relying on federal protections, then you should not refinance your federal student loans. But if you’re comfortable sacrificing these programs, refinancing could be a smart strategy for paying off your loans.

What’s the difference between private refinancing and federal consolidation?

Although refinancing can simplify your debt by combining multiple loans into one, it’s different from federal student loan consolidation. You refinance student loans with a private lender, but you consolidate loans by taking out a direct consolidation loan from the federal government.

Federal consolidation combines federal student loans into one new loan, and it lets you choose new repayment terms. But it doesn’t lower your interest rate, so you won’t save money on interest — only student loan refinancing helps you lower your rate, if you qualify.

How do I refinance my student loans?

Many lenders offer student loan refinancing, from traditional banks, to credit unions to online lenders. Before choosing one, shop around and compare your offers. Several lenders make it easy to get an instant rate quote online with no impact on your credit score. By checking your rates with a variety of refinancing providers, you can find a refinanced student loan with the best possible terms.

Am I eligible for student loan refinance?

You can refinance one or more federal and/or private student loans, but you must meet a lender’s requirements for credit and income. Most lenders look for a credit score of 650 or higher, along with a steady source of income or an offer of employment. If you can’t meet these criteria on your own, you could qualify by applying with a creditworthy cosigner, such as a parent.

Along with your credit score and annual income, some lenders also look at your savings and debt-to-income ratio. Finally, some lenders require proof of graduation, as they’ll only approve borrowers who have obtained their degree. If you left school before graduating, there are relatively few student loan refinance providers that will work with you.

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