How Soon Can You Refinance a Student Loan After Graduating?

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If you have student loans, you’ve probably heard the buzz surrounding student loan refinancing. Being able to save thousands of dollars in interest and merge your loans into one monthly payment is definitely appealing.

But can you refinance a student loan right out of college? Here’s what you need to know if you’re interested in refinancing student loans but aren’t sure when to make your move.

Can you refinance a student loan right after graduating?

There are no strict rules about when you can refinance your student loans after graduating. But trying to refinance student loans right out of college might be a challenge, mostly because you might not be in a position to qualify.

Here are three factors you need to consider when picking the right time to refinance your student loans.

1. Your employment and income

It’s important to look at eligibility requirements for each lender since they all have different standards.

Keep in mind that most refinancing companies want you to have a job lined up and sufficient income to pay back your loans. There may even be specific income requirements as dictated by the lender that you need to meet to pay back your loans.

But as a recent graduate, you might still be looking for a job or earning a lower entry-level salary. So if you’re a lower-income borrower, chances are refinancing may not be the best option for you at this time.

2. Your credit score and credit history

Many new college graduates don’t have a long credit history – or any credit at all. Yet, you will most likely need to meet credit requirements that, depending on your credit history, could make refinancing difficult.

For example, many private lenders may expect you to have a good credit score is the high 600s, though thresholds will vary.

Some refinancing companies also want to see a positive repayment history on your student loans before you are eligible for refinancing. If you weren’t paying back your student loans while you were in school, you may not be eligible for refinancing right after graduation – you don’t have proof of repayment.

Citizens Bank, for instance, requires you to make three on-time payments and show proof of graduation before refinancing. And if you didn’t complete a degree, you might still be eligible to refinance, but you’ll need 12 on-time student loan payments to qualify.

3. Your student loan grace period

Your student loan grace period (the six months after graduation during which repayment is deferred) helps you start your post-college life off on the right foot. It gives you some breathing room.

Depending on the lender’s repayment terms, refinancing student loans might mean switching to a new loan with payments that kick in as soon as the loan is disbursed.

There is the option to choose a student loan refinancing company that honors grace periods. SoFi, for example, will “honor the first six months of any existing grace period of the loans you refinance.” That way, you can benefit from lower interest rates now — without starting payments right away.

What to do before you refinance student loans

Before you decide to go through with student loan refinancing, consider the following so you can determine if it is the right move for you.

Check your credit reports

Before you begin the process of refinancing, take a look at your credit reports from the three major bureaus at AnnualCreditReport.com.

You can also get your free credit score from sites such as Credit Karma to find out where you stand. That way you can cross-reference the lender’s credit score requirement with your own.

Make a list of all your outstanding loan amounts and interest rates. This will help you see how your newly refinanced student loan payments will fit in with the rest of your debts.

Understand the potential downsides of refinancing

If you have federal student loans and choose to refinance them, you’ll lose the option to pursue benefits such as loan forgiveness or income-driven repayment plans.

What’s more, the process of refinancing is irreversible. You can’t go back to your old payment plan with your old terms. While refinancing can help you get a better interest rate and save you money, you ultimately forfeit federal student loan protections.

However, if you only have private student loans, refinancing may be less of a risk since they don’t have federal student loan benefits attached to them.

Depending on the lender you choose, you might actually gain more protections. SoFi’s refinancing terms include an Unemployment Protection feature. It suspends your payments for three months if you’re laid off (or otherwise lose your job through no fault of your own).

Research a lender’s requirements for student loan refinancing

Trustworthy lenders will make it easy to tell if you are eligible to refinance your student loans.

Typically, student loan refinancing companies look at your area of study and degree, credit score, employment, salary, and payment history to determine if you are eligible. Some lenders will only refinance student loans with high balances, such as Education Loan Finance ($15,000 minimum) and PenFed ($20,000 minimum).

Many lenders also have other eligibility requirements, including U.S. citizenship or residency in certain states. Certain lenders, especially fintech companies, will not offer student loan refinancing in all states. Residents of Nevada, for example, won’t be able to refinance student loans with SoFiEarnest, or CommonBond.

Before you start submitting applications to lenders, research student loan refinancing companies’ eligibility requirements to see if you qualify.

How soon can you refinance a student loan?

For eligible candidates with good credit and stable income, the sooner you refinance, the better. If you refinance now, you’ll start reaping interest savings right away and you’ll be more likely to receive lower interest rates.

Let’s say you have a Graduate PLUS loan with an interest rate of 7.00% and a $50,000 balance. If you refinance to a typical rate of 4.99% over a 10-year repayment period, you could save roughly $50 per month. Even more impressive, you’d save more than $6,000 in interest over the life of the loan.

You can use this student loan refinancing calculator to estimate your own savings. Imagine what you could do with that extra cash. You might put it toward your principal payments, save it for a rainy day, or invest it to boost your retirement funds.

Essentially, the best time to refinance student loans is as soon as you can qualify for lower interest rates.

To qualify, you may be required to meet a lender’s underwriting standards. Oftentimes lenders will want to see stable employment and a good income. Citizens Bank and LendKey, for example, require annual pay of $24,000 or greater.

You’ll also need a solid credit history and score. Some lenders, such as Earnest, have more flexible credit requirements and no credit score minimums. Others, including SoFi and Laurel Road, like to see credit scores of at least 680.

As soon as you can meet these requirements, you will want to seriously consider refinancing with a lender of your choosing.

When you can’t refinance student loans

Most lenders won’t approve a student loan refinancing application while you’re still in school. You’ll probably have to wait at least until you’ve graduated or are otherwise no longer enrolled.

One exception is Earnest, which accepts refinancing applications from students in their last semester of college. Citizens Bank doesn’t require a degree to refinance student loans, but you can’t be currently enrolled.

Finally, you must be in good standing on your student loans in order to refinance. In other words, lenders are looking for borrowers with a history of on-time payments who are not in default. If you are currently in student loan default, you most likely won’t be eligible for student loan refinancing.

However, if you have federal student loans and are facing default, you can work to get out and repair your credit.

By making nine consecutive payments within 10 months, you may be able to rehabilitate your loan and have the default removed from your credit history. You can then rebuild your credit after a default and eventually refinance after you’ve improved your score.

3 options if you can’t refinance student loans yet

If you’re a recent college graduate who hasn’t had time to get their credit in order or is working on their career trajectory, that’s okay. You still have a few options to help you refinance or otherwise manage your student loans.

1. Work toward qualifying for student loan refinancing

If you applied for student loan refinancing and were rejected (or suspect you will be), don’t be discouraged. You can work on what’s keeping you from qualifying and then apply again.

Credit score not where you want it to be? Come up with a plan for improving it. Spend several months working toward a raise or building credit. This will improve your chances of qualifying and could even get you a lower interest rate, so you save more.

2. Get a cosigner to refinance student loans

If you can’t qualify on your own to refinance right now, but you don’t want to wait, you can refinance student loans with a cosigner. A cosigner is someone who signs the loan agreement with you and is equally liable for the debt.

This makes it easier to qualify for the loan, even if you’re a recent college grad with lower income and no credit. Some lenders will even set your rate based on the higher credit score of the two applicants. You could potentially save even more when refinancing if your cosigner has a high credit score.

3. Look into income-driven repayment plans

If you have federal student loans, an income-driven repayment plan may be a better option. And if your income is truly an issue, you could qualify for payments that amount to as little as zero dollars.

The best time to refinance is when you’re ready

There are few great reasons to refinance student loans now, such as:

  • Take advantage of today’s low interest rates.
  • Start saving on student loan interest as soon as possible.
  • Lower monthly payments to free up money for other important goals.

However, whether or not to refinance student loans is a decision that shouldn’t be rushed. It can have its drawbacks when compared to the benefits of keeping federal student loans. What’s more, not everyone can save by refinancing their student loans.

As a borrower, it’s important to look at all of your repayment options. Take your time researching and comparing your options. Only refinance your student loans if it’s truly the best choice – and the best timing – for you.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.

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 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% 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.


2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.

Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.

Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.

Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.


3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance:Fixed rates from 3.899% APR to 7.804% 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 the current index rate derived from the 1-month LIBOR of 2.08% plus 0.64% 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)

4 Important Disclosures for LendKey.

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.


5 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of October 1, 2018, the one-month LIBOR rate is 2.22%. Variable interest rates range from 2.72%-8.32% (2.72%-8.32% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled. Applicants with an Associate’s degree or with no degree must have made at least 12 qualifying payments after leaving school. Qualifying payments are the most recent on time and consecutive payments of principal and interest on the loans being refinanced. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a cosigner who is a U.S. citizen or permanent resident. The cosigner (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a cosigner will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Estimated average savings amount is based on 14,659 Education Refinance Loan customers who saved on loans between August 1, 2017 and July 31, 2018. The calculation is derived by averaging monthly savings across Education Refinance Loan customers whose payment amounts decreased after refinancing, calculated by taking the monthly payment prior to refinancing minus the monthly payment after refinancing. We excluded monthly savings from customers that exceeded $4,375 and were lower than $20 to minimize risk of data error skewing the savings amounts. Savings will vary based on interest rates, balances and remaining repayment term of loans to be refinanced. Borrower’s overall repayment amount may be higher than the loans they are refinancing even if monthly payments are lower.

2.47% – 6.99%3Undergrad
& Graduate
Visit SoFi
2.47% – 5.87%1Undergrad
& Graduate
Visit Earnest
2.47% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.95% – 6.37%2Undergrad
& Graduate
Visit Laurel Road
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.72% – 8.32%6Undergrad
& Graduate
Visit Citizens
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.