5 Secrets to Getting the Best Student Loan Refinance Rate

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There are a variety of benefits that come with refinancing student loans, from combining multiple loans into one to choosing new repayment terms. But perhaps the best perk is potentially saving money by snagging a lower interest rate.

Since each lender sets its policies, finding the best student loan refinance rates is all about comparing offers. Instead of settling on the first lender, look at several so that you can feel confident you’ve found the lowest rate.

This guide will explain how to make the rate-shopping process as fast and painless as possible. Your secret weapon in the hunt for the lowest rate? Instant rate quotes from online refinancing providers.

How instant rate quotes help find the best student loan refinance rates

By browsing offers from various lenders, you can find one that best matches your financial goals. After all, why refinance for a higher rate when there’s a lower one out there?

This process might sound daunting, but online technology makes it easy and fast. Several online refinancing providers allow you to check available rates in less than a minute.

To get started, follow these five steps.

1. Learn about the best refinancing providers

Sometimes the hardest part of refinancing student loans is knowing where to start. Before you can get a rate quote, you need to know your options.

A possible jumping-off point could be our list of the best refinancing providers. But regardless of where you start your search, hunt for those that offer low interest rates and a good variety of terms.

You might also pay attention to reviews to see what customers have to say about their experience. And if you’re not sure if a company has a good reputation, check with the Better Business Bureau or Consumer Affairs.

Note also that, unfortunately, there are student loan scams out there that could hurt your finances or steal your identity. Make sure you’re sticking with a reputable company and not one making promises that are too good to be true.

2. Focus on lenders that offer instant rate quotes

Some of the lenders on our Student Loan Hero list do offer some of the best student loan refinance rates, but they also share another great perk: the option to get an instant rate quote online.

After you complete a brief questionnaire, they can tell you if you pre-qualify for student loan refinancing, either on your own or with a cosigner. They’ll also tell you what rate you could get on a student loan. One of them — LendKey — shows you multiple offers from various community banks.

Once you’ve narrowed down your list of lenders to those that provide rate quotes, it’s time to take advantage of this easy process.

3. Request rate quotes from several lenders

Your next step is to check student loan refinance rates with a few different lenders. When you head to their websites, you’ll see the option to check your rate.

Most lenders collect a few basic pieces of information, such as your name, school and loan amount. For example, checking your rate with Earnest involves first entering your name and email.

Then, you’ll indicate your school, date of graduation and loan amount.

Next up is basic financial information, such as your income, retirement savings and monthly rent or mortgage payment.

Finally, you’ll enter your Social Security number and choose a password for your account.

At this point, Earnest would show you refinancing offers with variable and fixed rates and various repayment terms, assuming you pre-qualify.

Once you’ve landed on an offer from one lender, head to another lender’s website to see if it can beat it. Filling out the form only takes a minute, and you don’t have to worry about your credit score being dinged: These rate quotes only require a soft credit check, which has no impact on your score.

4. Compare your refinancing offers to see which is the best fit

Once you’ve gathered a few preliminary offers, compare all rates and terms to see which best matches your financial goals.

For instance, you can typically choose between a fixed and variable interest rate. Variable rates can fluctuate over time, while fixed rates are locked in for the life of the loan. If you’re planning to pay your debt off quickly, the risk of having your variable rate rise might be as much of an issue as it would be if you’re choosing a long term.

You can also choose repayment terms, typically between five and 20 years. Note that a longer term will come with a lower monthly payment, but it will also mean you’ll pay more interest in the long run.

Along with finding the best student loan refinance rates and terms, make sure you understand if your loan comes with any other costs, such as an origination fee, when it’s disbursed.

Finally, consider extra benefits the lender offers that could prove helpful. SoFi and Earnest, for example, offer the option to postpone payments temporarily if you run into financial hardship.

And SoFi holds networking events for its customers and offers career coaching services and an Entrepreneur Program for accepted applicants.

While your top priority is probably getting the lowest interest rate, it’s worth considering these other benefits, especially if you’re going to be working with this lender for years to come.

5. Pick your favorite offer and submit a full application

Once you’ve chosen a refinancing offer, it’s time to submit a full application. While your rate quote collected a few basic pieces of information, your application will go into more depth.

Along with personal details, you might need to provide documentation of your income, along with loan statements. If you’re applying with a cosigner, your cosigner will also have to fill out some paperwork.

Note that a full application comes with a hard credit inquiry, which could affect your credit score. Also, if the lender finds new information that affects your eligibility, your final offer could look different from your initial rate quote.

You might also speak with banks or credit unions

While fintech companies such as SoFi and Earnest offer online rate quotes, not every student loan refinancing provider is so high-tech.

You can still refinance with another institution, such as a bank or credit union, that doesn’t offer an online rate quote. But you might have to fill out a full application and submit to a hard credit check before seeing your deal.

So by completing these rate quotes, you can make sure you’ve landed on a refinancing offer with the lowest possible rate.

Shop around to save the most money on your student loans

If you were making a big purchase, such as a house or a car, you probably wouldn’t buy the first one you see. The same principle should apply when refinancing your student loans: Shopping around now can save you a lot of money down the road.

Adopting this mindset of rooting out the best deal will help you find the best student loan refinance rates. With a low rate, not only will you save money on interest, but you might even get out of debt ahead of schedule.

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