How Soon Can You Refinance Student Loans?


Maybe you’ve heard the buzz surrounding student loan refinancing — the fact that you could save thousands of dollars in interest and merge your loans into one simple monthly payment.

Plus, private refinancing companies are rolling out unique perks to their customers. SoFi, for example, offers unemployment protection and a cool entrepreneur program, while CommonBond commits to its social promise to do good and give back to the community.

There can be a lot of benefits to student loan refinancing. So when can you give it a shot?

How Soon Can I Refinance Student Loans?

For eligible candidates with good credit and stable income, the sooner you refinance, the better. This is because of the potential interest savings.

Let’s say you have a Graduate PLUS loan with an interest rate of 7% and a $50,000 balance. If you refinance to 4.99% over a 10-year repayment period, you could save roughly $50 per month. Even more impressive, however, is that you’d save more than $6,000 in interest over the life of the loan.

Imagine what you could do with that extra cash: you could put more money toward principal payments, save for a rainy day, or invest for retirement.

Even if you just graduated, you could benefit from refinancing. For example, SoFi and CommonBond honor grace periods, so if you just graduated and don’t have to pay your loans right away, you could benefit from a lower interest rate.

The catch? Most refinancing companies want you to have a job lined up already and sufficient income to pay back your loans. If you’re lucky enough to score a job right after graduation, you could save money on interest before your first payment is even due.

Some refinancing companies, such as Citizens Bank, want to see positive repayment history before you are eligible for refinancing, so you may not be eligible right after graduation. As part of the eligibility requirements for Citizens Bank, you must make three on-time payments and show proof of graduation.

In addition, most refinancing companies require you to complete your degree in order to be eligible — but not all of them. If you didn’t complete your degree, you could refinance through Citizens Bank. However, you’ll have to prove you’ve made 12 on-time payments before you refinance.

In some instances, certain refinancing companies, like Laurel Road, will only refinance student loans from a certain degree, such as an MBA or law degree.

Finally, you must be in good standing on your student loans in order to refinance. In other words, lenders are looking for borrowers with on-time payments, who are not in default.

The sooner you refinance the better, but it’s important to look at eligibility requirements for each lender, as they all have different standards.

When You Can’t Refinance Student Loans

If you’re still in school, unfortunately, you won’t be eligible for refinancing until you graduate.

Additionally, you will have to meet credit requirements that, depending on your credit history, could make refinancing difficult. For example, most private lenders expect you to have a credit score of around 700, though each lender will vary.

You also need to have a high enough, stable  income (as dictated by the lender) to pay back your loans. That means refinancing might not be an option for lower income borrowers. The good news? If you have federal student loans, income-based repayment may be a better option anyway. If your income is truly an issue, you could qualify for payments that amount to as little as zero dollars — yes, you read that correctly.

As mentioned, if you are currently in default, you won’t be eligible for student loan refinancing, either. If you have federal loans and are facing default, you could rehabilitate your loans through a Direct Consolidation Loan.

Typically, student loan refinancing companies look at your credit score, employment, salary, and payment history to determine if you are eligible. As noted above, some lenders may want you to have a certain type of degree. It’s important to look at the eligibility requirements of each lender before pursuing refinancing.

Before You Refinance Student Loans…

Refinancing may seem like a sweet deal, but there are several important things you should know before making a decision. If you have federal student loans, you’ll lose the option to pursue benefits such as loan forgiveness or an income-driven repayment plan.

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 forfeit federal student loan protections. If you only have private student loans to begin with, refinancing may be less of a risk.

Is Now the Right Time?

So you know refinancing sooner rather than later is a good option. You know what you may be giving up if you pursue this option. But is it the right time for you to refinance? Before you begin the process of refinancing, start preparing first.

You can check your credit reports from the three major bureaus at and get your free credit score at Credit Karma to find out where you stand credit-wise. Also make a list of all your outstanding loan amounts and interest rates. Look up eligibility requirements for all lenders.

Now may be a good time to refinance if you have a good credit score (around 700) and a stable income, with a positive repayment history. Student loan interest rates are at historic lows, which could mean big savings for borrowers. On the other hand, if you are working in the public sector or if your salary is less than what you owe in student loans, you may want to pursue federal repayment and/or forgiveness options.

As a borrower, it’s important to look at all of your repayment options, including refinancing, to see what is the best option for you and your financial situation.

Interested in refinancing student loans?

Here are the top 6 lenders of 2018!
LenderRates (APR)Eligible Degrees 
Check out the testimonials and our in-depth reviews!
2.75% - 7.24%Undergrad
& Graduate
Visit SoFi
2.57% - 6.39%Undergrad
& Graduate
Visit Earnest
2.57% - 7.12%Undergrad
& Graduate
Visit CommonBond
2.99% - 6.99%Undergrad
& Graduate
Visit Laurel Road
2.74% - 7.26%Undergrad
& Graduate
Visit Lendkey
2.89% - 8.33%Undergrad
& Graduate
Visit Citizens
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