Best Options for Refinancing

The average borrower who refinances their student loans saves more than $17,000 in interest.

CompanyVariable RatesFixed RatesTerm (Years)Unique Features
LendKey logo
2.58% - 5.35%
2.99% - 5.60%
3.43% - 5.82%
3.91% - 6.32%
3.15% - 5.88%
3.57% - 6.18%
4.25% - 6.84%
4.97% - 7.26%
5
7
10
15, 20
• Loan size: $7.5k to $250k
• 18-month unemployment protection
• $24k minimum income
• Loans funded by community lenders
Earnest logo
2.57% - 5.50%
3.39% - 5.95%
3.77% - 6.19%
3.35% - 5.99%
4.00% - 6.39%
4.49% - 6.39%
5
10
15
• Loan size: $5k to $300k
• $45k minimum income
• Choose your own term length
CommonBond logo
2.81% - 5.74%
3.12% - 5.87%
3.62% - 6.12%
3.99% - 6.74%
3.35% - 5.87%
3.87% - 6.25%
4.37% - 6.50%
4.87% - 7.12%
5
7
10
15, 20
• Loan size: $5k to $500k
• Deferment options
• $50k minimum income
• Partners with Pencils for Promise
College Ave logo
2.75% - 6.75%
4.12% - 7.00%
4.37% - 7.25%
3.35% - 6.60%
4.54% - 6.90%
5.00% - 7.50%
5
10
15
• Loan size: $5k to $250k
• $75k min income w/o cosigner
• Easy application process - no forms to upload
Sofi logo
2.81% - 5.74%
3.11% - 5.86%
3.61% - 6.11%
3.99% - 6.74%
3.35% - 5.87%
3.87% - 6.25%
4.37% - 6.50%
4.87% - 7.12%
5
7
10
15, 20
• Loan size: $10k to unlimited
• 12-month unemployment protection
• Career assistance and networking events
• Also provides mortgages and personal loans
Credible logo
2.79% - 6.62%
4.00% - 6.87%
4.00% - 7.00%
3.35% - 6.60%
4.74% - 6.90%
5.20% - 7.50%
5
10
15
• Loan size: $5k to unlimited
• $24k minimum income
• Partners with multiple lenders
CompanyVariable RatesFixed RatesTerm (Years)Unique Features
LendKey logo
2.58% - 5.35%
2.99% - 5.60%
3.43% - 5.82%
3.91% - 6.32%
3.15% - 5.88%
3.57% - 6.18%
4.25% - 6.84%
4.97% - 7.26%
5
7
10
15, 20
• Loan size: $7.5k to $250k
• 18-month unemployment protection
• $24k minimum income
• Loans funded by community lenders
Earnest logo
2.57% - 5.50%
3.39% - 5.95%
3.77% - 6.19%
3.35% - 5.99%
4.00% - 6.39%
4.49% - 6.39%
5
10
15
• Loan size: $5k to $300k
• $45k minimum income
• Choose your own term length
CommonBond logo
2.81% - 5.74%
3.12% - 5.87%
3.62% - 6.12%
3.99% - 6.74%
3.35% - 5.87%
3.87% - 6.25%
4.37% - 6.50%
4.87% - 7.12%
5
7
10
15, 20
• Loan size: $5k to $500k
• Deferment options
• $50k minimum income
• Partners with Pencils for Promise
College Ave logo
2.75% - 6.75%
4.12% - 7.00%
4.37% - 7.25%
3.35% - 6.60%
4.54% - 6.90%
5.00% - 7.50%
5
10
15
• Loan size: $5k to $250k
• $75k min income w/o cosigner
• Easy application process - no forms to upload
Sofi logo
2.81% - 5.74%
3.11% - 5.86%
3.61% - 6.11%
3.99% - 6.74%
3.35% - 5.87%
3.87% - 6.25%
4.37% - 6.50%
4.87% - 7.12%
5
7
10
15, 20
• Loan size: $10k to unlimited
• 12-month unemployment protection
• Career assistance and networking events
• Also provides mortgages and personal loans
Credible logo
2.79% - 6.62%
4.00% - 6.87%
4.00% - 7.00%
3.35% - 6.60%
4.74% - 6.90%
5.20% - 7.50%
5
10
15
• Loan size: $5k to unlimited
• $24k minimum income
• Partners with multiple lenders

Student Loans Guy is not a lender – the rates above are updated on a regular basis, but are subject to change. You can find the SoFi rate disclaimer here.

 All of these companies offer a 0.25% discount on your rate when you sign up for auto-pay – this is included in the rates above. All of these lenders will refinance both private and federal loans as well as undergrad and graduate loans. You can also check your rates with each lender (with the exception of College Ave) without affecting your credit score. If you took care of your money and built your credit while you were in school, you’re already on the right track.

We’ve partnered with the leading student loan refinance providers, and will donate $20 to the Student Loans Guy Scholarship Fund for every loan that is refinanced through our site. Everyone wins – you save money and help someone else afford college at the same time!

Who Is Eligible for Refinancing?

Student loan refinancing companies reward borrowers with high credit scores and income levels. If you’re in good financial standing, these companies will consolidate your loans for you at a much lower interest rate – allowing you to save some real cash on your student loans. You can refinance both your federal and private loans, and consolidate them into one loan at the new lower interest rate. If you’re looking to refinance your federal loans, be aware that doing so would result in the loss of benefits from federal government programs like income driven repayment and Public Service Loans Forgiveness.  However, if you meet the following criteria (especially for your private loans), refinancing is a no-brainer:

Who Should Refinance?

→ You have at least $5,000 in outstanding student loans.

→ Your credit score is at least 680.

→ Your annual income is at least $40,000.

→ You graduated from an accredited university.

→ You are currently employed or will be in the next 90 days.

→ You have a history of making on-time payments.

→ You are a U.S. citizen or permanent resident.

Check your credit score and see if your school is on the accredited university list.

The higher your credit score and income, the better chance you’ll have to be accepted for refinancing and the lower your interest rate will be. If your income is over $40,000 and your credit score is above 680, you should definitely explore refinancing.

Benefits of Refinancing

→ Lower interest rates

→ Lower monthly payments

→ Consolidating multiple loans and servicers to one

→ No origination fees

→ No prepayment penalties

→ Lots of savings and getting out of debt faster!

With no prepayment penalties, you can make payments larger than the minimum amount required each month and get rid of your loans faster. Since student loans don’t have any prepayment penalties, we suggest making larger payments when you can, like when you receive a bonus. This will help you get rid of the loans faster. Even if you plan to pay off your loans as fast as possible, you’ll still benefit by refinancing. Decreasing your interest rate by 1% could save you thousands of dollars.

Should You Refinance?

To make your decision even easier, we’ve built a table comparing the rates on federal loans over the past 10 years with the rates currently being offered by student loan refinance companies. Assuming you meet the qualifying criteria, you should almost always refinance if you fit into any of the categories below:

You Should Refinance if…

  • You have private loans
    → rates are almost always higher than federal loans
  • You have graduate school loans
    → except if you work for the government or a nonprofit
    .
  • Your undergraduate loans are from 2010-11 or earlier

Compare Federal Interest Rates vs. What You Could Receive from Refinancing

Federal vs. Refinance interest rates

When Should You Refinance?

The earlier you refinance, the more money you’ll save. Even if you’re on the lower end of the eligible credit score and income levels, it is worth refinancing now if you can get a lower rate than you’re currently paying. You can always refinance again to an even lower rate if your credit score and income improve.

Refinance companies previously wanted to see a history of making your student loan payments on time before approving you. Now you can look to refinance your student loans when you graduate, as long as you have a relatively good-paying job lined up. Companies like  SoFi  will even honor your grace period, which means you won’t have to make your first payment until six months after you graduate.

What’s the Application Process for Refinancing?

1. Apply online with one of our lending partners.

2. See if you’re approved.

3. Compare your options – rates (fixed vs. variable), term length, and monthly payment amount.

4. Choose your preferred loan offer.

5. Upload any verification documents and sign the paperwork electronically.

You’ll need to submit: your name, address, credit score, income, and school.

Some lenders will request paperwork to verify your income or education after you are accepted and choose a rate.

How Are These Companies Able to Do This?

Student loan refinancing may be one of the greatest inventions in personal finance. It allows borrowers in good standing to lower their interest rates and save significantly on their student loans.  SoFi  was the first company to begin offering this as an option in 2012, and others, like  College AveLendKeyCommonBond , and  Earnest , have followed. Since then, more than $20 billion in student loans have been refinanced.

Federal student loans are different from other financial products (for example, credit cards, auto loans, and mortgages) in that the government provides a majority of these loans, and it does not factor in your credit score and income when giving you a loan. Someone with a 500 credit score can receive the same rate as someone with an 800. This provides an equal opportunity for anyone to attend college, even if you have a low credit score or low income.

Which Refinance Company Is the Best?

You should generally focus on finding the lowest rate possible, but you might also be interested in some of the perks that  SoFi  offers, like career support and networking events. We suggest sticking with the 5, 7, or 10-year term lengths unless you have a massive amount of debt, like medical or dental school loans. Other companies that provide student loan refinance (but are not currently part of our scholarship program) include Citizens Bank and Purefy. We will provide in-depth profiles and walk through the application process for each refinance company in a future post.

Check out Earnest

Check out SoFi

Check out College Ave

Fixed vs. Variable Rates

Fixed rate loans have an interest rate that will never change over the life of the loan. This means your payment amount will be the same every month. You also know the amount of interest you’ll be paying over the life of the loan. All government loans have fixed rates, and all refinance companies provide fixed rate options.

Variable rate loans have an interest rate that fluctuates over time. These are generally lower than fixed rates, but can change. This means that if your rate changes, so does your monthly payment amount. Variable rates are tied to the 1 month LIBOR rate, which has been historically low over the past seven years and will likely rise over time.  

If you plan to pay off your student loans in the next few years, you’re probably better off going with the lower variable interest rate. However, if you’re concerned about variable rates rising over time and want to lock in your interest rate and monthly payment amount, you should stick with a fixed rate plan.

Our Student Loan Refinancing Calculator

To help you make the best decisions for your unique situation, we created the Student Loan Repayment spreadsheet. Download the sheet to input your own loan information – the amount owed, your interest rate, and term length. Our tool will then calculate your monthly payment amount and how much money will go to interest and to paying off your balance. You can also input different interest rates you could receive from refinancing to see how much your monthly payment and interest savings will be over the life of your loan. 

For example, if you just finished graduate school and have $50,000 in student loans at 6.31%, nearly half of your initial monthly payment will go toward interest, and you’ll pay more than $17,000 in interest over ten years. If you refinance to 4.0%, your monthly payment decreases by $56, and you’ll only pay around $10,000 in interest over 10 years – a savings of nearly $7,000. 
Refinance interest savings chart

Refinancing May Not Be For Everyone

If you don’t meet the refinancing criteria and are having trouble with your monthly payments, you can always explore income-driven plans. If you work for the government or at a nonprofit, you can take advantage of Student Loan Forgiveness Plans.

For everyone else (approximately 75% of the population), you likely want to get rid of your debt as fast as possible and minimize the amount of compounding interest on your loans. If your interest rate is over 4 or 5%, you should definitely consider refinancing. We suggest paying down debt as fast as possible, but you might as well get a lower interest rate on your loan while you do.

If you don’t qualify for refinancing or forgiveness, your best bet is to make larger payments toward your higher interest loans for now, and work your way into a position to refinance.

If you’ve refinanced your student loans, we’d love to hear your story! We’ll regularly feature a new Student Loan Story from one of our members in the Student Loans Guy newsletter. 

Summary:

  • Refinancing can save you thousands of dollars on your student loans and lower your monthly payments.
  • Refinancing consolidates your student loans into one simple monthly payment.
  • You need to have a good job and credit score to qualify for refinancing.
  • You can apply and get your rate within minutes.
  • We will donate to the Student Loans Guy scholarship fund for every loan that is refinanced through our site.

Disclosure: Student Loans Guy is a free site that provides unbiased information on financial products. In order to keep the lights on, we are compensated when you get a product from one of our partners. Part of this goes to the Student Loans Guy Scholarship and allows our site to always remain free to our readers.

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