A student loan refinance involves replacing your old student loans with a new student loan from a private lender. A student loan refi can be used to refinance private student loans, federal student loans, or a combination of the two. Borrowers may choose to refinance some one or more student loans and a portion or the entire amount of their student loan debt.
Student loan refinancing offers numerous potential benefits, including:
If a student loan refi can deliver one or more of the benefits we listed above, then it’s probably worth getting one. Here’s a checklist of things to consider before going ahead and contacting the best student loan refinance providers.
The rules for applying for refi student loans vary slightly from lender to lender. However, most private student loan refinancing companies accept borrowers who meet the following conditions:
The best student loan refinance companies have strict lending requirements, typically reserving the best rates for borrowers that can demonstrate the following:
If you’re unable to qualify for the best student loan refinance rates on your own, then you may be permitted to bring a cosigner. A cosigner is simply a person you trust (such as a parent, relative or close friend or associate) who has strong credit.
The main purpose of refinancing a student loan is to get a lower interest rate and, as a consequence, lower monthly payment. Based on our survey of the best refinance student loan companies, APRs currently start from 2.15% - 4.54% for fixed-rate loans and 1.87% to 2.94% for variable loans.
Another good reason to get a student loan refi is the flexible repayment terms, which typically range from 5-20 years. Some lenders offer multiple repayment options, such as 5, 7, 10, 15, or 20 years.
A third good reason to refinance is the fees, or rather lack of them. The best student loan refinance companies have no origination fees, application fees, and no prepayment fees. They only make money from interest.
Finally, some private student lenders offer a 0.25% rate discount to borrowers who use autopay to pay their student loans. Other potential rewards include refer-a-friend bonuses and special offers on various other financial products and services.
If you have private student loans, then a student loan refinance is generally the best option for reducing and managing your debt. However, if you have federal loans, then you also have the option of student loan consolidation. To consolidate a student loan (or loans), simply fill out a free Federal Direct Consolidation Loan Application and Promissory Note and confirm the loans you wish to consolidate.
People with federal student loans may also be able to qualify for student loans loan forgiveness or cancellation under various circumstances.
The student loan refinance market is a competitive one, with dozens of lenders out there competing for borrowers’ attention. As a person with student loans, you have the power to find a great deal. To begin, shop around and compare the best student loan refinance companies on key factors like APR and repayment terms. Once you find the one that’s right for you, it shouldn’t take more than 10-15 minutes to submit a formal application online and get your student loan refi confirmed.
* Credible is so confident in the personal loan rates you’ll find on Credible, we’ll give you $200 if you find and close with a better rate elsewhere. See full terms and conditions.
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
Information advertised valid as of 4/12/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.
Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
The actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 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%. Please note, that they are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX.