What Credit Score Do You Need to Refinance Student Loans?

Student loan refinancing refers to combining multiple student loans into one new loan with a private lender, such as a bank, credit union, or online lender. You can refinance private student loans, federal student loans, or both with a private lender. 

If you only have federal student loans, combining them using the federal Direct Consolidation program often makes the most sense. Not only will you retain your federal benefits, such as loan forgiveness and income-driven repayment plans, but there are no credit score requirements.

You’ll generally need a good credit score of at least 670 to qualify for private student loan refinancing. However, each private lender sets its own approval requirements. Read on to find out more about the credit score you need to refinance your student loans.  

What is the minimum credit score needed to refinance student loans? 

Many lenders require a good credit score or better to refinance student loans. The minimum often falls between 670 and 700, but this varies by lender. Some offer more flexibility, and others require higher credit scores.

Credit scores are an essential part of the refinancing process. They serve as an indicator of an applicant’s creditworthiness and are used to evaluate the risk associated with the loan. A good credit score suggests a lower risk of default, making the borrower more attractive to lenders. 

The range can vary depending on the credit score model the lender uses, but credit scores are often classified as follows: 

• Excellent or exceptional: 800 – 850
• Very good: 740 – 799
• Good: 670 – 739
• Fair: 580 – 669
• Poor: 300 – 579

Lenders set their minimum credit scores based on various factors, including their financial health, economic or market conditions, and their risk tolerance. These requirements can change over time as lenders revise their strategies, the economy fluctuates, or the lending environment changes.

Credit scores are significant in student loan refinancing because they affect the interest rates lenders offer. A higher credit score often translates to a lower interest rate, which can lead to substantial savings over the life of the loan. 

For these reasons, borrowers considering student loan refinancing should research and compare various lenders to find one with credit score requirements that align with their financial situation and needs.

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Tip

You can check your credit score in several ways. Many credit card issuers, banks, and credit unions allow customers to check their credit scores for free. Plus, you can buy a credit monitoring service to view your credit score and alert you to changes to your credit report. 

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The student loan credit score requirements for several popular lenders are below:

Lender	Minimum credit score
SoFi	650
Credible	670
Earnest	665
Sparrow	650
NaviRefi	680
College Ave	Mid-600s
Laurel Road	670
Citizens Bank	High 600s
MPOWER	None
PNC Bank	Not disclosed; satisfactory credit history required

Is there a minimum credit score for student loan consolidation? 

Student loan refinancing means you get a new student loan to combine multiple private, federal, or both types of student loans into a new loan. Student loan consolidation refers to combining multiple federal student loans into a new loan. There’s no minimum credit score requirement for a Direct Consolidation Loan.

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Tip

You can see whether you have federal student loans by logging in to your Federal Student Aid (FSA) account. Only federal loans are listed. All student loans (federal and private) are on your credit report, which you can access for free at AnnualCreditReport. 

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Unlike private student loan refinancing, you don’t need to meet any creditworthiness criteria to consolidate your federal student loans. You just need multiple eligible federal student loans and apply for a Direct Consolidation Loan by logging in to your FSA account. 

When you refinance your student loans with a private lender, your interest rate is based mainly on your credit score. If you have good-to-excellent credit, you might get a lower interest rate with the refinance. 

Your fixed interest rate on a federal Direct Consolidation Loan is not based on your creditworthiness. Instead, the rate is based on the weighted average of the federal loans you’re consolidating. The final rate on your consolidation loan is rounded up to the nearest 0.125%—so you won’t get a lower rate if you go this route. 

Other student loan refinancing eligibility requirements 

Besides your credit score, you must meet several other eligibility requirements to qualify for student loan refinancing. Each lender sets its own loan criteria, but some of the most common include:

• Employment history: A consistent employment history is often a requirement. Lenders may prefer borrowers employed for a minimum duration (e.g., at least two years with the same employer or industry), showing financial stability and the ability to maintain a steady income.
• Income stability: Lenders look for a stable and sufficient income to ensure borrowers can make monthly payments. A steady income stream is crucial, and some lenders may have specific income thresholds to qualify for student loan refinancing.
• Debt-to-income ratio (DTI): DTI is a metric that assesses an individual’s monthly debt payments relative to their income. Lenders generally prefer a lower DTI ratio, indicating a healthier financial situation and an increased ability to handle additional debt from refinanced loans.

A credit score measures how much debt the applicant has and how well they’ve repaid it. These extra criteria—employment history, income stability, and DTI—complement the credit score by giving the lender an overall view of an applicant’s financial health. 

For perspective, a person could have an excellent credit score, but a review of their employment history, income stability, and DTI could suggest their overall financial condition is weak. 

For instance, if the person doesn’t have a steady job or income, there’s no guarantee they’ll be able to make their payments on time, something lenders consider risky. A higher DTI is also considered risky; it suggests the person might have trouble making their payments in the future.

Not all lenders have identical eligibility requirements. Some may be more lenient than others, and vice versa. Shopping around and comparing several offers before refinancing your student loans is essential.

How to refinance student loans with a low credit score 

If you have a low credit score, you may still be able to refinance your student loans. However, before applying, you might need to meet additional requirements, such as adding a cosigner or boosting your credit score.

Add a cosigner

Adding a cosigner is one way to refinance your student loans with a low credit score. A cosigner is a person who agrees to repay your loan if you don’t do so as agreed. A well-qualified cosigner can help you qualify for a lower interest rate and better terms, even with a low credit score.

Remember, if you don’t repay the loan as agreed, the responsibility will fall to your cosigner. The student loan will be reported on both your credit reports, including your payment history. Poor payment performance could hurt your cosigner’s credit and your relationship with them. 

Our expert weighs in: Risks and benefits of cosigners

Erin Kinkade

CFP®

The borrower can benefit by increasing the probability of being approved for the refinance or getting better rates and terms. Making on-time payments and paying off the loan should help the cosigner’s and borrower’s credit scores. Most of the risk is on the cosigner, where any missed or late payments reflect on their credit report. If the original borrower defaults, the full repayment is the cosigner’s responsibility. Tread lightly, and make this a careful and well-thought-out decision for both parties.

Boost your credit score

If you don’t have a cosigner, you may be able to improve your credit score and qualify for a lower interest rate on your student loans by taking steps to improve your credit history. Actions you can take to improve your credit score include:

• Make your payments on time: Your payment history makes up about 30% to 40% of your credit score.
• Keep your credit utilization ratio low: Another credit score component, this ratio makes up about 30% of your credit score. It measures your outstanding revolving debt balances (e.g., credit cards) compared to your credit limits. A good rule of thumb is to keep your credit utilization at less than 30%. 
• Build a positive credit history: The longer you’ve had your credit accounts, the more history you can build. Over time, if you make your payments on time and keep your debt to a reasonable level, your credit score should improve. 

Our expert recommends

Erin Kinkade

CFP®

I typically would recommend that borrowers with lower credit scores wait to refinance until they have worked on improving their credit score by making on-time debt payments, setting up payment plans where available (with medical bills, for example), and increasing income via a raise or side job. Raising your income lowers your DTI. Creating a budget and sticking to it as much as possible will help you reach this goal.

Should you refinance with a low credit score? 

For individuals with a low credit score considering student loan refinancing, it is essential to consider your options before making a decision. Here’s a guide to help you determine whether refinancing is the right move for you:

Consider refinancing if…	Consider not refinancing if…
✅ You have a good-to-excellent credit score.	❌ Your credit score is low.
✅ Your current interest rate is high.	❌ Your current interest rate is low.
✅ You have sizable private student loan balances.	❌ You only or mostly have federal student loans.
✅ It will further your financial goals.	❌ It will set you back from achieving your goals.

As you’re deciding whether refinancing is right for you, consider these factors: 

• Credit score: One of the most critical factors lenders consider when evaluating your student loan refinance application is your credit score. Qualifying for a refinance loan with a low credit score can be difficult, and you may get a higher rate than if you had a higher credit score.

• Interest rate: The interest rate on your current student loans is another crucial factor. Refinancing can save you money in the long run if you have a high interest rate. However, refinancing may have little benefit if your interest rate is low.
• Private student loan balances: The amount you owe on your private student loans is worth considering. If you have a large balance, refinancing can reduce your monthly student loan payments and make it easier to manage your debt.
• Student loan type: If you mostly or only have federal student loans, it’s often best to avoid refinancing them with a private student loan. If you refinance with a private loan, you’ll lose access to helpful federal benefits, such as loan forgiveness, deferment or forbearance, and income-drive repayment (IDR) plans. 
• Financial goals: Consider what you hope to achieve by refinancing your student loans. This may be a solid option to save money in the long run by getting a lower rate. However, if you lengthen your repayment term, the loan may cost you more in the long run. 

Once you’ve considered these factors, you can decide whether refinancing your student loans is right for you. If you refinance your student loans, shop for the best interest rate and terms.

Alternatives to student loan refinancing if you have poor credit 

Other options are available if you can’t refinance your student loans because you have a low credit score. Alternatives to student loan refinancing include:

• Loan deferment or forbearance: Ask your lender for a loan deferment or forbearance to lower your payments temporarily. Not all private lenders offer this option, but you should still contact your lender. Even if it isn’t an option, your lender may offer other options if you can’t make your payments. 
• Federal Direct Loan Consolidation: Consolidate your federal student loans into a new loan with a longer repayment term. Your rate won’t be lower, but your monthly payment will. You’ll pay more interest in the long term, which could make your debt more manageable. 
• Federal IDR plan: Apply for a federal student loan IDR plan to lower your payments. With this type of plan, your payments are based on a percentage of your income relative to your family size. It can be a terrific way to make your student loan payments more manageable. 
• Federal student loan forgiveness: With IDR plans, any remaining balance on your loan may be forgiven after 20 to 25 years. Plus, you may be eligible for loan forgiveness if you’ve worked in certain industries for years (e.g., public service). Contact your loan servicer to discuss this option. 

Consider meeting with a financial professional specializing in student loans to explore your options and find the best solution.