- Refinance and consolidate both federal and private student loans
- Rates as low as 2.51% APR for variable rates
- Rates as low as 3.90% APR for fixed rates
- 5, 7, 10, 15, or 20 year repayment terms
- No application fees, origination fees, or pre-payment fees
- Unemployment protection is available
- Easy application process
8 Best Companies to Refinance and Consolidate Student Loans in 2018
Updated: 8/2/2018
Our research, news, ratings, and assessments are scrutinized using strict editorial integrity. In full transparency, our company may receive compensation from partners listed on our website. Learn more about how we make money by visiting our advertiser disclosure.
Deciding where to refinance or consolidate your student loans can be difficult. We help borrowers compare the best refinance and consolidation companies in one place.
All of the banks and lenders below allow borrowers to refinance student loans, as well as consolidate them during the process, but to avoid any confusion, here is the difference between the two:
- Student Loan Refinance: The process of replacing an existing loan with a potentially lower interest rate loan.
- Student Loan Consolidation: The process of combining multiple loans into one new loan.
Both private and federal student loans can be refinanced with a private lender. If you don’t meet the requirements of a certain lender, a cosigner can help improve your application.
Compare the Best Companies to Refinance Student Loans
Top 8 Student Loan Refinancing Companies: In-Depth Reviews
Each student loan refinance lender has its own specific underwriting criteria, so your approval odds may be higher at one lender over another. Our detailed lender reviews help you better understand what you can expect if you refinance or consolidate with a company below.
Here are LendEDU’s picks for the 8 best student loan refinancing and consolidation companies:
- SoFi
- Earnest
- LendKey
- Education Loan Finance
- Citizens Bank
- College Ave
- Splash Financial
- CommonBond
1. SoFi
Check Rate
Clicking the button above will take you to SoFi’s secure website where you can check your rate before you apply without hurting your credit score
Fixed APR
3.90% - 7.80%1
Variable APR
2.51% - 7.55%1
Loan Terms
5, 7, 10, 15 or 20
Applicable Fees
No origination or prepayment fees
Credit Needed
Good/Excellent
Fixed rates from 3.899% APR to 7.804% APR (with AutoPay). Variable rates from 2.510% APR to 7.554% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.510% APR assumes current 1 month LIBOR rate of 2.10% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for student loan refinancing. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
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Additional Details About SoFi
About SoFi
SoFi, aka Social Finance, has quickly positioned itself as one of the best student loan refinance lenders on the market.
SoFi was founded by a group of Stanford business students who wanted to help their peers escape from student debt with lower interest rates. The program launched at Stanford in 2011 and has quickly grown nationwide.
The Basics
- Fixed APR: 3.90% - 7.80%1
- Variable APR: 2.51% - 7.55%1
- 5, 7, 10, 15, or 20 Years
- Loan Amounts: $5,000 – No Max
- Eligible Degrees: Undergraduate and Graduate
- Eligible Loan Types: Federal and Private
- Fees: No Fees
- 0.25% interest rate reduction for setting up AutoPay
- 0.125% interest rate discount on other loans for being a SoFi member
- Exclusive events for SoFi members
Bottom Line
SoFi is looking for well educated professionals with good income and requires applicants to have good credit and a strong repayment history. SoFi primarily focuses on prime and super-prime borrowers, with an average borrower FICO score of 780 and income of approximately $150,000. The SoFi student loan refinance and consolidation program is a great option for people who want:
- Low interest rate options
- Flexible term length options
- Great customer service
- Quick application process
2. Earnest
- Refinance and consolidate both federal and private student loans
- 5 - 20 year repayment terms
- Variable rates as low as 2.57% APR
- Fixed rates as low as 3.89% APR
- Data-driven customer evaluation helps you get qualified
- Zero application fees, origination fees, or pre-payment fees
Check Rate
Clicking the button above will take you to Earnest’s secure website where you can check your rate before you apply without hurting your credit score
Fixed APR
3.89% - 6.32%
Variable APR
2.57% - 5.87%
Loan Terms
5 to 20
Applicable Fees
No origination or prepayment fees
Credit Needed
Good/Excellent
Offered terms are subject to change. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
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Additional Details About Earnest
About Earnest
Earnest is one of the best student loan refinance and consolidation lenders that we have reviewed.
Located in San Francisco, Earnest stands out from most of the other student loan refinancing companies by using different types of data to determine eligibility for applicants who wish to refinance student loans. This data helps determine how likely individuals are to pay back their debt and the best options for all parties involved.
The Basics
- Fixed APR: 3.89% - 6.32%
- Variable APR: 2.57% - 5.87%
- 5 to 20 Years
- Loan Amounts: $5,000 – No Max
- Eligible Degrees: Undergraduate and Graduate
- Eligible Loan Types: Federal and Private
- Fees: No Fees
- 0.25% interest rate reduction for setting up AutoPay
- Temporarily defer payments for up to 3 years
- Skip one monthly payment each year
- Switch between a variable and fixed interest rates every 6 months
Bottom Line
Because Earnest uses many different factors to determine eligibility, there is more likely to be something on your application that causes you to be rejected compared to other student loan refinancing companies. In addition, the application process is more extensive and takes a longer time due to the variety of data points that are analyzed.
The company’s student loan refinance and consolidation program is a good option for those who want:
- To save money with a lower interest rate
- A flexible repayment plan
- Eligibility to be based off more than credit score
3. ELFI - Education Loan Finance
- Refinance and consolidate both federal and private student loans
- 5, 7, 10, 15, and 20 year repayment terms
- Variable rates as low as 2.55% APR
- Fixed rates as low as 3.09% APR
- $200 Fast Track Bonus for completing paperwork in 30 days
- Zero application, origination, or pre-payment fees
Check Rate
Clicking the button above will take you to ELFI’s secure website where you can check your rate before you apply without hurting your credit score
Fixed APR
3.09% - 6.69%
Variable APR
2.55% - 6.01%
Loan Terms
5, 7, 10, 15 or 20
Applicable Fees
No origination or prepayment fees
Credit Needed
Good/Excellent
Offered terms are subject to change. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
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Additional Details About ELFI
About ELFI
In 2015, SouthEast Bank of Tennessee launched its student loan refinancing and consolidation program to borrowers through ELFI, or Education Loan Finance.
Although the ELFI program is a relative newcomer to the student loan refinance and consolidation scene, its management has over 30 years of experience in the student lending industry.
The Basics
- Fixed APR: 3.09% - 6.69%
- Variable APR: 2.55% - 6.01%
- 5, 7, 10, 15 or 20 Years
- Loan Amounts: $15,000 – No Max
- Eligible Degrees: Undergraduate and Graduate
- Eligible Loan Types: Federal and Private
- Fees: No Fees
- If you accept your offer within 30 days of approval, receive a $200 cash bonus
- Postpone payments for up to 12 months if facing financial hardship
Bottom Line
Though ELFI displays some of the lowest student loan refinancing rates in the industry, it does not necessarily mean you will receive a lower rate with them as compared to other lenders. Each lender has a different eligibility criteria and underwriting process so your offered rate, if approved, may be higher than those from other lenders.
4. LendKey
- Great rates from a community of banks and credit unions
- Refinance and consolidate both federal and private student loans
- 5, 7, 10, 15, and 20 year repayment terms
- Variable rates as low as 2.76% APR
- Fixed rates as low as 3.15% APR
- Zero application, origination, or pre-payment fees
Check Rate
Clicking the button above will take you to LendKey’s secure website where you can check your rate before you apply without hurting your credit score
Fixed APR
3.15% - 8.54%
Variable APR
2.76% - 7.90%
Loan Terms
5, 7, 10, 15 or 20
Applicable Fees
No origination or prepayment fees
Credit Needed
Good/Excellent
Offered terms are subject to change. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
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Additional Details About LendKey
About LendKey
Another great option to refinance and consolidate your student loans is LendKey. LendKey is more than just a single company. LendKey is a collection of over 320 not-for-profit credit unions and community banks from across the U.S.
Local credit unions come together to help borrowers refinance student loans. The participating lenders work together to compete against major banks and lenders.
The Basics
- Fixed APR: 3.15% - 8.54%
- Variable APR: 2.76% - 7.90%
- 5, 7, 10, 15 or 20 Years
- Loan Amounts: $5,000 – $125k (Undergraduate Degree), $250k (Graduate Degree), $300k, (Medical Degree)
- Eligible Degrees: Undergraduate and Graduate
- Eligible Loan Types: Federal and Private
- Fees: No Fees
- 0.25% interest rate reduction for setting up AutoPay
- Cosigner release after 12 months of on-time payments
- There is no penalty for paying off debt early and borrowers can have up to 4 years of interest-only payments
Bottom Line
LendKey requires borrowers to have a decent credit score, an average debt-to-income ratio, and a yearly income of over $24,000. It has higher approval ratings because the company evaluates each borrower on a case-by-case basis.
The first part of the application should only take a few minutes to complete. If approved, applicants are expected to join the local credit union that will provide the financing. Credit unions usually require a small deposit for membership. In most cases borrowers will need to deposit $1 to $20 to gain access to the credit union. A $5 deposit is a small price to pay for great customer service and some of the best refinance rates.
Refinancing student loans with LendKey could be a good fit for people who want:
- Cosigner release after 12 months of on-time payments
- A credit union experience
- A personal approach to borrowing
5. Citizens Bank
- Online application takes 10 minutes to complete
- Refinance and consolidate both federal and private student loans
- Rates as low as 2.75% APR for variable rates2
- Rates as low as 3.50% APR for fixed rates2
- 5, 10, 15, and 20 year repayment terms
- Zero application fees, origination fees, or pre-payment fees
- Must have at least $10,000 in student loan debt to refinance
Check Rate
Clicking the button above will take you to Citizens Bank’s secure website where you can check your rate before you apply without hurting your credit score
Fixed APR
3.50% - 8.69%2
Variable APR
2.75% - 8.20%2
Loan Terms
5, 10, 15 or 20
Applicable Fees
No origination or prepayment fees
Credit Needed
Good/Excellent
Variable rate, based on the one-month London Interbank Offered Rate ("LIBOR") published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of July 1, 2018, the one-month LIBOR rate is 2.10%. Variable interest rates range from 2.75%-8.20% (2.75%-8.20% APR) and will fluctuate over the term of the borrower's loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% - 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
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Additional Details About Citizens Bank
About Citizens Bank
Citizens Bank is one of the more well-known companies that refinances student loans. As the 13th largest retail bank with over $130 billion in assets and 1,200 branches, Citizens Bank offers many options and benefits for borrowers looking to save money on their student loans. The company aims to make it easy to refinance and consolidate student loans.
The Basics
- Fixed APR: 3.50% - 8.69% APR2
- Variable APR: 2.75% - 8.20% APR2
- 5, 10, 15 or 20 Years
- Loan Amounts: $10,000 – $90K (Undergraduate), $350k (Graduate)
- Eligible Degrees: Undergraduate and Graduate
- Eligible Loan Types: Federal and Private
- Fees: No Fees
- 0.25% interest rate reduction for setting up AutoPay
- Additional 0.25% interest rate reduction for having Citizens Bank account
Bottom Line
You can apply on the company's website in about 15 minutes. Once you apply, Citizens Bank will run an initial credit check to determine if you're eligible. If you meet the initial requirements, you will be asked to upload certain documents that the underwriting team will use to determine if you qualify.
One of the greatest things about Citizens Bank is its 24/7 customer service to help you at any point along the process, whether you are just applying to refinance student loans or already have a loan.
Citizens Bank also offers great resources to help borrowers manage their debt. On the Student Services section of the website, there is an Education Refinance Loan Calculator, a College Savings Goal Calculator, and even a calendar to track payments.
6. College Ave Student Loans
- Refinance and consolidate both federal and private student loans
- Rates as low as 2.88% APR for variable rates3
- Rates as low as 3.25% APR for fixed rates3
- 5 to 15 year repayment terms3
- No application or origination fees
- Apply in 3 minutes to get an instant credit decision
- Choose between immediate full payments or 2 years of interest-only
Check Rate
Clicking the button above will take you to College Ave’s secure website where you can check your rate. Checking your rate may impact your credit score.
Fixed APR
3.25% - 7.25%3
Variable APR
2.88% - 6.98%3
Loan Terms
5 to 153
Applicable Fees
No origination or prepayment fees
Credit Needed
Good/Excellent
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC, or Nationwide Bank, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
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. Rates are valid as of 7/13/2018. Variable rates may increase after consummation.
This informational repayment example uses typical loan terms for a refi borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Loan Terms - This informational repayment example uses typical loan terms for a refi borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate ("APR"): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Min/Max Refi Loan Amount - $5,000 is the minimum requirement to refinance. The maximum loan amount is $250,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
Nationwide, The Nationwide N and Eagle, Nationwide is on your side and Nationwide Bank are service marks of Nationwide Mutual Insurance Company. (c)2018 Nationwide
Rates are valid as of 7/13/2018.
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Additional Details About College Ave Student Loans
About College Ave Student Loans
Founded in 2014, College Ave Student Loans is a leading provider of student loan refinancing and consolidation. College Ave offers low interest rates and flexible repayment options.
The Basics
- Fixed APR: 3.25% - 7.25% APR3
- Variable APR: 2.88% - 6.98% APR3
- 5 to 15 Years3
- $5,000 – $150k (Undergraduate/Graduate), $250k (Professional)
- Eligible Degrees: Undergraduate and Graduate
- Eligible Loan Types: Federal and Private
- Fees: No Fees
- 0.25% interest rate reduction for setting up AutoPay
- Option to make interest-only payments after disbursement for 2 years
Bottom Line
Keep in mind that every interest rate stated in this review factors in the 0.25% AutoPay discount. You also might be able to find a lower rate with a different lender, depending on your creditworthiness.
College Ave is one of the only companies to offer an interest-only payment option for 24 months. They are a great choice for undergraduates, graduates, and parents interested in:
- Low interest rates
- Flexible payment term options
- An easy application process
7. Splash Financial
- Refinance and consolidate your student loans with your spouse
- Rates as low as 2.72% APR for variable rates
- Rates as low as 3.25% APR for fixed rates
- Cosigner release available after 12 months of on-time, consecutive, payments
- Zero application, origination, or prepayment fees
- Forbearance is available on a case-by-case basis
Check Rate
Clicking the button above will take you to Splash’s secure website where you can check your rate. Checking your rate may impact your credit score.
Fixed APR
3.25%-7.03%
Variable APR
2.72%-7.46%
Loan Terms
5 to 20
Applicable Fees
No origination or prepayment fees
Credit Needed
Good/Excellent
Offered terms are subject to change. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
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Additional Details About Splash Financial
About Splash Financial
Splash Financial is a Cleveland-based student loan refinancing company that was founded in 2013 and it currently has an A+ rating with the Better Business Bureau.
The lender’s original focus was refinancing medical school student loans, but in 2018, the company expanded its offerings to include student loan refinancing and consolidation for all private and federal student loans.
Splash Financial’s competitive rates and flexible repayment terms are worth considering if you want to refinance student loans.
The Basics
- Fixed APR: 3.25% - 7.03%
- Variable APR: 2.72% - 7.46%
- 5 to 20 Years
- $7,500 – $350,000
- Eligible Degrees: Undergraduate and Graduate
- Eligible Loan Types: Federal, Private, and Parent PLUS student loans
- Fees: No Fees
- Ability to refinance student loans for two borrowers into one loan
- Cosigner release available after 12 months of on-time, consecutive, payments
- $500 referral bonus
Bottom Line
In order to consolidate and refinance student loans with Splash, applicants must have graduated with a bachelor’s or graduate degree from a qualified institution. Furthermore, applicants must have a 700 or higher credit score, though if they do not, Splash Financial does allow applicants to add a cosigner to the loan. In keeping with the lender’s good credit score requirements, only cosigners with a credit score of 700 or higher will be considered.
According to Splash Financial’s website, borrowers who qualify for top rates can unlock over $29,000 worth of savings after refinancing their student loans.
Finally, Splash Financial does not have a specific policy on forbearance and instead considers each hardship request on a “case by case” basis. Borrowers who feel more comfortable with a specific policy in place might not find Splash Financial to meet that desire.
8. CommonBond
- Refinance and consolidate up to $500,000 in private and federal student loans
- 5, 7, 10, 15, and 20 year repayment terms
- Rates as low as 2.54% APR for variable rates
- Rates as low as 3.14% APR for fixed rates
- Rates as low as 3.80% APR for hybrid rates
- Member protections including unemployment protection
- Zero application, origination, or prepayment fees
Check Rate
Clicking the button above will take you to CommonBond’s secure website where you can check your rate before you apply without hurting your credit score
Fixed APR
3.14% - 6.49%
Variable APR
2.54% - 6.39%
Loan Terms
5, 7, 10, 15 or 20
Applicable Fees
No origination or prepayment fees
Credit Needed
Good/Excellent
Offered terms are subject to change. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
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Additional Details About CommonBond
About CommonBond
In 2012, a few students from the University of Pennsylvania found themselves with overwhelming student debt and sought to help borrowers refinance student loans by starting CommonBond.
CommonBond has raised over $100 million in funding with the goal of making student debt more affordable through student loan refinancing and consolidation. The company now serves over 700 programs across the U.S..
The Basics
- Fixed APR: 3.14% - 6.49% APR
- Variable APR: 2.54% - 6.39% APR
- Hybrid APR: 4.13% - 6.26% APR
- 5, 7, 10, 15 or 20 Years
- Loan Amounts: $5,000 - $500k
- Eligible Degrees: Undergraduate and Graduate
- Eligible Loan Types: Federal and Private
- Fees: No Fees
- 0.25% interest rate reduction for setting up Auto-Pay
- Temporary postpone payments if facing financial hardship
- Only lender to offer hybrid interest rate
- Cosigner release after 36 months of on-time payments
Bottom Line
CommonBond looks for applicants with very strong income. To be approved, you must have good credit, a well-paying job, and be able to afford your monthly payments.
The application process is easy, and after creating an account and entering some basic information, you will be able to see if you qualify to refinance.
CommonBond also offers high-quality customer service. The company prides itself on helping it borrowers navigate the student loan refinance market and beyond. The company even has a program to help borrowers who lose their jobs find a new one.
Their student loan refinance and consolidation program is a great option to consider for people who want to:
- Lower their monthly payments
- Lock in low interest rates
- Choose from a variety of term lengths
- Consolidate student loans together (both federal & private)
More Information About Student Loan Refinancing
We know the student loan refinancing process can seem complicated. That's why we put together the following information to help borrowers better understand the process.
How to Decide if You Should Refinance Student Loans
When you first hear about student loan refinancing, it may seem like a no-brainer.
While there are certainly benefits to refinancing, there are some things to consider. In this section, we'll go over the benefits and downsides of student loan refinancing.
Student Loan Refinance Benefits
Lower Interest Rate
When you apply for refinancing, you'll be able to see if you qualify for an interest rate that is lower than what you currently have. If you do, then you may be able to save money depending on the repayment term you select. When you have a lower interest rate, less money will be charged on your principal balance each month.
New Repayment Term and Monthly Payment
As mentioned above, when you refinance student loans, you will have the option to choose a new repayment term. Lenders typically offer term lengths anywhere from 5 to 20 years. This means you have the following options:
- Shorten your current repayment term - Increasing your monthly payment but saving more money
- Extend your repayment term - Lowering your monthly payment but possibly increasing the total cost of your loan due to additional accrued interest
- Keep your repayment term the same - Keeping your monthly payment the same but likely saving you money if you receive a lower interest rate
New Servicer
If you don’t like your current servicer, you will most likely receive a new one after you refinance. When you think about which lender you want to refinance your student loans with, you should consider which servicer your new lender works with to make sure they have received positive customer reviews.
Release a Cosigner From Your Student Loans
If you have a private student loan with a cosigner, you may be able to remove them after your student loan refinance. This will release them from their shared responsibility on the loan.
Student Loan Refinance Downsides
The main downside of refinancing is that your federal student loan will turn into a private student loan. This means that you will lose access to federal benefits, protections, and repayment plans, including income-driven repayment plans, student loan forgiveness, and discharge benefits.
Eligibility Requirements to Refinance Student Loans
There are many things lenders consider when deciding if you are a good candidate for refinancing. The following are requirements that the best refinance and student loan consolidation companies typically consider. Certain lenders may have other requirements as well.
Eligible Loans
Typically, lenders will refinance both federal and private student loans from undergraduate, graduate, and professional schools. Some lenders may have specific criteria for which schools and degrees are eligible. A common requirement we have seen is that the borrower must have graduated from a Title IV school.
Credit History
To refinance student loans, you have to have a good to excellent credit score. This is because your credit score shows how much of a risk you are to the lender. Typically, you will need at least a 660 credit score, though we have seen applicants get approved with lower scores and rejected with higher scores.
Repayment History
Though this goes hand-in-hand with credit score, you will also need to have a solid repayment history on your current student loans. Student loan refinance lenders don’t like to see a track record of missed payments as this means you are more likely to miss payments on the loan they are giving you.
Annual Income
Some lenders may look at your annual income to gauge if you will be able to afford the monthly payments on your new loan. If you have too low or inconsistent income, you may be rejected.
U.S. Citizenship
Most student loan refinance lenders require that you are a U.S. citizen or permanent resident to be approved for refinancing.
State Requirements
Some banks and lenders may only accept applicants from certain states. Make sure that the refinance lender you are considering accepts applicants from your state before going through with the full application.
Cosigners and Student Loan Refinancing
Benefits of Using a Creditworthy Cosigner:
- More likely to be approved
- Receive a lower interest rate
- Have someone to motivate you to stay on top of payments
- Cosigner may be discharged after certain number of on-time payments
Risks of Using a Cosigner:
- Credit of primary borrower and cosigner will both be affected if payments are missed
- Cosigner's retirement could be delayed
- Cosigner will be required to make payments if primary borrower does not
Who Can Cosign?
A cosigner is a person who assumes equal responsibility on a refinanced student loan. Borrowers should choose a parent, guardian, or other close family member who is willing to accept joint responsibility. Keep in mind that in order for a cosigner to help you get approved, they must have a good credit score.
Why Use a Cosigner?
The rationale behind cosigners is that in most situations, the primary borrower is young and may not have much credit history. Student loan refinance lenders cannot evaluate their credit risk and are therefore reluctant to refinance large sums of money without a guarantee that the borrower will be responsible in repaying their new loan.
A cosigner with a long credit history and a high credit score can help a borrower get approval for student loan refinancing and consolidation. This is because the lender knows that if the primary borrower is unwilling or unable to pay back the student loan, the cosigner will be required to assume the payments.
What Are the Risks of Cosigning?
There are drawbacks to being a cosigner on a student loan refinance. If something happens to the primary borrower — including death, disability, unemployment, or simple financial irresponsibility — then the cosigner will be required to pay back the loan.
Both late and missed payments can negatively impact a cosigner’s credit score.
Can Cosigners Ever Be Released From the Loans?
Cosigners can be released from student loans after certain conditions are met. Once a student has graduated from college or graduate school and has started making regular, on-time payments, the cosigner may be able to obtain a release when refinancing.
Student Loan Refinancing and Consolidation Application Process
If you have decided to refinance or consolidate your student loans, the next step is to prepare yourself for the application process. Here are the general steps to the student loan refinancing application process:
- Do your research to see if student loan refinancing and consolidation is for you
- Compare companies and rates using LendEDU's comparison tool (optional)
- Choose a lender you want to apply with
- Fill out basic background and education information
- Upload the required documents
- See if you are pre-qualified
- Wait for full approval/denial from the lender
To start the process, you should gather information about your student debt. If you do not have a copy of your student loan documents, you can get them in one of two ways.
- For federal student loans: you can view them directly online at the Federal Student Aid portal or the National Student Loan Data System. You will need to login using the PIN that you used to apply for student aid.
- For private student loans: Check your credit report. You are entitled to a free annual copy of your credit report, which can be obtained from one of the major credit reporting agencies, Equifax, Experian, or TransUnion. Once you have determined which loan companies hold your loans, you can then get a copy of your loan documents directly from those companies.
If you decide to apply for a student loan refinance through a bank or other lender, the company will review your application, and if you are approved, will determine your interest rate based on the factors discussed above. Your chosen company will then pay off all of your old student loans, and you will receive statements from your new servicer each month. If you choose to consolidate your student loans, instead of receiving multiple statements each month, you will only have one statement and one bill to pay each month.
How Student Loan Refinance Interest Rates Work
Student loan refinancing can be a way to lower your interest rate or to change your interest rate from a variable rate to a fixed rate. In order to understand whether or not refinancing is a good option, you first need to understand the basics of how student loan refinance rates work.
Interest rates are the amount that a lender charges a borrower for the use of money, usually expressed as a percentage of the total amount borrowed. Refinance interest rates usually vary by loan type, rate type, and creditworthiness.
For example, if you borrowed $10,000, and the interest rate was 10%, then you would pay $1,000 to the lender for the use of that money.
Typically, interest rates are charged on a yearly basis, which is known as an annual percentage rate, or APR. Over the life of a loan, interest rates can represent a substantial amount of money. In the $10,000 example above, in a 5-year term, the total interest paid would be $2,748.23 — or nearly one-third of the total amount of money borrowed.
Current Student Loan Refinance Rates
Fixed Rates
3.09% - 8.34%
Variable Rates
3.09% - 8.34%
Fixed vs. Variable Interest Rates
Student loan refinance rates can be either variable or fixed.
A fixed rate means that the interest rate is set when you sign the documents and will remain the same throughout the life of the loan.
Variable interest rates will change based on the prime rate or the London Interbank Offered Rate (LIBOR). Variable interest rates often start out lower than fixed interest rates, but can be risky because they can rise over time. If you are considering obtaining a variable rate loan, review the terms, including whether there is a cap on the interest rate.
How to Qualify for Lower Interest Rates
If you would like to qualify for a lower interest rate when you refinance your student loans, there are a number of ways to do so.
First, consider a shorter loan repayment term. The less time you take to repay your student debt, the lower your interest rate will typically be.
Second, spend some time building your credit score. The higher your credit rating, the lower your interest rate will be — and the more money you will ultimately save. Building your credit can take time, but it can be as simple as making regular, on-time payments with your bills and never charging more than you can afford to pay back.
Third, consider using a cosigner to help improve your application, which in result typically allows the refinance lender to offer you lower interest rates.
Student Loan Refinancing & Consolidation FAQ
Yes. You can refinance and consolidate federal student loans. You can only refinance federal loans through a private lender. However, you can consolidate federal student loans directly through the Department of Education or by refinancing with a private lender. Be aware that you would be changing your federal student loan into a private loan when using a private lender and would lose the protections and benefits your federal student loans offer.
To learn more about federal student loan consolidation, check out our Direct Consolidation Loan guide.
When you refinance student loans, the new lender pays off your old student loans and issues a new loan with new terms. You are then responsible for paying back the loan to the new lender.
Refinancing typically saves borrowers money through obtaining a lower interest rate. A lower interest rate will result in the borrower paying less money in interest over the life of the new refinanced loan.
It is free to refinance student loans. You can apply to refinance your loans directly through the lender, after comparing rates and other information via LendEDU. None of the lenders on this page will charge you an application or origination fee.
Yes. When you refinance your student loans, you are consolidating them simultaneously. You can choose which loans you would like to refinance, and therefore, consolidate together.
Yes. With a private lender, you can consolidate private and federal student loans into a single loan. However, when you consolidate private and federal student loans, you lose the federal protections.
Yes. You can refinance student loans multiple times. Before doing so, carefully consider whether it makes financial sense to refinance the loan another time. You should only do this if you can receive a lower interest rate or want to consolidate another loan with your already refinanced loan.
Deciding to consolidate student loans depends on a number of factors. When consolidating federal student loans with the government, you will not save money, but it may make it easier for you to pay off your student loans because you will have just one payment to make each month. As mentioned, student loan consolidation can also refer to refinancing, which can make sense if you can obtain a more favorable interest rate on your federal and/or private student loans.
The option of deferring or postponing payments depends on the individual refinance lender. Citizens Bank, SoFi, and CommonBond all offer forbearance in the case of hardship. Other lenders, such as College Ave Student Loans, offer forbearance on a case-by-case basis. Be sure to ask your student loan refinance lender about its policies for hardship forbearance.
If your student loan refinance application was rejected, it was likely due to poor or insufficient credit. Take time to build your credit score, pay off debt, and focus on making regular, on-time payments for you bills. Alternatively, you can ask a family member or trusted friend to cosign your student loan refinance application in order to increase your approval odds.
Most student loan refinance lenders will not permit you to refinance your student loans if you did not graduate. However, some lenders may. Compare the best student loan refinance companies above to find a lender that may permit you to refinance student loans.
Generally, lenders will not approve your refinance if your school was not accredited. However, some lenders will. Check the best student loan refinance companies above to see if a bank or lender may approve you for a student loan refinance.
Yes. A child whose parent took out a Parent PLUS loan can apply to a participating student loan refinance lender under their own name. Student loan refinancing companies like SoFi, Laurel Road, and CommonBond offer this option, but will want to make sure the child graduated with at least a bachelor’s degree and is currently employed, amongst other standard criteria.