Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Student Loans Student Loan Repayment How to Refinance Student Loans With Bad Credit Updated Apr 10, 2025 9-min read Expert Approved Expert Approved This article has been reviewed by a Certified Financial Planner™ for accuracy. Written by Catherine Collins Written by Catherine Collins Expertise: Budgeting, Mortgages, Credit, Debt, Personal loans, Small business, Entrepreneurship Learn more about Catherine Collins Reviewed by Catherine Valega, CFP® Reviewed by Catherine Valega, CFP® Expertise: Financial planning, retirement planning, education planning, insurance planning, investment planning Catherine Valega, CFP®, CAIA®, founded Green Bee Advisory LLC to help women, impact givers and investors, and small businesses build, manage, and preserve their financial resources. She's been practicing financial planning for more than 20 years. Learn more about Catherine Valega, CFP® Struggling to make your student loan payments? You’re not alone—63% of borrowers have had trouble at least once, according to CFPB 2023 – 2024 research. You usually need decent credit to refinance, but if your score isn’t great, you still have options. Some lenders specialize in working with borrowers with low credit scores, or you can apply with a cosigner to boost your chances of approval and securing a lower rate. A Direct Consolidation Loan might be a better fit if you have federal loans. This guide walks you through how to refinance student loans with bad credit and how to find the best option for you. Table of Contents What’s the minimum credit score to refinance student loans? 3 options for refinancing student loans with bad credit Option 1: Get a Direct Consolidation Loan Option 2: Refinance with a cosigner Option 3: Apply with a lender with lower credit score requirements Best lenders for refinancing student loans with bad credit Does refinancing student loans hurt your credit? Is refinancing with bad credit worth it? What’s the minimum credit score to refinance student loans? Typically, private lenders require a minimum credit score of 670 to refinance your student loans. If you want to refinance without a cosigner, you’ll need a stable work history and a debt-to-income ratio (DTI) below 50%. Some borrowers can’t meet these requirements, but it’s still possible to refinance your student loans. Here are three options to consider based on your situation. Read More How to Improve Your Credit Score 3 options for refinancing student loans with bad credit Below, we’ve listed the three main options to refinance student loans with a low credit score. Which one is right for you will likely depend on whether you have a cosigner and whether your loans are federal or private. OptionBest forConsolidate rather than refinanceMore manageable federal student loan paymentsRefinance with a cosignerThose with a creditworthy cosignerApply with a lender with lower credit score requirementsRefinancing with no cosigner Option 1: Get a Direct Consolidation Loan ⭐ Best for: More manageable federal student loan payments How it works: If you have federal student loans and are considering refinancing but don’t have great credit, our first recommendation is to consolidate them instead. Federal student loan consolidation is different from refinancing. With a Direct Consolidation Loan, you combine your federal student loans into one bigger student loan, and you don’t need a good credit score to do it. This can help you organize your student loans by only having one monthly payment. If you’re working toward student loan forgiveness, don’t apply for a Direct Consolidation Loan because it will restart your qualifying forgiveness payments. Instead, stay the course and continue paying the federal student loans you have to qualify for forgiveness. If you’re having trouble making payments, contact your servicer to ask about temporary forbearance. Pros No credit check required Keeps federal loan benefits, such as income-driven repayment and forgiveness options Simplifies repayment with one monthly bill Cons Doesn’t lower your interest rate Resets the forgiveness timeline if already enrolled in a forgiveness program Option 2: Refinance with a cosigner ⭐ Best for: Those with a creditworthy cosigner How it works: If you have a cosigner willing to apply for student loan refinancing with you, you have several more options for lenders. Applying with a cosigner, even if you have bad credit or no credit history, can help you qualify for lower interest rates on your refinance loan. Eventually, it’s helpful to relieve your cosigner of their obligations, so take the time to research lenders that allow you to release your cosigner after a period. For instance, Citizens Bank offers refinance loans, and you can request cosigner release after 36 months of consecutive, on-time payments. Until then, be sure to make all your payments on time; nonpayment hurts you and harms your cosigner’s credit. Pros Potential to qualify for much lower interest rates Can help build your credit with on-time payments May qualify for more flexible repayment terms Cons Cosigner is financially responsible if you miss payments Not all lenders offer cosigner release Requires finding someone willing and eligible to cosign Sometimes, family members are willing to help by cosigning. But don’t forget—if they cosign, you should be 100% sure you can make your new payments on time. Otherwise, you’ll risk messing with that relationship. And beyond that, work hard to have your cosigner removed as soon as possible. That may mean taking a side hustle to make every monthly payment. Do what it takes to make your payments on time, remove them as a cosigner, and don’t forget to thank them profusely! Catherine Valega , CFP®, CAIA Option 3: Apply with a lender with lower credit score requirements ⭐ Best for: Refinancing with no cosigner How it works: If you have bad credit, one option is to apply with a lender with a lower credit score requirement. For example, some lenders, like Earnest, accept borrowers with slightly lower credit scores (665 and above). Other lenders, like MPOWER, have no credit score requirement at all. Using a comparison tool—Credible is our favorite—which features select lenders that accept borrowers with credit scores as low as 580 and allows you to compare credit score requirements from several lenders before applying. Pros No need for a cosigner Some lenders cater specifically to borrowers with limited or poor credit May still qualify for refinancing and reduce your monthly payment Cons Interest rates may be higher than average Fewer lenders to choose from May not qualify if income or employment history is weak If you’re experiencing difficulty making loan payments, the first step I recommend is to reach out directly to the loan servicer. Often it has options for you that may help you proceed through the loan payment hardship period. If you refinance, I would make sure you understand all your new terms and options. For example, don’t do something that may restart your payments that qualify for loan forgiveness. Do you understand the new terms and the impact on your current cash flow and long-term total interest expense? Catherine Valega , CFP®, CAIA Best lenders for refinancing student loans with bad credit These are our top recommendations for refinancing student loans with bad credit. Company Min. credit score Best for Rating (0-5) 5.0 View Rates 580 Comparison Shopping 5.0 View Rates 4.6 View Rates 665 Extra Benefits 4.6 View Rates 3.8 View Rates None Bad Credit and No Cosigner 3.8 View Rates Whether you’re looking for a lender with lenient approval standards or a marketplace that helps you compare multiple offers, these options give you a better shot at qualifying—even with a lower credit score. Credible Best for Comparison Shopping 5.0 /5 View Rates Why we picked it Credible makes it easy to shop around for student loan refinancing—especially if you have bad credit. Its marketplace lets you compare prequalified rates from multiple lenders with a single form without affecting your credit score. This is especially helpful if you’re unsure whether you qualify or want to avoid applying blindly to multiple lenders. Credible includes lenders with minimum credit scores as low as 580, giving borrowers with poor or limited credit more options than they might find on their own. The platform is free to use and provides transparent rate and term comparisons, making it one of the most accessible tools for refinancing with bad credit. No impact on credit score to compare offers Access to lenders with flexible credit requirements Quick prequalification process Free to use Not a direct lender Limited control over individual lender terms Rates (APR)3.85% – 12.66%Refinance amountsVary by lenderMin. credit score580Repayment termsVary by lender Earnest Best for Extra Benefits 4.6 /5 View Rates Why we picked it Earnest is a strong option for refinancing if you have fair credit (665+) and are looking for flexible repayment features. While its credit score requirement is higher than some competitors, Earnest offers unique perks like skipping a payment once a year, biweekly payments, and precision loan customization based on your budget. It’s also one of the few lenders that doesn’t charge any fees—no origination, application, or prepayment penalties. That, combined with solid customer service and transparent rates, makes Earnest a smart choice for borrowers who are rebuilding their credit and want borrower-friendly terms. Flexible payment options and customizable terms No fees Skip one payment per year Soft credit check for rate estimates Higher minimum credit score than some alternatives No cosigner option Rates (APR)4.29% to 9.99%Refinance amounts$5,000 – $500,000Min. credit score665Repayment terms5 – 20 years MPOWER Best for Bad Credit and No Cosigner 3.8 /5 View Rates Why we picked it MPOWER is one of the only refinancing lenders that doesn’t require a credit score, making it a lifeline for international students and borrowers with little to no credit history. Instead of focusing on your FICO score, MPOWER considers your education, career potential, and other factors to evaluate your eligibility. While MPOWER’s rates may be higher than traditional lenders, it stands out for accessibility. It’s also one of the few lenders that doesn’t require a cosigner and offers resources like career support and visa guidance, making it especially appealing for non-U.S. citizens. No credit score or cosigner required Ideal for international and DACA students Fixed interest rates Offers visa support and career guidance Higher interest rates than typical lenders Only available for certain schools and degrees Rates (APR)Around 13.98%Refinance amounts$2,001 – $100,000Min. credit scoreNoneRepayment terms10 years Read More Best Student Loan Refinance Companies and Best Lenders to Refinance International Student Loans Does refinancing student loans hurt your credit? Many lenders conduct a soft pull during the prequalification process, which checks to see whether you generally qualify for the loan and won’t hurt your credit score. However, once you choose a lender and formally apply for a refinance, your lender will conduct a hard pull, which can ding your credit. But it’s temporary because once you make your student loan refinance payments on time, your score can improve. Is refinancing with bad credit worth it? Refinancing with bad credit can be worth it, but only in the right circumstances. Refinancing generally works best when it helps you lower your interest rate, reduce your monthly payment, or both. Those benefits can be harder to secure with bad credit, but not impossible. For example, if you have a cosigner with good credit, refinancing could reduce your rate from 11% to 7%. On a $30,000 loan with a 10-year term, that interest rate drop could save you around $7,400 in total interest and reduce your monthly payment by about $60. Those savings can make a big difference, even if your credit isn’t great. On the other hand, refinancing with bad credit and no cosigner might lead to a higher interest rate or a longer loan term that stretches out repayment and increases total interest. In those cases, refinancing might only be worth it if you need a lower monthly payment to avoid default or get out of financial distress. When it might be worth it: You have a creditworthy cosigner You’re refinancing high-interest private loans You qualify for a better rate than what you currently have You’re struggling to make payments and need a lower monthly amount When it might not be worth it: You have federal loans and would lose access to income-driven repayment or forgiveness programs Your new loan would have a higher rate or unfavorable terms You’re close to paying off your current loan In short: Refinancing with bad credit can be worth it, but make sure it solves a real problem—whether that’s saving on interest or gaining some breathing room in your budget. Always compare offers first and run the numbers before you commit.