Student Loan Refinance Calculator

You might consider refinancing student loans if you’d like to lower your interest rate or monthly payment, change repayment terms, or switch lenders. You may also refinance to switch from a variable- to a fixed-rate loan or put cosigned loans into your name only. 

Estimating your potential interest savings or monthly payments using a student loan refinance calculator can give you a better idea of what to expect. LendEDU’s student loan refinance calculator makes it easy to run the numbers using basic information about your loans. Here’s how it works. 

The LendEDU student loan refinance calculator

The LendEDU student loan refinance calculator above is a simple yet powerful tool that requires specific input from you to help estimate your potential savings from refinancing. 

To use it, plug in the following fields:

• Current loan balance. Your current loan balance is the unpaid balance due or how much you still owe to your loans.
• Current interest rate (APR). This is the rate you’re paying on your loans now and it measures your cost of borrowing on an annual basis.
• Remaining loan term (in years). The remaining loan term is the number of years’ worth of payments remaining, according to your loan agreement.
• New loan interest rate (APR). The new loan APR is the rate you’ll pay on your loan if you refinance.
• New loan term (in years). This is the length of time you’ll need to pay off the new loan, measured in years. 

Read a full breakdown of each field by clicking the links in the list.

How to use the calculator

The student loan refinance calculator is easy to use. You’ll need to do a little information-gathering beforehand to make sure you have all the relevant details for your loans. Here’s a closer look at what you’ll need and where to find it. 

Current loan balance

This is the remaining amount you owe on your student loans. You can find this information on your most recent loan statement or by logging into your loan account online. 

Add your balances together if you have more than one student loan and want to refinance them into one. This number represents the starting point for your refinancing calculations.

Current interest rate

This is the annual percentage rate (APR) of your loans. It influences how much interest you pay over the lifetime of your loan. You can find your current interest rate on your loan agreement or online loan account.

If you have multiple student loans with different APRs you’re considering refinancing together, calculate a weighted average interest rate. This gives more importance to the rates on higher balances. 

Online tools can help with this, or you can do it manually by following these steps:

• Multiply each loan’s interest rate by its balance.
• Add these together.
• Divide by the total loan balance. 

This average rate provides a more accurate input for the refinance calculator.

For example, imagine you have three student loans:

Here’s how you would calculate the weighted average interest rate:

1. Multiply each loan balance by its rate:
   • Loan 1: $10,000 x 5% = $500 
   • Loan 2: $15,000 x 7% = $1,050 
   • Loan 3: $5,000 x 6.5% = $325
2. Add these numbers together: $500 + $1,050 + $325 = $1,875
3. Add together the total loan balances: $10,000 + $15,000 + $5,000 = $30,000
4. Divide the total of the first calculation by the total loan balance, and then multiply by 100 to get the percentage: ($1,875 / $30,000) x 100 = 6.25%

So if you’re considering refinancing these loans together, you’d use 6.25% as the current interest rate in the student loan refinance calculator.

Remaining loan term (in years)

This is the time you have left to repay the loans you’re considering refinancing, rounded to the nearest full year. Your remaining term can affect the interest you’ll pay over time.

If you have multiple loans with different remaining terms, determining what value to input can be more complex. You can handle this in a couple of ways:

• Use the longest remaining term among your loans. 
• Compute the weighted average of the remaining terms of your loans.

To calculate a weighted average, multiply each loan’s balance by its remaining term, add these figures, and divide by the total loan balance. 

For instance, let’s consider three loans:

1. Calculate for each loan: Loan balance x Remaining term:
   • Loan 1: $10,000 x 10 years = 100,000 
   • Loan 2: $15,000 x 7 years = 105,000 
   • Loan 3: $5,000 x 5 years = 25,000
2. Add these figures: 100,000 + 105,000 + 25,000 = 230,000
3. Divide that number (230,000) by the remaining loan balance ($30,000): 230,000 / $30,000 = 7.67 years

In this case, the weighted average remaining term is about eight years (rounded up). You would use this figure for the “remaining loan term” in the student loan refinance calculator.

Remember, this is an estimate. Always review your loan terms and consult with a financial professional to understand how refinancing could affect your specific situation.

New interest rate (APR)

This is the estimated interest rate for your new, refinanced loan. Refinancing often aims to secure a lower interest rate, reducing your total loan cost.

Finding an appropriate figure to input here might require research. Start by checking the advertised interest rates from several refinancing lenders. 

Consider starting with one of the following: 

• Our picks of the best lenders to refinance student loans 
• Our resource on current student loan interest rates

Most lenders display a range of potential interest rates on their website. You can also use prequalification tools, which many lenders offer. These tools provide personalized rate estimates using basic information about you and your loans, often without affecting your credit score.

Tip

The lowest advertised rates often go to those with excellent credit scores, a low debt-to-income ratio, and stable employment. So if your credit score falls in the “fair” range, consider using an interest rate in the middle of the lender’s advertised range. 

Remember: The rate you input is an estimate. Your rate can vary based on your circumstances and the lender’s criteria. As always, it’s best to consult with a financial professional to understand the potential outcomes of refinancing your student loans.

New loan term (in years)

This is the proposed length of your new refinanced loan. Extending your term can lower your monthly payments but may increase the interest you’ll pay. A shorter term may increase your monthly payments but could save you money in the long run.

By inputting these figures into the student loan refinance calculator, you can see a side-by-side comparison of your current loan and the estimated terms of your new loan. Remember, these estimates are just that: estimates. Actual terms will depend on your lender and financial situation.

Interpret your results

Once you’ve entered your data, the student loan refinance calculator will provide a comparison of your current loan versus the new loan, and the potential savings, broken out by several important figures:

• Monthly payment: This shows your current loan payments, estimated payments on the new loan, and potential monthly savings. Lower monthly payments can make your loan more manageable, but it’s wise to consider the long-term implications. For example, is the convenience of lower monthly payments worth it to you if it means you’ll spend more in the long run to repay your loan?
• Term length: This reflects how long you’ll spend repaying your loan. A shorter term can save you money in the long run, and a longer term can lower your monthly payments but might result in higher total interest paid.
• Total interest: This tells you how much you’ll pay in interest over the life of your loan. A lower interest rate or a shorter term can reduce this amount, leading to overall savings.
• Total cost: This is the total amount you’ll have paid by the end of your loan term, including principal and interest.

The results will also include a summary paragraph showing the potential savings and how much sooner you could pay off your loans by refinancing. A bar graph will also illustrate the breakdown of current and new payments into principal and interest to show how much you could save.

Remember, small changes to your interest rate or loan term can have significant effects on your monthly payments and total cost. 

For example, a small reduction in interest rate can save you a substantial amount over the life of your loan, and extending your loan term can reduce your monthly payments but might lead to more interest paid over time. It’s all about finding the balance that works best for you and fits your budget.

Should you refinance your student loans?

Once you’ve done the math with a student loan refinance calculator, the next step is evaluating the results. This is where you’ll look at the new expected loan rate, term, and total interest paid to decide whether refinancing is worth it. 

Student loan refinancing could make sense if: 

• Interest rates have dropped since you took out your loans, or your credit score has improved, allowing you to qualify for a better rate. 
• You’d like to switch from a variable- to a fixed-rate loan so your monthly payments are predictable.
• Switching to a longer loan term would make your monthly payments more affordable. 
• You have stable income and would like a shorter loan term to repay your loans faster. 

In terms of interest savings, no set rule or threshold that decides when refinancing is right. But where you are in your loan repayment term can make a difference in how much you save. 

If you only have a couple of years left to pay on your loans, odds are you’ve already paid most of the interest charges to the lender at this point. Refinancing now could save you a little on interest, but not as much as if you’d pursued a new loan earlier in your repayment term. 

Refinancing student loans might not be worth it if:

• You’ve paid off most of your loan balances already. 
• Exchanging your current loan term for a longer one would require you to pay far more in interest over the life of the loan. 
• The new loan APR isn’t much lower than your current one, or you’re not interested in changing the rate type. 

Refinancing student loans often doesn’t make sense in one more scenario: If you primarily owe federal student loans, refinancing them with a private lender would cause you to lose valuable benefits, including access to income-driven repayment plans and loan forgiveness programs. 

You can’t get these benefits with private student loans, so consider what kind of trade-off you might be making. Find out more in our article on whether refinancing federal loans with a private lender makes sense.

Refinancing can be beneficial, but weighing the pros and cons before deciding is crucial. Plugging the numbers into our calculator can be a critical first step.

Our expert’s advice

Erin Kinkade

CFP®

I might recommend my clients refinance their student loans if they want to become debt-free at a specific time or age, they can get a more favorable interest rate, they wish to consolidate for simplicity, they want to remove a cosigner from the loan, and overall interest rates have dropped. I don’t recommend refinancing if you have a low credit score, refinancing won’t result in better terms, or in a high-interest-rate environment.

Factors that affect your refinancing terms

If you’re interested in student loan refinancing, it helps to know what lenders are looking for when deciding whether to approve borrowers. The minimum qualifications for a refinance loan can vary by lender, and any or all of the following can influence your ability to get approved:

• Credit history and credit scores
• Debt-to-income ratio
• Enrollment status and graduation date
• Income and employment status
• Financial assets
• Degree field or career path

Of these factors, credit scores often top the list because most lenders view them as a measure of how responsibly you manage debt. Lenders want to see a solid track record of using different types of credit and consistently repaying what you borrow. 

The minimum credit score for student loan refinancing depends on the lender. For example, several lenders we’ve researched as the best for private student loan refinancing expect a minimum score of 680, but some lenders have no minimum credit score requirement. 

Aside from credit scores, lenders may be interested in your career prospects or field of study. If you have a lower credit score but earn a steady income with plenty of room for advancement and higher earnings later, lenders may view that positively when approving you for a refinance loan. Here are a few tips to improve your approval odds:

• Review your credit reports, focusing on what’s helping your score and what may be hurting it. 
• Dispute any errors or inaccuracies you find on your credit reports, which can add points back to your score. 
• Work on paying down debt, which can improve your debt-to-income ratio. 
• Consider ways you might be able to increase your income with side gigs or part-time work, if possible. 
• Open a savings account if you don’t have one yet, and commit to setting aside money from each paycheck. 

If you’re still worried about getting approved for student loan refinancing, you might consider asking a creditworthy friend or family member to cosign. A cosigner with a strong credit history could make it easier to get approved and secure a lower rate. Just remember: The cosigner shares liability for the debt. 

Shopping around and comparing offers from different lenders can help you secure the best terms for your situation. You can look for student loan refinance companies that offer free rate quotes without affecting your credit scores. 

Next steps after using the refinance calculator

After you’ve used the Student Loan Refinance Calculator and better understand your potential refinancing terms, the next phase begins: shopping around and evaluating loan offers. Take these steps to identify the right lender for you:

1. Review multiple offers: Don’t stop at the first offer. Every lender has unique evaluation criteria and interest rates, and you might find a better deal elsewhere. Explore multiple lenders, including banks, credit unions, and online lenders.
2. Evaluate loan offers: When comparing offers, don’t just look at the interest rate. Consider the loan term, monthly payment, and any associated fees. Also, pay attention to whether the interest rate is fixed or variable. This could affect your payments because variable rates mean your payment amount will likely change.
3. Consider the fine print: Before you sign any loan agreement, ensure you understand all the terms. Look for details about prepayment penalties, late fees, and loan deferment or forbearance options. It’s important to understand what you’re getting into before making this long-term commitment.

Remember, the goal of refinancing isn’t just to secure a lower interest rate; it’s to better manage your financial situation. Take your time, do your research, and ensure the terms of your new loan align with your financial goals.

View our other student loan calculators.

Our expert recommends

Erin Kinkade

CFP®

Regardless of your refinancing options, keep in touch with your lenders if you’re struggling to make a payment. Many lenders will work with you and note the account to allow time for you to make a repayment plan. But ignoring the problem by not making payments and not communicating with your lender will lead to negative consequences, such as lowering your credit score, and can harm your credit report.

Student loan refinancing calculator FAQ 

What does it mean to refinance a student loan?

To refinance a student loan means replacing your student loan with a new one, ideally with better terms. This could mean a lower interest rate, a different loan term, or both. 

People often refinance to lower their monthly payments, pay less interest over the life of the loan, or pay off the loan faster. For more in-depth information, check out our resources, including:

• Can you refinance student loans?
• How to decide whether to refinance student loans
• How to refinance student loans

How accurate is the student loan refinance calculator?

Our student loan refinance calculator provides a solid estimate of your potential savings and new loan terms. However, actual loan terms can vary based on lender criteria and your individual financial circumstances. 

It’s best to use the calculator as a starting point to understand the potential outcomes of refinancing.

Will I be approved for a refinance loan?

Approval for refinancing depends on several factors, including your credit score, income, job stability, and debt-to-income ratio. Different lenders have unique criteria, so you might qualify with one lender but not another. It’s wise to check lender requirements before applying.

Can I refinance both federal and private student loans?

Yes, you can refinance federal and private student loans. However, refinancing federal loans means you’ll forfeit certain benefits, such as income-driven repayment plans and loan forgiveness options. 

If you don’t want to lose these federal benefits but want to simplify your federal loan payments, consider a Direct Consolidation Loan.

Does refinancing my student loans affect my credit score?

Refinancing can lower your credit score due to the lender’s hard credit check. However, multiple checks within a short period (14 to 45 days) are often treated as a single inquiry for scoring purposes. Regular on-time payments on your refinanced loan can help restore and even boost your credit score.

What should I consider before deciding to refinance my student loans?

Before deciding to refinance, consider factors beyond the interest rate and monthly payments. Think about potential loss of federal loan benefits, any fees associated with the new loan, and how refinancing fits into your long-term financial goals. 

It’s important to make the right decision for your circumstances.