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Student Loans Student Loan Repayment

Student Loan Refinance Calculator

Updated Aug 16, 2023   |   12-min read
Current Student Loan Information
Current Loan Balance
Current Interest Rate
Remaining Loan Term
New Student Loan Information
New Interest Rate (APR)
New Loan Term

Calculator Results

Current New Savings
Interest Rate
Monthly Payment per month
Term Length years years years
Total Interest
Total Cost

By refinancing your student loans, you could lower your monthly payments by . You could save overall on your student loans and pay them off years ahead of schedule.

Understand student loan refinancing

Refinancing a student loan involves taking out a new loan to pay off your current student loans. When you refinance, a lender pays off your old loans and issues you a new one, ideally at a lower interest rate. 

This process allows you to consolidate multiple loans into a single one, simplifying your payments. The primary aim is to reduce your interest rate, which could save you significant money over the life of your loan.

There are several valid reasons to refinance. You may want to:

  • Lower your monthly payments
  • Adjust your loan term—for example, lengthen or shorten your repayment time frame
  • Switch from a variable interest rate to a fixed rate
  • Lower your rate, particularly if your credit score has improved since you took out your original loans

However, refinancing isn’t for everyone. You might risk losing benefits associated with your original loans, especially if they’re federal. These benefits could include income-driven repayment plans or loan forgiveness programs. 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.

How the student loan refinance calculator works

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. Here’s a breakdown of each field:

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 loan. 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:

Loan 1$10,0005%
Loan 2$15,0007%
Loan 3$5,0006.5%

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

  1. Multiply each loan balance by its interest rate:
  • Loan 1: $10,000 x 5% = $500 
  • Loan 2: $15,000 x 7% = $1,050 
  • Loan 3: $5,000 x 6.5% = $325
  1. Add these numbers together: $500 + $1,050 + $325 = $1,875
  2. Add together the total loan balances: $10,000 + $15,000 + $5,000 = $30,000
  3. 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:

  1. Use the longest remaining term among your loans. 
  2. 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:

LoanBalanceRemaining term (years)
Loan 1$10,00010
Loan 2$15,0007
Loan 3$5,0005
  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
  1. Add these figures: 100,000 + 105,000 + 25,000 = 230,000
  2. 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: 

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.

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

Remember that 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 overall 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 be making payments on your loan. A shorter term can save you money in the long run, while 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.

The impact of your credit score

When it comes to refinancing student loans, your credit score plays a pivotal role. Most lenders view your credit score as a measure of your creditworthiness, and it can influence the interest rate on your refinanced loan.

A high credit score often translates into a lower interest rate, which could result in substantial savings over the life of your loan. On the other hand, a lower credit score might mean higher interest rates, making refinancing less advantageous. The LendEDU student loan refinance calculator can help you estimate these potential outcomes by illustrating potential monthly payments and total loan costs.

So how can you determine whether you’re likely to qualify for refinancing? Many lenders provide a credit score range they’ll accept for refinancing. If your score falls within this range, chances are good you’ll qualify. Several lenders we’ve researched as the best for private student loan refinancing publish a minimum credit score requirement of 680.

However, lenders also consider other factors, such as:

  • Income
  • Job stability
  • Debt-to-income ratio

If your credit score isn’t quite up to par, improving these other factors might enhance your chances of qualifying.

Remember, shopping around and comparing offers from different lenders can help you secure the best terms for your situation. Just ensure to do your rate shopping within a short period (often 14 to 45 days) to minimize the impact on your credit score.

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:

  • Review multiple offers: Don’t stop at the first offer you see. Each lender has its unique evaluation criteria and interest rates, and you might find a better deal elsewhere. Explore multiple lenders, including banks, credit unions, and online lenders.
  • 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.
  • 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.

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:

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. Subsequently, 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.

Ask the Expert

Erin Kinkade, CFP®

In what situations do you recommend borrowers consider refinancing their student loans?

I might recommend my clients refinance their student loans in the following situations:
They have goal to become debt-free at a specific time or age, and refinancing will optimize reaching this goal.
Their credit score has increased, resulting in more favorable interest rates.
They wish to consolidate for simplicity.
They want to remove a cosigner from the loan.
Overall interest rates have dropped.

In what situations do you recommend borrowers not refinance their student loans?

I might recommend my clients not refinance their student loans in the following situations:
They have a low credit score, resulting in a high interest rate. (We would work on a repayment plan instead.)
We’re in a high-interest-rate environment. (I’d recommend waiting until interest rates lower and continuing to pay and work on a repayment plan.)
Refinancing would not result in overall better terms.

Is there anything mentioned above you would like to address or comment on?

Regardless of your refinancing options, it is wise to 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.