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Student Loans

Student Loan Refinance Rates

Student loan refinancing allows you to combine multiple federal or private student loans into one loan with a single payment. You can also use student loan refinancing to secure a lower rate. In either case, student loan refinancing refers to a new loan with a private lender. Student loan refinancing can help you simplify student loan payments and—ideally—save money.

If you’re considering refinancing, we’ll cover the best student loan refinancing rates available today. We’ll also help you understand how refinancing rates might compare to your original rates and how that can affect the overall cost. Finally, we’ll help you decide whether refinancing is a good idea and how to know whether it can save you money.

The best student loan refinance rates 

Dozens of companies offer student loan refinancing, making it tough to know which one to choose. Interest rates aren’t the only factor that matters, but they’re among the most important to consider when refinancing. 

These companies offer some of the best rates available today:

LenderStarting rates
Purefy4.49% fixed

5.09% variable
Brazos4.75% fixed

5.34% variable
Lend–Grow4.90% fixed

5.28% variable
Earnest5.19% fixed

5.99% variable
NaviRefi5.19% fixed

5.84% variable
Splash Financial5.19% fixed

5.99% variable
SoFi5.24% fixed

6.24% variable
Education Loan Finance (ELFI)5.48% fixed

5.28% variable
Laurel Road5.49% fixed

5.24% variable
INvestED5.85% fixed

8.40% variable
MEFA6.20% fixed
RISLA6.34% fixed
ISL Education Lending6.93% fixed

How do student loan refinance rates compare to original student loan rates? 

Depending on the kind of student loan you have and when you signed up, refinancing could lead to substantial savings in the long run.

You can see what we mean in the table below:

School yearFederal loan typeInterest rate (APR)
1994 – 1995Stafford8.25%
2012 – 2013Direct Unsubsidized6.80%
2021 – 2022Direct Unsubsidized3.73%

Federal student loan rates are fixed, meaning the rate won’t change for the life of the loan. If you took out a fixed-rate student loan when rates were higher, you’ll pay those higher rates for the duration of repayment. In this case, refinancing your student loans with one of the lenders we mentioned above could help you save money.

But rates aren’t the only factor to consider. You should also think about:

  • The loan term (a longer term can lead to a lower payment but more interest paid even if the rate is lower)
  • Origination fees and other costs

Federal student loan rates are fixed, but refinancing can be fixed or variable. A fixed-rate student loan with a low APR can save you significantly on interest. But if rates are high, you can refinance with a variable rate, which can lower your payments when rates go down—and reduce the interest you pay.

Also consider how much you value predictability. Suppose you have a fixed-rate student loan at 7%. Lower rates may be possible, especially if your credit improves. But if you prefer the stability of knowing what your payment will be every month, you might prefer this to a variable rate. The best choice depends on your preferences and what works best for you.

Should I refinance my federal student loans if I can get a lower rate? 

If you have a federal student loan with a high rate, consider refinancing at a lower rate. You may have taken out a student loan when rates were higher and are struggling to keep up with your payments, so you wonder whether refinancing now will lead to a lower payment and overall cost savings.

It might—but refinancing federal versus private loans requires consideration. In the table below, we’ve listed the benefits of federal loans. As you can see, you can’t get many of these benefits with private lenders.

Federal loansPrivate loans
Federal loan forgiveness programs
Eligibility for income-driven repayment plans
Deferment and forbearance options
Government pays interest during deferment periods
(Subsidized only)
Fixed rates
(Many lenders also offer variable rates)
Federal consumer protections (e.g., discharge upon death or permanent disability)
Direct Loan Consolidation options
No credit requirements ✅*
Eligibility for future federal benefits (e.g., loan relief or forgiveness programs)
*PLUS loans require a credit check

So if you have federal student loans, refinancing them with a private company means giving up federal student loan protections. For instance, income-driven repayment can reduce your payment if you experience a loss of income. With Public Service Loan Forgiveness, you can have your student loans forgiven after making 120 qualifying payments while working in public service. You don’t have either option with private student loans.

Refinancing federal student loans can make sense if your rate is much lower after refinancing. But before you proceed, ensure you won’t regret giving up federal protections—because once you refinance with a private lender, you can’t get them back. Also, consider factors such as your credit score and income. The higher your credit score and income, the lower your refinancing rate might be.

If you can get a lower variable rate, remember this may not always be the case. Several factors may cause variable rates to rise, leading to more interest and higher payments.

Our expert’s take on the economic climate in early 2024

Erin Kinkade

CFP®

Deciding between fixed and variable rates now is challenging due to the unknowns of where the Federal Reserve is going with interest rates. The Fed has paused raising rates, but we don’t know whether it will soon lower them. The Fed will likely discontinue increasing rates and reduce them instead. With the outlook of a recession decreasing or the impact lessening, the hope is that inflation will reset to the average of 2% to 3%, which will then carry over to interest rates decreasing for all types of loans. If you don’t need to decide right now, I recommend waiting to see whether rates fall in 2024 or 2025 and refinancing to a fixed rate if you prefer predictability. You could also refinance now with a variable rate and not lock in a higher rate. This assumes the ultimate goal is to pay the least interest possible while considering your cash flow and budget allowances.

How to qualify for the best student loan refinance rates 

Qualifying for the best student loan refinance rates requires a combination of strong financial factors and strategic moves. You might be able to secure a better rate with the following:

  • High credit score: A good to excellent credit score (often 690 or better) is one of the most critical factors in getting a low rate.
  • Low debt-to-income ratio (DTI): Your DTI is the ratio of your monthly debt payments to your gross monthly income. For instance, if your monthly income is $5,000 and your monthly debt payments are $1,500, your DTI is 30% ($1,500 / $5,000). It’s best to aim for a DTI below 36%.
  • Steady employment and high income: Stable and predictable (high) income can show you can make your payments reliably.
  • Strong repayment history: A history of paying the loans you’re refinancing on time can help you get a better rate.
  • Cosigner with excellent credit: If your credit score isn’t as high as you’d like, you can secure a better refinancing rate by having a cosigner with excellent credit. However, this will make them liable for your loan if you can’t make payments.
  • Shopping around: Different lenders can have very different refinancing rates. Compare multiple quotes to find the best rate.

Other factors can affect the refinancing rate, such as the loan amount and the term length. For instance, a 20-year loan with a high balance might have a higher rate than a 5-year loan with a small balance.

In addition, even if the average student loan rate drops, this doesn’t guarantee that your rate will be lower. This is why a high credit score and a low DTI are important. If a refinancing quote seems high, compare it to other lenders’ rates before signing up.

FAQ

What is the average refinance rate for student loans?

Based on the current market conditions and the lender involved, you can expect an average interest rate range from 2% to 9%. However, the exact rate will depend on your financial profile and credit score. Better credit scores often warrant lower rates.

Can student loan refinance rates change?

Variable student loan refinance rates can fluctuate based on complex market forces. The lender can change rates, often monthly or quarterly, in line with prevailing economic trends. 

It’s crucial to stay updated about potential changes to ensure the most favorable terms when refinancing your student loans.

Can I refinance my student loans more than once?

Yes; there’s no specific limit to how many times you can refinance. However, make refinancing decisions with care. Consider changes in interest rates, the remaining loan term, and the refinancing costs.

Our expert’s advice

Erin Kinkade

CFP®

You might consider refinancing more than once if your credit score drastically improves, your income increases, interest rates decrease, or a new product (for example, a new student loan refinance program) becomes available that would be more favorable than your current terms. Another reason is if you experience unacceptable customer service with your current lender.

Should I always choose the refinancing lender with the lowest rates?

When choosing a lender for student loan refinances, evaluate its reputation, interest rates, and general terms. Check whether the lender offers fixed and variable interest rates, and consider which option best suits your financial situation. 

The lowest rate may not always be the best choice if it comes with problematic conditions or fees. Research your options before proceeding with a quote.