Student Loan Refinance Requirements

Refinancing student loans involves taking out new loans from a private lender to pay off existing education debt. Borrowers may benefit from a lower interest rate, streamlined monthly payments, a more favorable repayment term, or some combination of all three. 

Federal and private student loans can be refinanced, but there are some tradeoffs to federal student loan refinancing. Namely, you could forgo federal loan benefits, such as forbearance and deferment periods, income-driven repayment plans, and various loan forgiveness programs such as public service loan forgiveness (PSLF). 

Before moving ahead with student loan refinancing, it helps to know what you can expect—and what lenders might expect from you. Specific student loan refinance requirements can vary by lender, but familiarizing yourself with the basics can help you prepare to apply for a loan. 

Standard student loan refinance requirements

Requirement	Why it’s important
Credit score	Most lenders check borrowers’ credit before refinancing to ensure the borrower is creditworthy (good score or better) and to assess how risky it is to refinance their loans.
Income	Lenders want reassurance that you’ll have sufficient income to make the payments on your loans once you’ve refinanced.
Debt-to-income ratio	In addition to knowing how much income you have, lenders are also interested in how much goes toward existing monthly debt payments.
Degree/field of study	Some lenders consider your degree or field of study for student loan refinancing to indicate your earning potential and ability to make loan payments over the long term.
Citizenship	Lenders may base eligibility on citizenship, with some lending only to U.S. citizens and others extending loans to non-citizens.
Cosigner	Your existing loan may have a cosigner or coborrower. Your refinanced loan may or may not require a cosigner depending on whether you can qualify for the loan on your own.
Loan amount	Lenders may have a minimum or maximum amount you can borrow for student loan refinancing.

Credit score

Credit scores measure how responsibly you manage credit and debt. The two main credit scoring models, FICO and VantageScore, range from 300 to 850. An 850 credit score is the highest you can achieve, while a 300 score is the lowest. 

If you’re unsure of your credit score, there are a few ways to check it, including:

• Signing up for a free credit monitoring service that furnishes scores, such as Experian Boost
• Checking to see if your credit card company or bank offers free monthly credit score reporting
• Purchasing your credit scores from myFICO or one of the three credit reporting bureaus

It’s important to note that there is no such thing as a single credit score. Different sources may return slightly different scores. As such, scores reported to you may vary slightly from what is reported to the student loan lender.

That said, understanding where your scores generally fall can help you compare them to the minimum credit score requirements at different lenders. Here are a few to start, including one option with no minimum credit score. 

Lender	Minimum credit score
ELFI	680
Earnest	650
SoFi	650
Nelnet Bank	Mid-600s
Credible	580+
RISLA	None

Income

Lenders usually expect borrowers to have verifiable income to qualify for student loan refinancing. However, lenders may have different expectations when it comes to:

• The amount of income you have
• Where that income is coming from
• How often you receive it (i.e., weekly, monthly, etc.)

You may be asked for pay stubs, tax returns, or bank account students to verify your income. Refinancing student loans when self-employed can get a bit trickier as you may need to provide two years of tax returns as proof of income. Some lenders, however, have no income requirements at all, as is the case with Nelnet Bank. 

Here’s how income requirements at top lenders compare. 

Lender	Income requirements
ELFI	$35,000
Earnest	Consistent income is required
SoFi	None, but you must have disposable cash after paying living expenses
Nelnet Bank	None
Credible	Varies by lender
RISLA	$40,000

Debt-to-income ratio

Debt-to-income ratio measures how much of your monthly income goes to debt repayment. You can calculate your DTI by dividing your total monthly debt payments by gross monthly income. 

For example, if your total debt payments are $1,200 and your gross monthly income is $5,000, your DTI works out to 0.24 or 24% (0.24 x 100). 

Generally speaking, a lower DTI is preferable as it suggests that you can pay your debts without tying up a significant chunk of your income. Similar to credit score and income requirements, the DTI you’ll need for student loan refinancing can vary by lender. 

Ask the expert

David Haas

CFP®

There isn’t really a single debt-to-income ratio to aim for. If you own your home and have a mortgage, your mortgage payment plus all other debt payments divided by your annual gross income should be less than 36% (this is sometimes called a “back-end” mortgage qualification ratio). There is a consumer credit debt-to-income ratio that only includes consumer debt (such as credit card debt), which should be less than 15%. Many people feel that a good total debt-to-income ratio is less than 43%, but other lenders look for it to be below 36%.

Degree 

Lenders may expect you to have completed a college degree to refinance student loans. Some lenders may accept an associate’s degree, while others may require you to have obtained a bachelor’s degree or higher. 

If the lender allows, it may be possible to refinance your student loans while you’re still in school. You may need to meet certain requirements, such as being in the last year or last semester of study toward your degree. 

RISLA is one student loan refinancing option that has no minimum degree requirement. 

Lender	Degree requirements
ELFI	Bachelor’s degree or higher
Earnest	Associate’s or higher
SoFi	Associate’s or higher
Nelnet Bank	Bachelor’s degree or higher
Credible	Varies by lender
RISLA	Students must attend a Title IV degree-granting school

U.S. citizenship

Student loan refinance requirements often include citizenship guidelines. Some lenders may offer refinance loans exclusively to United States citizens, while others extend eligibility to permanent residents or international students. 

You probably need a U.S.-based cosigner if you are not a permanent resident. 

In addition to citizenship requirements, you may also need to be aware of state residency requirements. 

While some private student loan lenders offer loans nationwide, others may only be licensed to operate in certain states. That’s an important consideration as you search for the right student loan refinance option. 

Lender	Citizenship requirements
ELFI	U.S. citizen or permanent resident
Earnest	U.S. citizen or permanent resident
SoFi	U.S. citizen or permanent resident Non-permanent resident aliens DACA recipients Asylum seekers
Nelnet Bank	U.S. citizen or permanent resident
Credible	U.S. citizen or permanent resident
RISLA	U.S. citizen or permanent resident

Cosigner

You may need a creditworthy individual to cosign a refinance student loan if your credit isn’t strong enough to qualify independently. A cosigner assumes equal liability for the debt while allowing the lender to use their credit scores to determine approval and loan terms. 

Having a cosigner could work in your favor if they have a strong credit profile, as that could help you get a lower interest rate or more favorable loan terms. If you’re considering private student loan refinancing with a cosigner, it’s worth seeing which lenders offer cosigner release. 

Cosigner release allows a cosigner to be excused from their liability toward the debt without requiring you to refinance yet again. There are usually conditions to cosigner release, including making a certain number of consecutive loan payments first. 

Lender	Cosigner requirements
ELFI	Optional, but no cosigner release
Earnest	Optional, but no cosigner release
SoFi	Optional, with cosigner release after 24 months of consecutive, on-time payments
Nelnet Bank	Optional, with cosigner release after 24 months of consecutive, on-time payments
Credible	Varies by lender
RISLA	Optional, but no cosigner release

Loan amount

One last thing lenders may consider for student loan refinancing is how much you owe. Lenders may specify certain types of loans that qualify for refinancing or have a minimum and maximum amount you can refinance. 

For example, you might need at least $5,000 but no more than $500,000 in federal and private loans. 

After comparing credit scores, this may be the next most important factor to consider. For instance, if you have more than the maximum debt a lender allows, you may need to consider a different loan option or multiple refinance loans. 

Lender	Loan requirements
ELFI	$10,000 minimum
Earnest	$5,000 minimum for most borrowers $10,000 for California residents $10,000.01 for New Mexico residents
SoFi	$5,000 minimum
Nelnet Bank	$5,000 minimum $500,000 maximum
Credible	Varies by lender
RISLA	$7,500 minimum $250,000 maximum

What if you can’t meet all student loan refinancing requirements? 

You still have some options if you cannot check off all the boxes for student loan refinancing. What you decide to do next can depend on how pressing the need to refinance is and what’s keeping you from qualifying. 

Here are some potential action steps for succeeding with student loan refinancing:

• Get a cosigner. Applying with a cosigner who has a good credit score could make it easier to get approved for a new loan. Remember that failing to make the loan payments could jeopardize your credit and your cosigner’s.
• Compare more lenders. You could cast the net wider if you haven’t exhausted all lending options yet. Here, you’d need to consider more student loan refinance lenders to see if any are more flexible regarding qualification and approval. 
• Try federal loan consolidation. If you primarily owe federal student loans you might consolidate them versus refinancing. Direct Loan consolidation allows you to combine multiple federal loans into one, streamlining monthly payments but without lowering the interest you will pay. 
• Wait. The last option is simply to wait until your situation improves enough to allow you to qualify for refinancing. You might be able to speed things along by improving your credit score, paying down other debts, or looking for ways to increase your income. 

Ask the expert

David Haas

CFP®

If you are concerned that you might not qualify for student loan refinancing, you should evaluate each lender’s criteria closely. If it’s a problem of a poor credit score, you can find ways to improve your credit score by lowering your outstanding credit and being very vigilant about paying all your bills on time. You should review your credit report multiple times yearly and correct any accuracy issues with the credit reporting agencies. Improving your income might be an option if you are having a problem because of a poor debt-to-income ratio. Taking on some additional part-time work may improve your income enough to qualify.

FAQ 

How does refinancing affect my credit score?

Refinancing requires a hard credit check, which affects your credit score for several months. A small decrease, typically a few points, might occur. However, your credit score could rebound and improve with regular on-time payments on your refinanced loan.

Can I refinance federal and private student loans?

Yes, federal and private student loans are eligible for refinancing. Remember: Refinancing federal loans with a private lender means forfeiting federal benefits, such as income-driven repayment plans or loan forgiveness options. 

Assess your situation and long-term financial plan before making a decision.

How often can I refinance my student loans?

There’s no legal limit on how often you can refinance student loans. If you could secure a lower interest rate or better terms, it’s worth considering. However, remember each time involves a hard credit check, which can lower your credit score.

Do refinancing lenders charge fees?

Most refinancing lenders don’t charge fees for refinancing student loans. This includes application, origination, and prepayment fees. 

However, reading the fine print before you sign any agreement is important. Every lender has different policies, and some may charge fees not common to others.

What happens if I can’t pay my refinanced loan?

If you can’t make your refinanced loan payments, contact your lender immediately. Many lenders offer forbearance options, allowing you to halt or decrease your payments. 

It won’t eliminate your debt, but it can relieve a crisis. Defaulting on your loan can lead to serious credit score damage. Make sure you understand your lender’s hardship policies before you proceed with refinancing.

Will refinancing my student loan lower my payments?

Refinancing your student loan could lower your payments in two ways. First, a lower interest rate can lower your payment. Second, your refinanced loan may have a longer term that stretches out the payments over more time. This can lower each payment, although you may pay more interest over the lifetime of your loan. 

It is important to check whether your new payment will be lower than your old one before moving forward with the refinancing.