Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Student Loans Can I Transfer My Private Student Loan to Another Lender? Updated Dec 06, 2023   |   7-min read Written by Kristen Barrett Written by Kristen Barrett Expertise: Writing, content design, proofreading, grammar, vocabulary Kristen Barrett is a managing editor at LendEDU. She lives in Cincinnati, Ohio, and has edited and written personal finance content since 2015. Learn more about Kristen Barrett Reviewed by Erin Kinkade, CFP® Reviewed by Erin Kinkade, CFP® Expertise: Insurance planning, education planning, retirement planning, investment planning, military benefits, behavioral finance Erin Kinkade, CFP®, ChFC®, works as a financial planner at AAFMAA Wealth Management & Trust. Erin prepares comprehensive financial plans for military veterans and their families. Learn more about Erin Kinkade, CFP® You’re saddled with student loan debt and wondering whether you can transfer your private student loan to another lender. It’s a common question, but in the private student loan industry, what you’re really asking is: Can I refinance? The two terms are often interchangeable, but in most cases, the action you’ll take is refinancing. Table of Contents Skip to Section How to transfer your private student loan to another lenderBenefits of refinancing with another private lenderPros and cons of switching lenders via refinanceCan I transfer my private student loan to another lender by refinancing?FAQ How to transfer your private student loan to another lender Switching your student loan to another lender isn’t as simple as “transferring” because you don’t get to keep all the same terms. The process is known as refinancing. Why might you consider it? Reasons include: Seeking lower interest rates: A lower rate can save you thousands over the life of your loan.Unhappy with current lender: Maybe customer service isn’t up to par.Desire for better loan terms: Whether it’s a more flexible repayment plan or a shorter loan term, different lenders offer unique benefits. Understanding the nuances can help you make an informed decision about whether this is the right move for you. Ask the expert Erin Kinkade CFP® Looking to refinance in a high-interest-rate environment might be unwise if the goal is a lower interest rate. However, if your credit score and report have significantly improved, refinancing to a new loan may result in a lower interest rate regardless of the current rate environment. Refinancing to a variable-interest-rate loan could be beneficial, assuming rates decrease, but that’s always a risk because rates could increase again at any time. When you refinance, you take out a new loan with a different lender to pay off your current one. Here’s how it works: Check your credit score: A strong credit score often leads to more favorable loan terms. (More about this below.)Research lenders: Shop around for lenders offering the best rates or terms. Armed with your credit score, you can research lenders that specialize in your category.Submit your application: Once you’ve selected a lender, complete its loan application.Review offer: If approved, examine the loan terms carefully.Finalize the loan: After agreeing to the terms, your new lender pays off the old loan, and you begin repayments to them. For more details on the process, check out “How to Refinance Student Loans.” Tip Here are ways to check your credit score: Credit reporting agency: Equifax, Experian, and TransUnion are the main credit reporting agencies. (Each agency reports differently, so we recommend checking your report at all three.)Financial institutions: Check whether your bank or credit union offers free credit score checks as part of its services, especially if you have a credit card with it.Online tools: Platforms such as Credit Karma and Credit Sesame provide free credit scores and reports. Keep in mind that these scores may be estimates.Credit card statement: Some credit card companies provide your credit score on your monthly statement or through their online portals. Always check whether the service is free and will affect your credit score. Most of the methods above are “soft inquiries” and won’t lower your score. What does my credit score mean? Now that you’ve checked your credit score, you can look for student loan refinance lenders specializing in your category—or perhaps devise a plan to improve your credit score before taking the next step. FICO score rangeCredit category300 – 579Poor580 – 669Fair670 – 739Good740 – 799Very good800 – 850Excellent What the categories indicate Poor: You might find it difficult to get approved for a refinance loan. If you do, expect high interest rates.Fair: You have a chance at approval but with less favorable terms.Good: You’ll likely get approved for a refinance with moderate interest rates.Very good: You can expect better-than-average interest rates and terms.Excellent: You’ll get the best interest rates and terms available. Remember, your FICO score isn’t static; it changes as your financial behaviors change. Monitoring your credit report can give you insights into how to move to a better category. Benefits of refinancing with another private lender Refinancing can be advantageous for several reasons. Imagine you’re considering switching lenders because your current loan, with a $10,000 balance, has a variable interest rate. This rate was low when you took out the loan, but as rates have increased, so did your APR—to 10%. You have 15 years remaining on your current loan but want to repay it sooner. Here’s how transferring your loan to another lender via refinance, and choosing a fixed rate and shorter term, might benefit you: Student loans with old lenderAfter refinancing with a new lenderDifferenceRemaining loan balance$10,000$10,000—APR10% (variable)6% (fixed)—Repayment term15 years10 years–5 yearsMonthly payment$107$111+$4Total amount paid$19,279$13,322–$5,957 By refinancing, your monthly payment would be almost the same—but you could save almost $6,000 and be debt-free five years sooner. Plus, you’ll no longer need to worry about your variable rate increasing and raising your monthly payments. Pros and cons of switching lenders via refinance While switching your private student loan to another lender through refinancing comes with benefits, it also has drawbacks. Knowing these can help you weigh your options. Pros Lower interest rates A lower rate can mean significant savings over the life of the loan. Better loan terms Shorter loan periods or more favorable conditions can make managing debt easier. Flexible repayment options Some lenders offer options such as income-driven repayment plans, giving you financial breathing room. Cons Credit inquiries Applying for a new loan involves a hard credit check, which could lower your credit score by a few points. Loss of original loan perks Your current lender may offer benefits such as rate discounts for autopay, which you could lose. Possible fees Some lenders charge fees for the refinancing process, which can eat into your savings. Can I transfer my private student loan to another lender by refinancing? To switch your private student loan to another lender, you must meet eligibility criteria—or add a cosigner. Common requirements include: Good to excellent credit score: Often 650 or higher.Stable income: A steady job with consistent income can help you get approved at low rates.Debt-to-income ratio: Many lenders want to see a reasonable level of debt (e.g., 40% or less) compared to your income. However, you may not be eligible in certain cases. For example, lenders might be wary if your income isn’t consistent. For more on this topic, visit our resource, “Can you refinance student loans?“ If financial institutions or companies offer guarantees that seem too good to be true, be wary. Steer clear of high fees. I always recommend starting with the Better Business Bureau website for due diligence. Erin Kinkade CFP® Transferring a private student loan to another lender means entering the world of refinancing. It’s crucial to understand this and weigh the pros and cons. Every financial situation is unique, so assess yours before making any moves. Check out our guides for more: How to refinance student loansThe best student loan refinance companiesStudent loan refinance calculator FAQ Do I need a high credit score to switch lenders? A good to excellent credit score—often 650 or higher—is a typical requirement to secure better loan terms when switching lenders. If you have less-than-stellar credit, consider asking a close friend or family member to cosign your loan. Will switching lenders affect my credit score? Yes, you’ll likely see a dip in your credit score due to the hard inquiry when you apply for a new loan. Can I lose benefits from my original lender if I switch? Yes. If your original lender offers perks, such as rate discounts for autopay, you may lose these benefits when you switch. Are there fees associated with switching my student loan to another lender? Fees can vary. Many lenders don’t charge an origination fee, but it’s crucial to read the fine print. How long does switching lenders via refinance take? The time frame can range from two weeks to over a month, depending on the lender and your individual circumstances. Is it possible to switch lenders if I have a cosigner on my current loan? Yes, but the cosigner must also meet the new lender’s eligibility criteria. Some lenders also allow for cosigner release during refinancing, provided you qualify for a refinance student loan on your own. Can I switch lenders more than once during the life span of my loan? You can as long as you meet the eligibility requirements, you can refinance as many times as you wish. Just be aware of the effect on your credit score and report (a new inquiry each time you refinance, which could lower your score). How can I compare the terms and rates between my current lender and potential new ones? Research and compare the APRs, loan terms, and any associated fees. Online loan comparison tools can be helpful.