Student loan refinancing companies help borrowers consolidate their student debts into a new loan with better terms, potentially helping them save money on their student loans. You can refinance both federal and private student loans, and most borrowers with good credit and steady income qualify.
To find the best student loan refinance company, there are a number of factors you should consider, including interest rates, terms and fees. The lenders profiled below are a great place to start.
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Reviewed by Mark Hamrick, Bankrate senior economic analyst
As of Friday, May 07, 2021
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When comparing companies that offer student loan refinancing, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of April 22, 2021, but you can check the lenders’ websites for more current information. The top lenders listed below are selected based on factors such as interest rate, loan amounts, fees, credit requirements and broad availability. To read more about how we selected lenders, read our methodology below.
Student loan refinancing is the process of taking out a new loan to pay off your existing student loans. When you refinance your student loans, you may qualify for a lower interest rate and a different repayment timeline, which could help you save money on interest and pay off your loans faster. Student loan refinancing is offered only through private lenders, although you may refinance both federal and private student loans.
Should you refinance student loans during the coronavirus pandemic?
With many Americans currently experiencing reduced income due to the coronavirus pandemic, student loan refinancing is an attractive option for those struggling to make student loan payments. Interest rates on student loans are at record lows, meaning now could be one of the best times to refinance your private student loans if you've been considering it.
However, it's likely not a good idea to refinance your federal loans. Interest and payments are currently waived on federal student loans through Sept. 30, 2021; by refinancing your federal loans, you would be required to make payments with interest and lose the ability to take advantage of any future federal relief programs.
Check your credit score. Many lenders require good credit for you to refinance your loans. If you see that your credit score is on the low side (i.e., below 650), you can take steps to improve it or look for a qualified co-signer.
Shop around. Whether you're refinancing federal or private student loans, one of the most important steps you can take is to shop around. Check with multiple lenders and research student loan refinancing rates to ensure that you're getting the best deal possible.
Choose a loan offer. Lenders that approve you should offer you a variety of repayment options to choose from, which will impact your monthly payment and how much you pay on your loan overall. Select a loan offer that matches your budget and goals.
Send in an application. While some lenders will let you check rates using a simple application form, you'll eventually need to submit a full application. You'll need details about your existing loans, as well as documents verifying your income and other financial details. At this point, you'll go through a hard credit inquiry. Once all of your details have been verified, the lender will either pay off your former loans or send you the funds directly. Payments begin as soon as funds are disbursed.
What are the requirements to refinance student loans?
Once you find a lender that best suits your financial situation, check the specific refinancing requirements. These can vary from lender to lender, but here are a few general criteria to be aware of:
Debt-to-income ratio: Your debt-to-income ratio is a measurement of how much debt you've accumulated in comparison to your monthly earnings. You may have a better chance of getting approved if your debt-to-income ratio is below 43 percent.
Credit score: When you apply for any loan, your credit score has a large impact. Check your lender's credit score requirements before applying. If your credit score is in the mid-600s or lower, you may need to add a co-signer to your loan in order to qualify.
Income: Lenders may impose a minimum income threshold, and they will likely want to see proof of employment — this tells them that you have the cash to make your monthly payments.
Refinancing amount: You will likely need to have a minimum of $5,000 in student loans outstanding if you'd like to refinance. If you have less than that, most lenders won't work with you.
Degree: You'll typically need a degree to be eligible for student loan refinancing, though some lenders accept borrowers regardless of degree status.
If the lender you're considering offers a prequalification tool, you can see your estimated rate based on your general financial history with a soft credit inquiry, which won't hurt your credit score.
Refinancing your student loans makes financial sense only if the loan you apply for has a lower interest rate than the current interest rate of your student loans. You can use a loan calculator to determine your current monthly payment versus that of the loan you're considering.
Whether or not you should refinance also depends on what type of loans you have. Refinancing could be a good idea if you have private loans, but you'll lose benefits if you refinance federal loans. These include:
Income-driven repayment plans.
Loan forgiveness programs.
Deferment and forbearance options.
Waived interest and payments due to the coronavirus pandemic.
What is the difference between student loan consolidation and student loan refinancing?
Student loan consolidation is the process of combining federal student loans into one federal Direct Consolidation Loan. This gives you a fixed interest rate based on the weighted average of your current loans' interest rates, and you won't lose federal protections.
Student loan refinancing is the process of taking out a new loan with a different interest rate and different terms to pay off your existing loans. You can refinance both federal and private loans, but the process must be done with a private lender.
Refinancing to a longer repayment period gives you a lower monthly payment.
Cons:
Private lenders usually require good or excellent credit (or a co-signer) to qualify for a new loan with their best rates and terms.
You give up federal protections like deferment, forbearance and income-driven repayment plans when you refinance federal loans with a private lender.
You’re locking yourself into another repayment plan.
How to choose between a fixed-rate and a variable-rate loan
Most private lenders will let you refinance with either a fixed or a variable interest rate. With a fixed rate, your interest rate will never change, meaning your monthly payment will remain consistent. With a variable interest rate, your interest rate can fluctuate month-to-month based on market conditions.
The choice between a fixed or variable rate comes down mostly to your risk tolerance. If you value predictability in your finances, a fixed rate is a better choice — particularly if you can lock in a low rate. You do have the chance to save more money with a variable interest rate if interest rates dip below your starting rate, but the inverse is true as well; it's possible that interest rates could rise during your repayment term, costing you more money overall unless you can pay off your loan early.
It is possible to refinance your loan if you have bad credit, though the process will be more difficult. Most lenders require a credit score in the mid-600s, and even if you do qualify, you'll likely see higher interest rates. If this is the case, refinancing ultimately may not be worth it. Before applying for a student loan refinance, check your credit score to know where you stand and compare that against lenders' listed credit requirements.
Shop around: Shopping around with at least three lenders is the best way to determine which lender is best for your situation. You'll likely get higher rates if you have bad credit, but some lenders may be more forgiving than others.
Improve your credit: Where possible, work on improving your credit score before submitting your application. Try to pay off as much debt as possible, pay your bills on time and avoid any other loan or credit card applications prior to applying for your refinance loan.
Apply with a co-signer: If you have a friend or family member who is willing to co-sign your loan with you, you could get a break on your rate — particularly if that person has excellent credit.
Improve your cash flow: Lenders check your debt-to-income ratio when considering your application. To have a better chance at qualifying, pay down as much debt as you can before applying or find ways to supplement your income.
Details: Student loan refinance rates in 2021
The best student loan refinancing companies offer competitive interest rates and fees for qualified buyers. These companies also offer helpful resources on their websites, as well as the ability to apply for student loan refinancing online. Compare each of these lenders' loan terms and limitations before you apply.
Overview: SoFi is one of the most popular lenders for student loan refinancing, and it’s easy to see why. This lender offers loans with competitive interest rates and no hidden fees, including no origination fees. You can even get prequalified for student loan refinancing online and without a hard inquiry on your credit report.
Perks: There are no fees with SoFi, and you can qualify for an autopay discount of 0.25 percent. SoFi's interest rates are exceptionally low, though the rate you're quoted depends on your credit score, your income and other factors.
What to watch out for: SoFi may not be a good option for people without stable income; it offers refinancing only to university graduates who have sufficient income, a responsible financial history and a strong monthly cash flow.
Lender
SoFi
APR
Variable: 2.25% to 6.54% (with autopay)Fixed: 2.99% to 6.99% (with autopay)
Loan amounts
$5,000 to full balance of qualified education loans
Loan terms
5 to 20 years
Fees
None
Best student loan refinance company for flexible repayment options: Earnest
Overview: Earnest lets you refinance your student loans with the potential for a low APR and flexible repayment options. In fact, Earnest even lets you pick a payment that fits with your budget, meaning it will tinker with the length of your loan until you land on a monthly payment you can afford. Variable interest rates start at 1.99 percent APR and fixed rates at 2.98 percent APR.
Perks: Earnest student loans don’t come with any origination fees. Earnest also offers customized rates based on a variety of factors outside of your credit score, and you can skip a payment once every 12 months if you need some breathing room.
What to watch out for: You typically need a credit score of at least 650 to refinance your student loans with Earnest.
Lender
Earnest
APR
Variable: Starting at 1.99% (with autopay)Fixed: Starting at 2.98% (with autopay)
Loan amounts
$5,000 to $500,000
Loan terms
5 to 20 years
Fees
Returned payment fee: Up to $8; Florida stamp tax: 0.35%
Best student loan refinancing company for students in health care: Laurel Road
Overview: Laurel Road is a lender with low rates, a variety of repayment terms and a robust online experience. It's a particularly good choice for undergraduate and graduate students who are in the health care field; while most lenders require you to be out of school in order to refinance your student loans, Laurel Road allows students in health care to refinance as early as their final semester of school if they have found employment.
Perks: Among Laurel Road's perks is a quick application process — you should have a quote in as little as five minutes — and your choice of repayment term. The standard repayment terms are five, seven, 10, 15 and 20 years, but you can request any term length below 20 years.
What to watch out for: If you are not in a health care field, you must be employed for at least 12 months before becoming eligible for a Laurel Road student loan refinance.
Lender
Laurel Road
APR
Variable: 1.89% to 5.9% (with autopay)Fixed: 2.8% to 6% (with autopay)
Loan amounts
$5,000 to full amount of education loans
Loan terms
5 to 20 years
Fees
Late fee: 5% or $28; Nonsufficient funds fee: $20
Best student loan refinancing company for forbearance protection: CommonBond
Overview: CommonBond lets you get prequalified for a new loan online and without a hard inquiry on your credit report. This lender offers fixed rates that start at just 2.59 percent APR and variable rates that start at 2.5 percent APR, and you can repay your loan in five to 20 years. This lender also offers loans with no prepayment fees or origination fees.
Perks: CommonBond offers up to 24 months of forbearance if you endure a hardship while paying down your student loans. It also offers a unique hybrid-rate loan, which gives you a fixed rate for the first five years of loan and a variable rate for the final five years. This allows you to pay down the majority of your interest while on a fixed rate and take advantage of a variable rate for the second half of your payments.
What to watch out for: The minimum credit score for student loan refinancing with CommonBond is 660, which may be out of reach for some borrowers.
Lender
CommonBond
APR
Variable: 2.5% to 6.85% (with autopay)Fixed: 2.59% to 6.74% (with autopay)Hybrid: 2.87% to 6.56% (with autopay)
Loan amounts
Up to $500,000
Loan terms
5 to 20 years
Fees
Late payment fee: 5% or $10, whichever is less; Returned check fee: $5
Best student loan refinancing company for available discounts: Citizens Bank
Overview: Citizens Bank offers student loan refinancing for borrowers who need to refinance up to $750,000 in student loans, although maximums vary based on your degree type. Variable interest rates as low as 2.19 percent APR are available, and you can choose a repayment option between five and 20 years.
Perks: You can qualify for several discounts that can reduce your interest rate, including a loyalty discount and an automatic payment discount. These discounts can knock 0.5 percent off your APR, saving you even more money over the long term.
What to watch out for: You need to have at least $10,000 in loans to refinance with Citizens Bank.
Lender
Citizens Bank
APR
Variable: 2.19% to 8.85% (with autopay)Fixed: 2.89% to 9.1% (with autopay)
Loan amounts
$10,000 to $750,000
Loan terms
5 to 20 years
Fees
None
Best student loan refinancing company for long repayment terms: LendKey
Overview: LendKey pairs with multiple student loan lenders to offer student loan refinancing with variable APRs starting at 1.9 percent and fixed APRs starting at 2.95 percent. There are no origination fees.
Perks: Like several other lenders, LendKey lets you refinance your student loans in terms of up to 20 years. This means that you could significantly lower your monthly payment by taking on a longer loan.
What to watch out for: LendKey is a lending platform that connects you with multiple lenders in this space. In other words, it doesn't lend the money itself. It only matches you with eligible lenders that may be able to meet your student loan refinancing needs.
Lender
LendKey
APR
Variable: 1.9% to 5.25% (with autopay)Fixed: 2.95% to 7.63% (with autopay)
Loan amounts
$5,000 to $300,000
Loan terms
5 to 20 years
Fees
Varies by lender
Best student loan refinancing company for no fees: College Ave
Overview: If you want to refinance your student loans and you don’t want to pay any fees, College Ave is worth checking out. This lender offers variable rates as low as 3.24 percent APR and fixed rates as low as 3.34 percent APR, and you can refinance up to $300,000 in student debt if you have a medical, dental, pharmacy or veterinary doctorate degree. Loan limits are lower for other degrees.
Perks: This lender doesn’t charge any fees for its loans. You can also choose among 16 different loan terms and repayment plans.
What to watch out for: The maximum loan amount for undergraduate borrowers is $150,000, which is less than that of many other lenders.
Lender
College Ave
APR
Variable: 3.24% to 5.54% (with autopay)Fixed: 3.34% to 5.69% (with autopay)
Loan amounts
$5,000 to $300,000
Loan terms
5 to 20 years
Fees
Late fee
Best student loan refinancing company for low rates: Splash Financial
Overview: Splash Financial is a lending marketplace that advertises some of the lowest rates for student loan refinancing, and you can borrow from $5,000 to the full amount of your loans.
Perks: In addition to potentially low rates, you can also receive a $200 cash bonus when you refinance your loans and refer a friend who refinances their loans.
What to watch out for: Splash works with banks and credit unions, which are its lending partners. In other words, Splash doesn’t originate the loan itself — meaning you may have to become a member of a credit union in order to receive your loan. Because Splash doesn't originate its own loans, your potential fees and discounts will vary based on which lender you're matched with.
Lender
Splash Financial
APR
Variable: 1.89% to 5.51% (with autopay)Fixed: 2.63% to 6.25%
Loan amounts
$5,000 up to full amount of education loans
Loan terms
5 to 25 years
Fees
None
Frequently asked questions about student loan refinancing
Am I eligible for student loan refinancing?
Student loan refinancing companies all have their own eligibility requirements that you’ll have to meet to get approved. Generally you'll need to have a good credit score, a decent debt-to-income ratio, stable income, a bachelor's degree or higher and a student loan balance of at least $5,000. We suggest checking eligibility requirements for any company you’re considering.
You can also use a student loan refinancing platform like LendKey to compare rates among multiple banks and credit unions. This way, you can enter your information once and compare loan offers from companies whose eligibility requirements you meet.
How can I choose the best refinancing company?
To find the right lender for you, compare student loan refinancing companies' interest rates and repayment terms. Also check for hidden fees, including application fees and late fees. If your goal is finding the best student loan refinance rates, we recommend shopping around with at least three lenders and taking advantage of any prequalification offers if they're available — prequalification allows you to check your eligibility and rates without impacting your credit score.
What credit score do I need to refinance my student loans?
Credit score requirements vary from lender to lender, but you'll likely need a credit score in the mid- to high 600s in order to refinance your student loans. However, if you have less-than-stellar credit, you still may be eligible to refinance your loans with the help of a co-signer who has a credit score in that range.
When should I refinance my student loans?
There isn't a single best time to refinance — the decision is personal and comes down to your financial situation and current interest rates. However, as a rule of thumb, it's usually only worth it to refinance if you can get a lower interest rate or a lower monthly payment than what you're currently paying on your student loans. Typically, you'll want to wait until you have strong credit and a stable job before refinancing.
What types of loans are eligible for refinancing?
Most private lenders will refinance any type of student loan — federal or private. However, you may encounter different rates for different types of loans.
Methodology
To find the best student loan refinancing companies, we selected lenders based on the following criteria:
Broad availability.
Wide range of loan amounts and repayment options.
Low starting interest rates.
From there, we evaluated lender fees, APR ranges and eligibility requirements to see which lenders kept costs low and catered to a variety of borrowers. We also looked for unique features that set lenders apart — for instance, good forbearance options or benefits for students in health care fields — to determine our final rankings and recommendations.
