Student Loan Refinance Calculator
Whether you’ve been paying off your student loans for six months or six years, refinancing your loans could seem like a good idea, as it can potentially save you thousands of dollars down the line or make your payments more manageable. However, refinancing isn’t the right move for everyone. Using a student loan refinance calculator can come in handy to help you determine whether this is the best choice for you or if it’s best to wait.
How to decide whether refinancing a student loan is right for you
Refinancing can be a great way to save money on interest on your student loans or make your payments more affordable by choosing a longer term. That being said, refinancing isn’t for everyone. However, it may be right for you if the following is true.
- You’re financially secure. When you take out a new loan through refinancing, you’ll need to prove that you can pay it back. As you complete your application, you’ll be asked about your current employment. If you can’t prove that you can repay your loan, you might not get approved.
- You have private student loans. Federal student loans are under forbearance through June 30, 2022, which suspends payments and interest rates. If you refinance those loans, you lose access to this benefit. Besides that, you’ll also lose access to other protections, including income-driven repayment plans and student loan forgiveness.
- Your loans have a high interest rate. If the interest rate on your student loans is on the higher side (above 6 percent), you may benefit from refinancing, as interest rates for private student loans can be as low as 1.74 percent, depending on your credit.
- You want to simplify your student loan payments. If you have many different loans, refinancing will give you a new loan and repay all your old loans. From there, you’ll make one payment to your new loan. Refinancing gives you one payment, interest rate and monthly due date.
How our calculator works
Our Student Loan Refinance Calculator can help you determine whether now it’s a good time to refinance your student loans. But first, you’ll need to gather some information to ensure you get the most accurate results, including:
- Your current student loan balance.
- How many years of repayment you’ve got left.
- Your loan’s interest rate.
If you don’t know where your master promissory note is (aka the legal document that has the details of your loan), you can find this information by logging into your student loan account on your lender’s website or by contacting customer service.
Once you have these numbers down, you’ll be able to see what your potential monthly payment would look like with a lower interest rate and/or a different repayment term, in addition to any lifetime savings on interest.
When to refinance your student loans
Refinancing your student loans might be a good idea if:
- You're eligible: If you have a solid credit score and a steady job, you may qualify for an interest rate that’s lower than what you’re paying now.
- You’d save money: It’s a good idea to refinance your student loans if you can lower the total interest costs of your loan.
- You’d be able to reduce your monthly payment: Although extending your repayment term will result in more interest paid over the life of the loan, it can be a good idea if you need to make your payments more affordable.