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Student Loan Refinance Calculator

Whether you’ve been paying off your student loans for six months or six years, refinancing your student loans could seem like a good idea. You could save hundreds or thousands of dollars, but it’s not for everyone. A student loan refinancing calculator can help you determine how much you can save. Once you have an idea of the APR and terms available to you from lenders, you can input those new terms, plus your current loan terms, into the calculator — from there, you can see how your monthly payment, total interest costs and payoff period will change.

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 would either save money each month or lower the total interest costs of your loan.

If you don’t qualify for refinancing — whether you have poor or little credit — or you won’t get an interest rate lower than what you’re paying now, you may want to look at alternatives. For federal student loan borrowers, refinancing also means that you lose out on federal protections and benefits. For instance, if you ever need to pause payments, many private lenders don’t offer deferment or forbearance like federal student loans do. If you refinance your federal loans, you'll also lose the ability to sign up for an income-driven repayment plan.

Should you refinance student loans during COVID-19?

The global pandemic has brought on a host of financial issues for people across the world. However, refinancing rates have plummeted during the recession, allowing many Americans to secure lower interest rates than what they were paying before. Refinancing right now might be a good idea if:

  • You’re financially secure. Millions of Americans have lost their jobs or face reduced hours. 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 Sept. 30, 2021, which suspends payments and interest rates. If you refinance those loans, you lose access to this benefit.

  • 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 to refinance your student loans

If you’re ready to start refinancing your loans, you’ll need to take a few steps first.

1. Review your credit history

Before applying, check your credit report, which you can do for free through once a month through April 2021. Check to see if you have any negative marks and if they are actually yours. You can report fraud or remove negative marks by contacting the major credit bureaus: Equifax, Experian and TransUnion. Use this time to build up your credit score as much as possible. If you have old debt, try to pay it off or catch up as much as you can. The higher your credit score, the easier it will be to qualify for refinancing and the lower your potential interest rate will be.

2. Shop around

Once you have a solid credit score, review refinancing rates from many different lenders. Some offer fixed and variable interest rates, giving you the flexibility to choose the one that works best for you. It’s important to compare many different lenders to see which one offers the best deal. Review interest rates, repayment terms, potential fees and programs for borrowers. Many lenders offer prequalification, which asks for basic financial details in exchange for your estimated rate and terms — all without a hard credit check.

3. Choose a lender and complete an application

After you’ve prequalified for refinancing your student loans with a few different lenders, it’s time to make the choice. As you complete an application with your chosen lender, you'll need a few personal details, like:
  • Proof of employment.
  • Driver’s license or another form of ID.
  • Loan information.
If you don’t qualify for refinancing on your own, you may need the help of a co-signer. A co-signer can help you qualify for a student loan refinancing if you can't by yourself. They can also help you secure a lower interest rate if they have good or excellent credit.

4. Pay off your old loans

If you're approved for your loan, you should receive funds within a few weeks. This lump sum payment will be used to pay off your old student loans, and you will immediately begin making payments on your new loan with your new interest rate and terms.