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Student Loan Refinancing Guide

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Factors that determine if you should refinance

Refinancing can save you time and money, but it's not always the best route for every borrower. Here are a few factors that everyone should consider before making the jump to refinance a student loan.  

Rising interest rates 

Rapidly rising rates should be a primary consideration when determining the best time to refinance. Due to sky-high inflation, the Federal Reserve has been hiking rates at a historic level in an attempt to cool the economy. When the Federal Reserve hikes rates, private student loans are impacted and lenders raise their minimum and maximum rates in response. While rates are higher than usual at this time, borrowers looking to refinance private loans shouldn't wait for them to drop. No one can be certain on how the Fed will respond to the economy, but it's predicted that rates will continue to rise. 

If you've been thinking about refinancing your private loans for a while, now may be the time to do it. You'll lock in the lowest rate possible and can always refinance again in the future to score better terms. Just make sure you're applying for a fixed rate loan. Variable interest rates are subject to change based on the Fed and will likely only increase, while fixed rates don't change during the life of the loan. 

Loan type 

Borrowers who have high interest or variable-rate private student loans should consider refinancing as soon as possible due to the Federal Reserve raising interest rates in an attempt to combat inflation. Variable-rates fluctuate based on market activity, so it's best to lock in the lowest rate possible before another potential rate hike. 

With student loan forgiveness currently in limbo, those with federal student loans should re-consider refinancing until after the payment pause expires or a decision is made on Biden's debt relief plan. Payments are set to resume no later than 60 days after June 30, 2023. Refinancing before this date will cause you to forfeit the remainder of the pause – and any potential extensions in the future – as private lenders only provide company-specific benefits to borrowers. 

Federal loan benefits 

Those who refinance their federal loans lose out on all of the federal benefits and repayment programs, including loan forgiveness. Before refinancing, it's best to take a step back and examine every federal option, as most private lenders don't offer nearly as many hardship or payment relief programs. 

The U.S. Department of Education offers occupation and income-based forgiveness and repayment programs, like Public Service Loan Forgiveness and Income-Driven Repayment. Plus, borrowers can apply for financial hardship payment relief at any time. While most private lenders provide some relief programs, it's rare to see a company boast a portfolio of benefits comparable to the Education Department's offerings.  

Long-term goals 

If you have a mix of federal and private debt, assess your financial situation to determine whether refinancing is absolutely necessary before signing on the dotted line.  

Consider your current financial situation, loan balance and the resumption of student loan payments to gain a holistic view of what your refinancing goals are. If you're looking to save money on interest charges, make sure to apply for a lender only if you're guaranteed a lower rate through prequalification. 

If your credit is in good health but you're looking for a more manageable monthly payment, then refinancing may be your best bet if you don't qualify for any federal programs.

What refinancing could mean for you

Student loan refinancing can be a big help to your finances, but only in the right situation

Here's what refinancing could look like if you:

See how much you could save with refinancing

A student loan refinance calculator can help you parse through lenders to find the offer that'll save you the most money. After pre qualifying, you can enter in the predicted loan details and compare them with your current details to see how your new monthly payment, interest costs and repayment timeline could change. 

 

How to refinance your loans with Bankrate in 3 steps

1. Shop around
Shop around and explore multiple lenders to find the company that best suits your needs. Look specifically at the requirements, APR ranges and repayment terms.
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Most lenders require good credit and a steady income to qualify for the best rates. Consider using a co-signer to get better rates and improve your approval odds.
compare offers
2. Prequalify and compare offers
Prequalify for as many lenders as possible to find the most competitive rates for your situation.
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Prequalifying won't impact your credit score and allows you to see your predicted rates and approval odds. It likely won't be worth applying if the lender does't offer prequalification.
apply for loans
3. Lock in the better terms
After finding the lender with the best rates and benefits, lock in your predicted offer and apply on its website. If approved, the lender will contact you with further details.
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Have all of the personal and financial documents listed on the lender's website on-hand to ensure a smooth application process.

Ready to compare student loan refinancing options?

Comparing options and lenders can be an overwhelming process, as many companies offer similar services. It's best to focus on the details listed in the company's terms and conditions to factor in any hidden fees and rate increases. 

Thankfully, there are resources available that do all of the hard work for you by  listing out all the lender details; all you need to do is apply. Use our resource below to sift through the best lenders and find the company that'll help you reach your long-and short-term financial goals.

 
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Filters

Get student loan refinance offers

Answer a few questions in two minutes or less to see which student loans you pre-qualify for. It's free and will not impact your credit score.

4.0

Bankrate Score
Fixed APR From

4.47- 8.99%

with AutoPay
Loan Amount

$25k- $500k

Term: 5-25 yr
Min. Credit

660

Apply on partner site

4.1

Bankrate Score
Fixed APR From

3.99- 11.87%

with AutoPay
Loan Amount

$5k- $500k

Term: 5-20 yr
Min. Credit

660

Apply on partner site

4.0

Bankrate Score
Fixed APR From

4.49- 10.68%

with AutoPay
Loan Amount

$5k- $300k

Term: 5-20 yr
Min. Credit

660

Apply on partner site

4.5

Bankrate Score
Fixed APR From

4.47- 8.99%

with AutoPay
Loan Amount

$5k- $500k

Term: 5-20 yr
Min. Credit

680

Apply on partner site
Fixed APR From

4.39- 8.99%

with AutoPay
Loan Amount

$5k- $500k

Term: 5-20 yr
Min. Credit

680

Apply on partner site

4.0

Bankrate Score
Fixed APR From

5.39- 11.87%

with AutoPay
Loan Amount

$10k- $750k

Term: 5-20 yr
Min. Credit

620

Apply on partner site

4.2

Bankrate Score
Fixed APR From

4.83- 7.64%

Loan Amount

$10k- $500k

Term: 5-20 yr
Min. Credit

680

Apply on partner site