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Student Loan Refinancing Guide: Introduction

This student loan refinancing guide covers the key aspects of how to refinance student loans and save money in the process. Student loan help comes in many shapes and sizes – student loan refinance, student loan consolidation, student loan forgiveness and the more nebulous cousins, student loan deferment and student loan forbearance.

Today, we’re going to look closely at student loan refinance (and explain how you can potentially save more money with student loan refinance over student loan consolidation).

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What is Student Loan Refinance?

The goal of this student loan refinance guide is to get you a better deal on your student loans so you can pay them faster and save money as you do it. Student loan refinance is also about getting you a lower interest rate based on your financial profile, and not just the same fixed interest rate that the government offers regardless of your financial profile.

• Lower payment. Lower your monthly student loan payments
• Lower interest rate. Get a lower interest rate
• Change loan term. Shorten or extend your student loan term
• Fixed vs Variable. Switch from a fixed interest rate to a variable interest rate, or vice versa
• Simplify payments. Simplify your monthly student loan payment with a single student loan repayment

You can use the Mentor Student Loan Refinancing Calculator to calculate your potential savings when you refinance your student loans.

Sounds great, right? You are probably asking yourself a few questions:

• Why can I save so much money with student loan refinance?
• What’s the difference between student loan consolidation and student loan refinance?
• What is the eligibility criteria?
• Am I a good candidate to refinance student loans?
• Who are the best student loan lenders with whom to refinance student loans?

Many people have never heard of student loan refinancing and did not realize it was even an option. That’s why we put together this Student Loan Refinance Guide to help you understand the basics, navigate your options, answer key questions, provide the facts, and help you through the student loan refinance process.

Student Loan Refinance vs Student Loan Consolidation?

Well first, there is a difference between student loan consolidation and student loan refinance.
Student loan consolidation, specifically direct loan consolidation, is offered by the federal government, and applies only to federal student loans. As the name suggests, student loan consolidation means you just combine your existing federal student loans into a single student loan. The interest rate on your new consolidated student loan is simply a weighted average of the interest rates on your existing student loans.

Student loan refinance, or private student loan consolidation is both a consolidation (combining of existing loans) and a new student loan with a lower interest rate. A private lender can give you a new student loan, pay off your existing student loan, allow you to refinance both federal student loans and private student loans into a single student loan. Plus, your new student loan interest rate will be based several factors, which may include your credit score, track record of financial responsibility, income, and ability to manage debt payments.

Since the federal government does not refinance student loans, you can think of student loan refinancing as a form of private student loan consolidation – meaning that you refinance with a private student loan company, rather than the federal government, with the primary goal to save money and lower your monthly payments. Many private student loan companies will refinance, though, both your federal and private student loans. When you refinance your student loan, your new lender pays off your existing student loan and issues you a new private student loan. The goal is to lower your overall interest rate so you can save money on student loan interest costs.

Unlike a federal government loan in which each and every borrower receives the same interest rate, private student loans are credit-based, which means that your credit history, income, and/or credit score may impact the interest rate on your new loan. Private student loan companies use different underwriting models to determine qualifications and interest rates.

But you can expect that the stronger your financial profile and demonstrated financial responsibility, the lower your interest rate will be. The good news is that some private student loan companies enable you to have a co-signer (such as a family member), who will assume financial responsibility for your student loan and can help you obtain approval for your student loan application based on their financial profile.

Why Refinance Student Loans?

The primary reason to refinance student loans is the potential to receive a lower interest rate than your existing student loan. Federal student loans may have interest rates as high as 6.8% on an undergraduate student loan, and even higher for a graduate PLUS loan. You may have other private student loans at even higher interest rates that you borrowed while you were a student. Now that you have graduated and have an income and established work history, private student loan lenders are likely to offer you a lower interest rate than these types of student loans.

One downside of refinancing student loans is that you lose federal student loan protections such as income-driven repayment options, Perkins Loan cancellation, and public service loan forgiveness, and teacher student loan forgiveness, student loan deferment and student forbearance programs, among others. So if you think you will need these benefits, then you should check for eligibility to see if you qualify before refinancing student loans. However, if saving money on your student loans is your top priority, then student loan refinance may be your best option.

Income-Driven Repayment Plans

Federal student loans offer benefits that are not offered by private student loan companies such as income-driven repayment plans, which allow the borrower to make student loan payments based on income. For example, a graduated student loan repayment plan enables the borrower to make low monthly payments at the beginning of the student loan repayment period and increase the student loan payments over time as the borrower’s income increases. Other income-driven repayment programs for borrowers with high debt-to-income ratios allow the borrower to make small monthly student loan payments, and then any remaining principal can be forgiveness after 20 or 25 years.

These income-driven repayment plans can be beneficial to lower your monthly student loan payments and provide flexibility, particularly if you have a lower income in the beginning of your career. The downside is that with a lower student loan payment, interest still accrues, or accumulates, on the principal balance. So, even though the monthly student loan payment is lower, you actually end up paying more for your student loans because of the interest costs.

Student Loan Forgiveness

While this student loan refinance guide focuses on student loan refinancing, federal student loans can offer student loan forgiveness benefits as Public Service Loan Forgiveness and Teacher Student Loan Forgiveness for borrowers who work in qualifying roles in these professions. If you work in either of these professions, you may want to check whether these benefits apply to you before your refinance student loans.

Student Loan Deferment and Student Loan Forbearance

Most federal student loans allow you to postpone making student loan payments due to financial hardship. The most common benefits are student loan deferment (during which student loan interest does not accrue) and student loan forbearance (during which student loan interest does accrue). Most private student loan companies do not offer student loan forbearance but do offer some form of student loan deferment, including monthly payment postponement and help finding a new job if you lose your current job. You can check out our student loan company reviews to learn more.

Where Can I Refinance Student Loans?

You can learn more about student loan companies who can offer fixed and variable student loan interest rates. You can compare student loan rates, loan terms, qualification criteria and more.

You can also use this student loan refinancing calculator to calculate how much money you can save when you refinance student loans.

Plus, if you sign up for autopay, you can earn a 0.25% discount on your student loan interest rate, which adds up to big savings over the course of your student loan.

Flexible Student Loan Repayment Terms

Private lenders offer borrowers multiple options for student loan repayment, with terms ranging typically from 5 to 20 years. You also will have an opportunity to choose between fixed and variable interest rates. If you want to pay off student loans and get out of debt as quickly as possible, then you will want to choose a shorter-term option (such as 5 years or 10 years).

While you will save on student loan interest costs (compared with a 20-year student loan, for example), your monthly interest costs will be relatively higher than with a longer term student loan option. However, you may be able to save money depending on how much money you save with your new student loan interest rate.

Summary Comparison: Direct Consolidation Loan vs. Student Loan Refinance

We often get the question: Which is better – direct federal student loan consolidation or student loan refinancing? Each have their benefits…

Private lenders offer borrowers multiple options for student loan repayment, with terms ranging typically from 5 to 20 years. You also will have an opportunity to choose between fixed and variable interest rates. If you want to pay off student loans and get out of debt as quickly as possible, then you will want to choose a shorter-term option (such as 5 years or 10 years).

While you will save on student loan interest costs (compared with a 20-year student loan, for example), your monthly interest costs will be relatively higher than with a longer term student loan option. However, you may be able to save money depending on how much money you save with your new student loan interest rate.

Am I A Good Candidate To Refinance My Student Loans?

When you first borrowed your student loans, you may have had both a federal student loan and a private student loan. Your federal student loan is likely at the same high rate as everyone else’s, since the federal government offers the same fixed rate to all borrowers. If you have a private student loan, it likely is a variable rate loan with a high interest rate. This is because when you borrowed that loan, you were in school and you may have had a limited credit history, which meant that your student loan company deemed you a higher credit risk.

Now, you may have graduated, become employed, and developed a stronger credit history. As a result, you may be able to qualify to consolidate and refinance your existing federal student loans and private student loans into a new private loan with a lower interest rate.

If your goal is to obtain a lower interest rate, lower your monthly payments, switch from a variable interest rate to a fixed interest rate (or vice versa), or change the loan term to a longer to shorter number of years to repay your loan, then you may be a good candidate to refinance student loans.

Do Federal Student Loans Offer the Lowest Interest Rates?

This is a major misconception. Particularly for graduate school and professional school such as business school, medical school, dental school, law school, pharmacy school and other programs, you can get a much lower interest rate by refinancing student loans with a private student loan company.

Why? Interest rates are near an all-time low, so private student loan companies are able to offer lower student loan interest rates than the federal government. Most graduate school loans through the federal government, for example, are comprised of Federal Direct Unsubsidized Loans and Direct PLUS Loans. could have an interest rate with the federal government. These loans can cost almost 6% and 7%, respectively. In addition, a PLUS loan borrower will have to pay a 4.292% origination fee. Even as interest rates have declined (e.g., the 10 Year Treasury Rate has declined from 5% to less than 2% over the last 10 years, Graduate PLUS Student Loans have stayed relatively constant at 6.8%. That’s great news for the federal government as the lender, but not so great for you as the borrower.

Further, the federal government does not “underwrite” student loans based on the individual borrower. Rather, each borrower gets the same interest rate – regardless of your income, financial profile, or credit score. If you score high in these categories, then you are essentially overpaying for your student loan and may be able to obtain a lower student loan interest rate through a private student loan company. This is why student loan refinance with private student loan companies has become such a popular solution for student loan debt payment.

Can I Combine My Federal Student Loans and Private Student Loans When I Refinance?

Yes, you can combine federal and private student loans with certain student loan companies when you refinance student loans. You also may be able to refinance student loans that you previously consolidated with the federal government through the U.S. Department of Education (e.g., Direct or FFEL) or a private student loan company.

Double check with your lender when you refinance your student loans to make sure. Also, when you refinance your federal student loans, you lose most flexible student loan repayment plans and other protections connected with a federal student loan. That said, some student loan companies offer flexible student loan repayment plans, including student loan deferment and student loan forbearance.

Again, you should check with your new prospective student loan company and be sure to ask the new student loan company the differences between your new, refinanced student loan and your existing federal student loan.

What Will My Monthly Payments Look Like?

Hopefully lower than what you are currently paying! You are in the driver seat – so you should consider a student loan that fits your personal and financial needs. Your monthly payment is primarily a feature of your interest rate, loan term and loan amount.

• Fixed Interest Rate. If you have a fixed interest rate, your monthly student loan payment will remain constant each month for the duration of your loan.
• Variable Interest Rate. If you have a variable student loan payment, your monthly loan payment may change each month based on the underlying benchmark such as 1 Month LIBOR.
• Shorter-Term Loan. If you have a shorter-term student loan (e.g., 10 years or less), your monthly payments may be higher than if you have a longer-term loan (more than 10 years) because you have a shorter period to pay off the loan.
• Longer-Term Loan. The longer the term of your loan (e.g., the number of years to pay back your loan), the more interest that will accrue over time and the more interest you will owe.

So, you should decide how much you can afford to pay now versus over time and find the loan product that works best for your personal and financial needs. And remember – most student loan companies offer up to 0.25% discount off your interest rate if you sign up for auto pay. The autopay savings can really add up.

What Happens To Your Student Loan Interest Rate With Student Loan Consolidation?

This is the biggest different between student loan consolidation and student loan refinancing. When you refinance student loans you are hoping to get a lower interest rate or better overall terms for your student loan repayment. However, with a Federal Direct Loan consolidation, your interest rate will be calculated based on the weighted average of the interest rates on the loans being consolidated.

While most federal student loans are eligible for student loan consolidation – private loans are not. Also worth remembering – if you’re a parent with Parent PLUS loan, you cannot transfer that Parent PLUS loan to the student (now graduate) when he or she consolidates.

Do I Qualify For Student Loan Refinance?

To qualify for student loan refinancing, you usually need to show a few things. First you need to have graduated from a qualified degree program or university, which is typically a Title IV accredited school. Second, you need to have a steady stream of income and third, you need a history of making timely payments. There are many different lenders and student loan companies in the market place offering student loan refinancing. Each student loan company has different criteria for eligibility.

Typically, eligibility criteria to refinance student loans include:

• Strong monthly cash flow
• Healthy credit
• Demonstrated financial responsibility
• Currently employed or have written job offer
• Degree from Title IV accredited university or degree program

Of course, eligibility criteria vary by student loan company, but this should give you a general framework. The stronger your financial metrics – for example, credit score, income, historical financial responsibility, current outstanding debt – the lower student loan interest rate you may be able to obtain.

Student Loan Refinance Process

Now that you have made the decision to refinance your student loans, it is time to understand the student loan refinancing process. Over the past five years, the process to refinance student loans has been simplified considerably. Gone are the days of piles of paperwork, long wait times, and bureaucracy.

So, what does the student loan refinance process look like?

1. Easy Application Process

• All the student loan refinance applications are online and you receive a student loan interest rate offer typically within 2 minutes
• The total student loan refinance application may take less than 15 minutes to complete
• Co-signers and parents can also apply online as well

2. Select Your Loan

• You can choose a fixed or variable student loan interest rate
• You can choose your loan term and decide how fast you want to pay off your student loan

3. Submit Your Loan Documentation

• You can submit your documentation online
• Some lenders will allow you to take a photo of your documents, or even submit via text
• Key documents include your:
  • Driver’s license or passport (or government issued ID)
  • Transcripts / Diploma to verify your degree
  • Payoff statement from your current lender (if refinancing)
  • Monthly rent amount or mortgage payments
  • Two most recent pay stubs or tax returns (or offer letter of employment)

4. Lender Underwriting Review

• The lender will review your submitted documents and credit report
• The lender will apply its proprietary credit model to ensure that you meet all its underwriting criteria

5. You’re Approved!

6. Review Disclosures & Sign Loan Documentation

• Review truth in lending and other disclosure statements
• Sign your student loan documentation

7. Your Student Loan Is Disbursed

• If you refinance, your lender will issue you a new student loan and directly pay off your existing student loan from your existing lender
• If you borrow a new student loan, your lender will send the funds directly to your school

Top 10 Must Haves From Your Student Loan Company When You Refinance Student Loans

When you refinance student loans, here are the Top 10 must haves you should look for:

1. Lower interest rate
2. Flexible loan terms
3. Significant savings compared to existing student loans
4. Fixed and variable interest rates
5. Dedicated and available customer service
6. Ability to refinance federal and private student loans
7. Online application
8. Forbearance options in case of economic hardship
9. Autopay discount
10. Other benefits

I Am Interested In Student Loan Refinance – How Do I Sign Up?​

While it used to be a cumbersome process that involved mountains of paperwork and hours of your time, now in just two minutes, you could learn what your new student loan interest rate could be. To learn more about student loan refinance options, you can read our student loan reviews and check out The Best Lenders To Refinance and Consolidate Student Loans.

Compare rates and pay off student loans faster​

While it used to be a cumbersome process that involved mountains of paperwork and hours of your time, now in just two minutes, you could learn what your new student loan interest rate could be. To learn more about student loan refinance options, you can read our student loan reviews and check out The Best Lenders To Refinance and Consolidate Student Loans.

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When it comes to student loan refinancing, you may be wondering which companies are the top lenders to refinance student loans. We evaluated lenders based on multiple factors, including reputation, customer service, interest rates, fees, repayment options, flexibility, and other considerations.

With student loan refinancing, you can refinance federal student loans, private student loans or both. When you refinance student loans, you exchange your current student loans for a new, single student loan with a lower interest rate. The goal of student loan refinancing is to save money and pay off student loans faster.

What are the best student loan refinance options?

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Here are our picks for the top lenders to refinance student loans:

• SoFi
• Earnest
• ISL
• LendKey
• Laurel Road
• ELFI
• Splash
• Student Loan Refinancing: FAQ

SoFi

SoFi is one of the top lenders to refinance student loans.

As one of the best student loan consolidation companies, SoFi has some of the lowest student loan refinance rates in the industry. With SoFi, you can refinance both federal and private student loans.

In addition, parents with Parent PLUS Loans can also refinance Parent PLUS Loans with SoFi.

Earnest

Earnest is one of the best companies to refinance student loans. As one of the best student loan consolidation companies, Earnest differentiates itself by allowing you to choose your own student loan interest rate and student loan repayment term. This lender also offers industry-leading repayment flexibility on your student loans. For example, you can skip a student loan payment and make it up later. With Earnest, you can choose your exact minimum monthly payment and increase your payment anytime to pay off student loans faster.

Earnest has no application fees or origination fees. You can refinance and consolidate multiple federal and private student loans into a new, single student loan.

Earnest looks beyond credit score to approve you for student loan refinancing, and will incorporate savings, education and earnings potential. Parents can also refinance Parent PLUS Loans with Earnest.

ISL

ISL is a non-profit lender and was formerly known as Iowa Student Loans. This lender refinances student loans, Parent PLUS Loans, medical student loans, dental student loans, and other undergraduate and graduate student loans. Founded in 1979, ISL also refinances student loans for medical residents and dental residents. ISL also refinances student loans while you’re in school.

Medical residents and dental residents can pay $75 a month if they refinance student loans during residency. Based in Iowa, ISL is also one of the few lenders that will refinance your student loans while you’re in school. That means that you can get a lower interest rate while you’re a student or if you left school and didn’t earn a degree.

The good news is that ISL doesn’t require you to be employed to qualify for student loan refinancing and there is no minimum income. With this lender, you can also get a cosigner release after 24 months as well as forbearance and deferment.

LendKey

LendKey compares offers from nearly 300 community banks and credit unions to find you the best student loan refinance rates. This lender has no fees and enables you to refinance both federal and private student loans, including both undergraduate and graduate student loans.

One benefit of LendKey is that the company offers one of the longest unemployment protection periods of all student loan refinance companies. LendKey enables you to pause payments for up to 18 months if you become unemployed.

Here’s another benefit when you refinance with LendKey. If you repay 10% of your student loan by the time your loan enters the full repayment period, LendKey will drop 1.0% APR from your current interest rate.

Laurel Road

Laurel Road is a bank that offers student loan refinancing and Parent PLUS Loan refinancing, including for both undergraduate and graduate school loans.

The benefit of Laurel Road is no fees and the opportunity to refinance both federal and private student loans. If you are a parent and want to refinance student loans that you borrowed for your child’s college, this lender permits parents to refinance Parent PLUS Loans in their child’s name.

With this lender, you may be able to pause their student loan payments for one or more three-month periods (up to 12 months) through a forbearance if they face economic hardship.

ELFI

ELFI is one of the top lenders to refinance student loans, and it’s backed by the SouthEast Bank. Based in Tennessee, ELFI has no fees and enables you to refinance and consolidate both federal and private student loans, including both undergraduate graduate student loans. If you are a parent and want to refinance student loans that you borrowed for your child’s college, ELFI offers Parent PLUS Loan refinancing and refinancing for private loans.

ELFI allows you to pause your loan payments for up to 12 months if you face financial hardship or permanent disability. ELFI is a transparent lender who lists all rates, terms and monthly payments prominently on its website so you know exactly what you would pay with ELFI student loan refinancing.

Splash

Splash is a new lender that works with banks and credit unions to refinance student loans. This lender has competitive rates and offers free student loan refinancing for federal and private student loans, including both undergraduate and graduate student loans. Parents with Parent PLUS Loans can also refinance Parent PLUS Loans with Splash.

Student loan refinancing is the process of lowering the interest rate on your student loans. You can exchange your existing federal student loans, private student loans or both to receive a new student loan with a lower interest rate. There are many potential benefits when you refinance student loans, including saving money by having a lower interest rate. With student loan refinancing, you have flexibility to decide your student loan repayment term. You can pay off student loans in a shorter time period with a higher monthly payment, or you can choose a lower monthly payment and pay off student loans over a longer time period.

Student loan refinancing is empowering because it helps you take control of your student loans and decide your financial future. You can choose a new lender, choose a repayment term, select a fixed or variable interest rate, consolidate your federal student loans and private loan debt into one monthly payment, and simplify your student loan repayment with only one student loan servicer.

This student loan refinancing calculator can help calculate how much money you can save when you refinance student loans.

How do you get approved for student loan refinancing? Lenders prefer borrowers with a strong credit score (at least in the mid 600’s and preferably in the 700’s), stable and recurring income and a low debt-to-income ratio. If you don’t meet these requirements, you can always apply with a qualified co-signer, who can help you get approved and even get a lower interest rate.

One benefit of student loan refinancing is the ability to check your interest rate for free within minutes before you apply. This is called a soft credit check. You can do this with multiple lenders to determine which lender offers the lowest interest rate. The lender will do a soft credit check to determine your interest rate, and this has no impact on your credit score.

Remember, when you refinance student loans, your new student loan will be a private student loan. This means that you no longer will have federal student loan if you choose to refinance federal student loans. When you refinance student loans, you won’t have access to income-driven repayment plans or federal programs such as public service loan forgiveness or teacher loan forgiveness.

If you think these programs are beneficial to you, you could refinance private student loan debt and keep your federal student loans outstanding. You could consolidate federal student loans into a Direct Consolidation Loan. The benefit is to organize all your federal student loans into a single student loan. The downside is that a Direct Consolidation does not lower your interest rate, so you won’t save any money. The choice is yours, but if you want to lower your interest rate and save money, then student loan refinancing may be your best option.

Student Loan Refinancing: FAQ

What is student loan refinancing?

Student loan refinancing is the process of receiving a lower interest rate on a new student loan and using your new loan to pay off your existing student loans. When you refinance student loans, a lender will both refinance and consolidate your student loans into a new, single student loan. This new loan will have one monthly payment, one student loan servicer and one interest rate. Not only can you save money with student loan refinancing, but also student loan refinancing helps you manage your debt with one monthly payment.

Student loan refinancing has many advantages:

• Lower your interest rate
• Save money
• Pay off student loans faster
• Change your loan terms
• Combine multiple student loans into a single student loan
• Change lenders and student loan servicers for better customer service
• Remove a co-signer from your student loans

You can check and compare the latest student loan refinancing rates to determine how much money you can save.

When should I refinance my student loans?

When to refinance student loans depends on several factors. For example, you should refinance whenever you can get a lower interest rate compared to your current interest rate.

Here’s an example of how student loan refinancing can help save you money. For example, let’s assume you have $50,000 of student loans at an 8% interest rate and a 10-year repayment term. If you can refinance your student loans and receive a 3% interest rate and a 10-year repayment term, you would save $124 per month and $14,860 total.

This student loan refinancing calculator shows you how much money you can save when you refinance student loans.

Here are some examples when to refinance student loans. You should refinance student loans if you have:

• student loans have high interest rates
• good credit and recurring monthly income
• private student loans
• an interest in changing your student loan terms
• a need to change your lender or student loan servicer
• a variable interest rate
• the opportunity to save money

You may not want to refinance student loans if you:

• expect to apply for student loan forgiveness
• are unemployed or underemployed
• plan to enroll in an income-driven repayment plan
• defaulted on your student loans

How Do I Refinance My Student Loans?

You can refinancefederal stud ent loans, private student loans or both. There is no limit to the number of times that you can refinance student loans so you can refinance each time you find a lower rate.

You can apply online to refinance student loans with banks, online lenders and credit unions. You should compare the best rates for student loan refinancing, and you can check your interest rate for free with as many lenders as possible. The process takes about two minutes and there is no impact to credit score. When you are ready to apply, lenders will check your credit with a hard credit pull. The application takes about 10-15 minutes, and you can apply to multiple lenders at once to increase your chances of approval. The good news is that there are no fees to refinance student loans, and when you apply to multiple lenders in a short time period (such as a week), credit bureaus only count it as one credit inquiry.

How Do I Get Approved For Student Loan Refinancing?

When lenders refinance student loans, they want borrowers who have:

You can apply online to refinance student loans with banks, online lenders and credit unions. Make sure to compare the best rates for student loan refinancing. You can check your interest rate for free with as many lenders as possible. The process takes about two minutes and there is no impact to credit score.

• Good Credit: Lenders prefer to refinance student loans for borrowers who have at least a 650 credit score. Preferably, your credit score is in the 700’s or higher.

• Good Income: Most lenders may require that you graduated and earned a degree before you refinance student loans. Most lenders expect that you are currently employed or have a written job offer. You will also need stable and recurring income.

• Low Debt-To-Income: Lenders want to ensure you can repay your refinanced student loan, living expenses and other debt payments.

If you have bad credit, lower income or don’t meet these qualifications, you can apply with a creditworthy cosigner.

What’s the Difference Between Student Loan Refinancing and Student Loan Consolidation?

Student loan refinancing. Student loan refinancing is done with a private lender, while federal student loan consolidation is done with the federal government. The federal government does not refinance student loans. So, the best choice for student loan refinancing is to refinance with a private lender.

Student loan refinancing is the process of receiving a new student loan with a lower interest rate. The goal is to save money, pay off student loans faster and get out of debt more quickly. You can refinance federal student loans, private student loans or both.

Federal student loan consolidation. Federal student loan consolidation is the process of combining all your federal student loans into a Direct Consolidation Loan. With student loan consolidation, you will have one federal student loan, one interest rate and a lower monthly payment. You can still refinance private student loans if you choose to consolidate federal student loans into a Direct Consolidation Loan. The downside of a Direct Consolidation Loan is that you won’t receive a lower interest rate. To receive a lower interest rate, student loan refinancing is your best option.

This consolidation vs. refinancing calculator shows you how much money you can save with student loan refinancing.

How Often Can You Refinance Student Loans?

There is no limit to how often you can refinance student loans. Student loans do not have any origination fees or a prepayment penalty. Why is this important? Without a prepayment penalty, you can pay off your student loans any time with no fees. Any time you find a lower interest rate, you could refinance student loans to save money without paying any fees.

There are many reasons why you should refinance student loans again:

• Get a lower interest rate
• Change your loan terms
• Change lenders and student loan servicers
• Release a co-signer

Why Should I Refinance My Student Loans?

The main reason to refinance student loans is to get a lower interest rate. A lower interest rate means you can save money on your student loans. Why? This means you can pay off student loans faster and get out of debt more quickly.

There are several reasons why you should refinance student loans:

1. Get a lower interest rate
2. Save money
3. Pay off student loans faster
4. Change loan terms
5. Simplify student loan repayment
6. Change lender or student loan servicer

How Much Does It Cost to Refinance Student Loans?

There are no fees to refinance student loans. That means that there are no application fees, origination fees or prepayment fees. Some lenders may charge late fees if you make a late student loan payment.

Compare top lenders to refinance student loans

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