How To Refinance Navient Student Loans
Updated On September 13, 2022
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If you want to know how to refinance Navient student loans, the good news is that you have several options.
Navient, which spun off from Sallie Mae, is one of the largest student loan servicers for millions of student loan borrowers. While Navient no longer services federal student loans on behalf of the U.S. Department of Education, Navient still services private student loans. If Navient is your student loan servicer, Navient collects your student loan payments and manages customer service for your student loans.
Some borrowers decide to keep their student loans with Navient until they pay off student loan debt. However, other borrowers decide to consolidate Navient student loans or refinance Navient student loans. Which option is best for you?
Whether you choose to refinance Navient student loans or consolidate Navient student loans depends on whether you have federal student loans or private student loans. Let’s examine each option and determine which option is best for you.
Top Picks For Student Loan Refinancing
In this complete guide to refinance Navient student loans, you will learn:
- How to consolidate your Navient loans
- How to refinance Navient student loans
- Why you should refinance Navient student loans
- When student loan refinancing isn't right for you
- Should you refinance your Navient loans?
How To Consolidate Your Navient Loans
The first option is to consolidate Navient student loans. Student loan consolidation is available only for federal student loans. When you consolidate student loans, you combine your existing federal student loans into a new Direct Consolidation Loan. A Direct Consolidation loan has one monthly payment and one student loan servicer.
The interest rate for a Direct Consolidation Loan is equal to a weighted average of your current interest rates on your federal student loans, rounded up to the nearest 1/8 %. Therefore, student loan consolidation does not lower your interest rate, and may even slightly increase your interest rate. It’s important to note that private student loans are not eligible for student loan consolidation with the federal government. However, private student loans are great candidates are student loan refinancing.
How To Refinance Navient Student Loans
The second option is to refinance Navient student loans. While student loan consolidation is only for federal student loans, you can refinance student loans with a private lender. For example, you could refinance with NaviRefi, which is part of Navient, or with a different lender such as SoFi. Student loan refinancing is the process of exchanging your existing student loans for a new student loan with a lower interest rate. When you refinance student loans, you combine your existing student loans into a single student loan with one monthly payment and student loan servicer.
Student loan refinancing also simplifies your student loan repayment, since you only have to make one payment each month. The top reason to refinance student loans is to lower your interest rate, save money and pay off student loans faster.
You can use this student loan refinancing calculator to determine how much money you can save when you refinance student loans.
If you want to know how to refinance Navient student loans, the process is simple and can be completed online. Lenders will evaluate your credit profile, income, debt-to-income ratio and other factors to ensure that you are a responsible borrower. Typically, lenders prefer to refinance student loans for borrowers who have at least a credit score of 650, current employment or a written job offer, stable and recurring income, and a low debt-to-income ratio, among other factors. If you do not meet these qualifications, you can apply with a qualified co-signer.
Why You Should Refinance Navient Student Loans
There are several reasons why you should refinance Navient student loans. The main reasons are to:
The main reason to refinance Navient student loans is to save money. With a lower interest rate, you can save significant money on your student loans and pay off student loans faster. You can compare the best student loan refinancing rates online. For example, let’s assume you have $70,000 of student loans at a 7% interest rate and a 10-year repayment term. Now, let’s assume you can refinance student loans at a 3.5% interest rate and a 10-year repayment term. With student loan refinancing, you could save $121each month and save $14,467total.
Change Your Loan Terms
Student loan refinancing also helps you change your loan terms. If you refinance Navient student loans, you can choose either a new fixed interest rate or variable interest rate. You would only refinance Navient student loans if you can get a lower interest rate. You can keep refinancing your student loans because there is no limit to how often you refinance student loans. Since there are no origination fees or prepayment penalties, you can refinance student loans each time you find a lower interest rate.
When you refinance student loans, you can also choose a new student loan repayment term, which typically ranges from 5 to 20 years. A shorter repayment period (such as 5 years) has a higher monthly payment, but it will save you money since you will pay less interest. In contrast, a longer repayment period (such as 20 years) will have a lower monthly payment, but ultimately cost you more in interest payments. You should choose the repayment period that best fits your personal financial situation and goals.
Change your lender or student loan servicer
When you refinance student loans, you can change your student loan servicer. For example, if you’re unhappy with your current student loan servicer, student loan refinancing helps you get a new student loan servicer that can deliver better customer service.
When Student Loan Refinancing Isn't Right For You
Whether you should refinance Navient student loans depends if you have federal student loans or private student loans.
If you have private student loans, and can find a lower interest rate, student loan refinancing is a good way to save money and simplify student loan repayment. When you refinance private student loans, there is no impact to student loan forgiveness or income-driven repayment plans, for example, because those are benefits for federal student loans only.
If you have federal student loans, you should balance the potential cost savings from student loan refinancing with the loss of federal benefits such as income-driven repayment plans and student loan forgiveness programs. For example, if you plan to enroll in the Public Service Loan Forgiveness program, you must keep your federal student loans outstanding and should not refinance federal student loans. However, you can still refinance private student loans. If you feel confident in your earning potential and ability to repay student loans, then student loan refinancing for both federal and private student loans is a smart tool. However, if you plan to use income-driven repayment or certain federal student loan forgiveness programs, refinancing private student loans only may be a better option.
Should You Refinance Your Navient Loans?
When it comes to whether you should consolidate Navient student loans or refinance Navient student loans, make sure you understand your options. Consolidation helps you simplify your federal student loan payments and keep your federal student loans, but it will not lower your interest rate.In contrast, with student loan refinancing, you can lower your interest rate, save money and pay off student loans more quickly. Remember, there are at least three good reasons to refinance student loans:
- you can get a lower interest rate,
- you can get a lower monthly payment, or
- you can change loan terms.
If you choose to refinance Navient student loans, make sure you have at least one of these reasons.