When you refinance student loans, you combine your existing student loans into a new, single student loan with a lower interest rate, lower monthly payment or both. Your new student loan is used to pay off your old student loans. With student loan refinancing, you can choose new student loan repayment terms to save money each month or to pay off debt more quickly.

There are many advantages to student loan refinancing, including:

Yes, you can refinance your student loans while you are a medical or dental resident and during your fellowship.

There are several reasons why you should refinance student loans:

Plus, residents and fellows are only required to make a minimum monthly student loan payment of $100 until the end of their residency or fellowship program.

With student loan refinancing, your resulting student loan will be a private student loan with a private lender. Therefore, if you refinance your federal student loans, you would no longer have access to benefits such as public service loan forgiveness, forbearance, deferment, or an income-driven repayment plan, for example. If these benefits are essential to you, then you may want to refinance your private student loans only. However, if you don’t need these federal programs, then student loan refinancing for both your federal and private student loans can be an effective strategy for student loan repayment.

Student loan refinancing is available for both federal and private student loans, including undergraduate and graduate student loans from a Title IV-accredited college or university in the U.S. This also includes PLUS Loans for graduate school as well as Parent Loans and Parent PLUS Loans.

You are a good candidate for student loan refinancing during residency or a fellowship if you meet the following criteria:

Before you refinance your student loans, most lenders let you check your estimated new rate before you submit a full application. This is called a soft credit check, and there is no impact to your credit score.

If you like your new rate, you can submit an application to refinance your student loans. At that time, a lender will pull your credit. This is called a hard credit check, and your credit score is impacted by a few points. You can apply to multiple lenders within a short time frame such as a week, and it will only count as a single credit inquiry. When you make on-time payments on your new loan, you can increase your credit score over time. This is because on-time payments comprise 35% of your FICO score, whereas applying for any new loan counts as 10%.

Student loan refinancing is combining your existing federal and/or private student loans into a new, single student loan with a lower interest rate. With student loan refinancing, you work with a private lender and can choose a fixed or variable interest rate as well as a student loan repayment term of 5-20 years.

Student loan consolidation is combining your existing federal student loans into a new loan called a Direct Consolidation Loan through the U.S.  Department of Education. Student loan consolidation won’ lower your interest rate, however. Rather, with student loan consolidation, your interest rate is equal to a weighted average of the interest rates on your current federal student loan debt, rounded up to the nearest 1/8%.

To get the lowest student loan refinancing rate, make sure to compare lenders. Most lenders reserve the lowest student loan refinancing rates for borrowers with strong credit and income as well as a lower debt-to-income ratio. Variable interest rates tend to be lower than fixed interest rates, so you may be able to save money with a variable interest rate student loan. To save interest, you can also choose a shorter student loan repayment term. Typically, a shorter student loan repayment period such as 5 years will have a lower interest rate than a longer student loan repayment period such as 20 years.

When you refinance student loans, you can choose between a fixed and variable interest rate. A fixed interest rate means that the interest rate on your student loan will never change for the duration of your student loan. A variable interest rate means that the interest rate on your student loan can change over time based on movements in prevailing interest rates.

A fixed interest rate will provide you with more certainty and predictability because you will have the same interest rate every month. Since the interest rate on a variable interest student loan can change, you may have a higher or lower monthly payment over time. Typically, the starting interest rate on variable rate loans are lower than on fixed rate loans.