What Are The Fees To Refinance Student Loans?
Updated On October 29, 2021
Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.
The fees to refinance student loans are $0. Here’s what you need to know.
Is There a Fee to Refinance Student Loans?
There are no fees to refinance student loans. That means student loan refinancing has:
No origination fees
There are no applications fees to apply for student loan refinancing. You can even check your interest rate for free in about two minutes before you apply. Once you apply, the online application only takes about 10-15 minutes.
No third party fees
Unlike mortgages, there are no appraisals or broker commissions that you have to pay.
No funding fees
Once you are approved for student loan refinancing, there are no fees to disburse your student loans.
No prepayment fees
Unlike most mortgages, there is no prepayment fee if you choose to pay off student loans early.
Top Picks For Student Loan Refinancing
Is Student Loan Refinancing Free?
While there are no fees, you are still responsible to pay interest each month. Interest is added to the principal balance that you borrowed. You also may be charged a late fee if you make a late payment. There are many reasons why to refinance student loans. The main reason that borrowers refinance student loans is to lower their interest rate, which can potentially save thousands of dollars.
For example, let’s assume that you have $100,000 of student loans at an 8% interest rate and a 10-year repayment term. If you can refinance student loans at a 2.70% interest rate, you could lower your monthly payment by $261 and save $31,375 total.
This student loan refinancing calculator can show you how much money you can save when you refinance student loans.
With student loan refinancing, you can choose loan terms that best match your financial situation. For example, you can choose a fixed interest rate or variable interest rate. You can also choose a shorter student repayment period such as five years or a longer student loan repayment such as 20 years. If you choose a shorter repayment period, your monthly payment will be higher, but you will also pay less total interest and save money. If you choose a longer student loan repayment period, your monthly payment will be lower, but you will pay more interest over time, which can increase the cost of your student loans.
You can easily compare the latest student loan refinancing rates, loan terms and fees.
How Much Does It Cost to Refinance Student Loans?
Even though there are no fees to refinance student loans, make sure it’s the right decision for you. The advantages of student loan refinancing are clear:
- Lower interest rate
- Save money
- Pay off student loans faster
- Ability to change loan terms
- Flexible student loan repayment
- Change student loan servicer
- Better customer service
When you refinance student loans, you no longer have any federal student loans. If you plan to apply for public service loan forgiveness, for example, or expect to choose an income-driven repayment plan, then you may not want to refinance federal student loans. Therefore, you should weigh the potential benefits of saving money with the potential cost of giving up access to certain federal programs.
You can also refinance private student loans and keep your federal student loans outstanding, if you plan to participate in any federal programs. Student loan refinancing is available for federal student loans, private student loans or both, including for undergraduate and graduate student loans.