What Does It Mean To Refinance Student Loans?

By Mentor Staff | Edited By Mentor Staff

Updated On October 29, 2021

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If you want to know how to refinance student loans, this guide will address the most common student loan refinancing questions and provide detailed answers.

In this student loan refinancing guide, we will discuss how to refinance student loans:

Top Picks For Student Loan Refinancing

December 2022

Variable APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Variable APR means that your interest rate can fluctuate over time, which can increase or decrease your monthly student loan payment. Typically, a variable-rate loan has a lower introductory rate than a fixed-loan rate loan. Variable APR includes a 0.25% discount when you enroll in autopay.
Fixed APR ?APR, or Annual Percentage Rate, is the price you pay to borrow money. Fixed APR means that your interest rate will always stay the same. Even if interest rates change, your interest rate or monthly payment will not. Fixed APR includes a 0.25% discount when you enroll in autopay.
APR
4.49% - 8.99%
4.49% - 8.99%
4.49% - 8.99%

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on SoFi's website

Overview

Variable APR:
4.49% - 8.99%
Fixed APR:
4.49% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
3.99% - 8.29%
4.39% - 8.99%
3.99% - 8.99%

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on Earnest's website

Overview

Variable APR:
3.99% - 8.29%
Fixed APR:
4.39% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
3.99% - 8.29%
4.39% - 8.99%
3.99% - 8.99%

View Details

on NaviRefi's website

Overview

Variable APR:
3.99% - 8.29%
Fixed APR:
4.39% - 8.99%
Minimum Credit Score:
650
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,001 ($10,001 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5-20 years
Borrower Residency:
All States except NV
Hardship Deferment:
Yes
Co-signer Option:
No
3.53% - 7.24%
4.48% - 7.29%
3.53% - 7.29%

View Details

on ELFI's website

Overview

Variable APR:
3.53% - 7.24%
Fixed APR:
4.48% - 7.29%
Minimum Credit Score:
680
Minimum Income:
$35,000
Fees:
None
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.50% - 8.65%
3.99% - 8.49%
2.50% - 8.65%

View Details

on Splash's website

Overview

Variable APR:
2.50% - 8.65%
Fixed APR:
3.99% - 8.49%
Minimum Credit Score:
640
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5 – 25 years
Borrower Residency:
All states
Hardship Deferment:
Varies
Co-signer Option:
No
5.09% - 11.67%
5.39% - 11.87%
5.09% - 11.87%

View Details

on Citizens' website

Overview

Variable APR:
5.09% - 11.67%
Fixed APR:
5.39% - 11.87%
Minimum Credit Score:
Not disclosed
Minimum Income:
$24,000
Fees:
No prepayment or origination fees
Minimum Loan Amount:
$10,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states
Hardship Deferment:
Yes
Co-signer Option:
Yes
2.50% - 6.80%
4.49% - 6.90%
2.50% - 6.90%

View Details

on Laurel Road's website

Overview

Variable APR:
2.50% - 6.80%
Fixed APR:
4.49% - 6.90%
Minimum Credit Score:
660
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All States
Hardship Deferment:
Yes
Co-signer Option:
Yes
3.27% - 6.87%
3.99% - 10.68%
3.27% - 10.68%

View Details

on LendKey's website

Overview

Variable APR:
3.27% - 6.87%
Fixed APR:
3.99% - 10.68%
Minimum Credit Score:
680
Minimum Income:
$24,000
Fees:
None
Minimum Loan Amount:
$5,000

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except ME, ND, NV, RI, WV
Hardship Deferment:
Yes
Co-signer Option:
Yes
-
3.94% - 9.08%
3.94% - 9.08%

View Details

on ISL's website

Overview

Variable APR:
-
Fixed APR:
3.94% - 9.08%
Minimum Credit Score:
670
Minimum Income:
None
Fees:
None
Minimum Loan Amount:
$5,000 ($10,000 in CA)

Details

Eligible Loans:
Private & Federal
Eligible Degrees:
Undergraduate & Graduate
Loan Terms:
5, 7, 10, 15, 20 years
Borrower Residency:
All states, except OR and ME
Hardship Deferment:
Yes
Co-signer Option:
Yes

What is student loan refinancing?

Student loan refinancing is the process of combining your federal student loans, private student loans or both into new, single student loan with a lower interest rate. When you refinance student loans, a private lender pays off your old student loans and gives you a new student loan. With student loan refinancing, you have one student loan, one monthly payment and one student loan servicer. The goal of student loan refinancing is to lower your interest rate, save money and pay off your student loans faster.

Is it a good idea to refinance student loans?

If your goal is to lower your interest rate and save money, then student loan refinancing tool is an excellent strategy to achieve your objectives. When you refinance student loans, your resulting loan is a private student loan and you will no longer have federal student loans, which have certain benefits such as forbearance, deferral, income-driven repayment plans. However, many private lenders who provide student loan refinancing now offer employment protection if you lose your job and need to pause your payments.

What credit score do I need to refinance student loans?

Typically, you (or your co-signer) need a minimum credit score at least in the mid-600’s. Ideally, you credit score is above 700. The higher your (or your co-signer’s) credit score, the better because you can increase your chances for approval and also receive a lower interest rate. You (or your co-signer) will also need sufficient income to cover your living expenses, student loan payments and any other debt payments.

What happens when you refinance student loans?

When you refinance student loans, a private lender pays off your old student loans and gives you a new, single student loan with a lower interest rate. You will make monthly student loan payments to this new lender. In addition to saving money with a lower interest rate, you will also have only one student loan, one interest rate, one monthly payment and student loan servicer.

What is the best way to refinance student loans?

The best to refinance student loans is to apply to multiple lenders online. You can compare interest rate, payment terms, and other benefit and features. Most borrowers choose the lender that offers them the lowest interest rate so they can save the most money. You can also look for features and benefits that match your circumstances and goals.

How do you apply for student loan refinancing?

If you want to know how to refinance student loans, applying for student loan refinancing is an easy process.

First, you can compare lenders, interest rates and loan terms. Second, you can get interest rate estimates from each lender online for free in 2 minutes with no impact to your credit score. Finally, you can apply online, and the application for a lender takes about 10-15 minutes to complete.

Which lender is best to refinance student loans?

Most borrowers prefer the lender that offers them the lowest interest rate so they can save the most money. You can compare lenders, interest rate and loan terms to find the best lender for you.

Compare lenders and the latest student loan refinancing rates

How do you get approved to refinance student loans?

To get approved for student loan refinancing, lenders prefer borrowers (or co-signers) with a strong credit profile, including a high credit score, stable and recurring monthly income, a low debt-to-income ratio and other factors. Lenders want to ensure that your (or your co-signer’s) income is sufficient to cover your living expenses, student loan payments and any other debt payments.

Why should you refinance student loans?

You should refinance student loans to lower your interest rate and save money on your student loans. With a lower interest rate, you can also pay off student loans faster and become debt-free sooner.

How much money can you save with student loan refinancing?

The amount of money you save on student loan refinancing depends on your student loan balance and your interest rate. You can save up to thousands of dollars, or even tens of thousands of dollars, on your student loans depending on your current student loan interest rate and new student loan interest rate once you refinance student loans.

Use this student loan refinancing calculator to calculate your savings.

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