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Best Nursing School Loan Refinance Options of 2022

Brenda Williams

Refinancing your nursing school loan could save you money by lowering your interest rate, and help you pay off your debt faster. We’ve evaluated the best refinancing options based on rates, terms, process, fees, and overall quality.

No application, origination, or prepayment fees

640

Min. Credit Score

2.49% - 11.72%

Variable APR

2.59% - 8.49%

Fixed APR

Overview

Splash Financial partners with various banks and lenders to offer a competitive interest rate.

What we like

  • Quick online application process
  • Competitive interest rates
  • Easily compare lenders
  • Personalized customer support

What we don't

  • Terms and conditions differ by lenders
  • No options for deferment

Easy online application process

660

Min. Credit Score

2.81% - 7.21%

Variable APR

3.99% - 10.68%

Fixed APR

Overview

LendKey streamlined the digital application process to save you time and effort by comparing competitive rates from a smaller bank or credit union.

What we like

  • Competitive rates from smaller institutions
  • Streamlined application and repayment process
  • Longer forbearance periods
  • Cosigners are not required

What we don't

  • No full in-school deferment
  • Only a credit-based application available

Competitve rates with credit union membership

660

Min. Credit Score

N/A

Variable APR

3.30% - 7.15%

Fixed APR

Overview

First Tech Federal Credit Union provides competitive rates, but you'll require a membership to receive those benefits. To become a member, you'll have to meet some strict requirements.

What we like

  • Low refinancing rates
  • Flexible loan terms
  • Payment protection with DebtSafe
  • No application and orgination fees

What we don't

  • No temporary forberance option
  • No co-signer release
  • Parent PLUS loans can't be refinanced
  • Credit union membership required

Temporary forbearance available

650

Min. Credit Score

2.06% - 14.04%

Variable APR

3.47% - 13.05%

Fixed APR

Overview

SoFi provides an easy online application process, so you can receive a rate estimate in minutes without a hard credit check.

What we like

  • No prepayment fees, no origination fees, no late fees
  • Flexible repayment options
  • Exclusive membership perks
  • Borrow up to the total cost of attendance
  • Unemployment protection

What we don't

  • No borrowing below $5,000
  • Application process can take 4 - 6 weeks

UNDERGRADUATE LOANS: Fixed rates from 3.47% to 12.55% annual percentage rate ("APR") (with autopay), variable rates from 2.26% to 13.54 % APR (with autopay). GRADUATE LOANS: Fixed rates from 4.60% to 12.55% APR (with autopay), variable rates from 2.96% to 13.54% APR (with autopay). PARENT LOANS: Fixed rates from 4.48% to 13.05% APR (with autopay), variable rates from 2.06% to 14.04% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 06/08/2022.

Should you refinance a nursing school loan?

Here are some reasons why you might want to refinance your nursing school loan:

  • You can change your terms: If your current rate is high and variable, consider refinancing to a fixed rate with a lower monthly payment and no fees. If your current interest rate is low but not fixed, you should also consider refinancing to lock in a lower rate. This can help your finances in the long-term.
  • Can pay back your loans faster: If you can refinance to a lower interest rate, you’ll be able to pay off your loan faster. The interest you pay on the loan will be much less, so it won’t take as long to pay off the loan. This means you will have a lower monthly payment, which will also reduce the stress and anxiety of having student debt.
  • Eligibility for a lower rate: If you’re paying a high-interest rate on your student loan, refinancing it could save you a lot of money in the long run. Many people don’t know they have refinancing options, but it’s worth checking to see if you’re eligible.
  • You can refinance private and federal loans together: Many people are surprised to learn that they can refinance both federal and private student loans simultaneously. This is not always the case, so it’s important to understand your loan type before moving forward with any refinancing plan.
  • Improved finances since you obtained your loan: If you’ve improved your finances since obtaining your student loan (i.e. job promotion), then consider refinancing because there’s a good chance that your credit score has improved as well. If this is the case, refinancing may allow you to qualify for better rates and terms than when you originally took out the loan.

How to refinance a nursing school loan

If you would like to refinance your current nursing school loan, consider the following steps:

  • First decide if refinancing is right for you: Before you look into refinancing your loan, figure out whether it’s a good fit. It might be worth exploring this option if you have a high income and are looking to save money on interest payments. But if you’re simply trying to reduce the length of your repayment term, refinancing may not be worth the time or effort.
  • Discuss options with several lenders: Once you’ve decided to refinance your student loan, research different lenders and their offers. You’ll want to compare interest rates and fees across multiple lenders and their eligibility requirements and repayment terms.
  • Gather documentation: Before applying for a refinance loan, gather all the information that the lender will need from you. This includes copies of your tax returns (and W-2s) from the past two years, documents supporting your income, and your employment status (i.e. pay stubs). The more documentation you can provide upfront, the better off you will be when applying for a refinance loan.
  • Submit your loan application: After gathering all the required paperwork, submit your application online or over the phone with a representative from the lender of your choice. Once submitted, it typically takes 2-7 days for a lender to process an application and make an offer on refinancing a nursing school loan.

How much can you save when refinancing a nursing school loan?

If you’ve got a high-interest nursing school loan, refinancing is an option that can help you save thousands of dollars over the life of the loan.

Here is an example:

  • Loan amount: $250,000
  • Months remaining: 120
  • Interest rate: 5%
  • Monthly payment: $2,652
  • Lifetime costs: $318,197

Based on the above scenario, if you refinance at a 3% rate, your monthly payments will drop to $2,414 and your lifetime cost will drop to $289,682. In this case, you’ll save $238 a month and roughly $28,515 over the life of the loan.

Will refinancing hurt your credit score?

The short answer is that refinancing a student loan will not hurt your credit score. However, it is important to understand the risks and benefits if you are considering refinancing any debt.

In general, lenders care more about whether you make your payments than they do about the size of those payments. As long as you have a history of on-time payments, it’s unlikely that refinancing will negatively impact your credit score.

However, there are some scenarios where refinancing could hurt your credit score such as:

  • If the new lender requires a co-signer, and the co-signer defaults on their payments. This would negatively impact both of your credit reports.
  • If you have other late or missed payments on your record, refinancing could cause those negative items to fall off your report sooner than expected. This can be good for someone with only one late payment but not so much for someone who already has several late or missed payments on their report.
  • If you refinance into more debt than what you currently owe, your monthly payment amount goes up significantly (i.e. from a $150/month down payment to $500/month). This can make it look like you’re overextending your debt capacity. 

Nursing school student loan refinancing vs. consolidation

Nursing school is an expensive investment, and the cost of student loans can be even more so given the added interest. Refinancing or consolidation are two of the most common ways to lower your monthly payments and save money on interest. In addition to the federal government, many private lenders offer student loans. Depending on their needs, nursing school borrowers can choose between various repayment options and interest rates.

The following are the differences between refinancing and consolidation:

  • Refinancing is your best option to save money: Many borrowers choose to refinance their student loans to reduce their monthly payments. Refinancing is a good option if you have good credit, have already consolidated your loans with another lender, and want to take advantage of lower interest rates on the market today.
  • Consolidation is your best option for maintaining federal loan benefits: Some borrowers want to keep their federal benefits when they consolidate their private loans into one new loan with a different lender. Consolidation allows them to keep the same repayment terms (i.e. an income-driven repayment plan). This can be an important consideration if you return to school or start an income-driven repayment plan after graduation.

Other nursing loan repayment options

Here are some of the most common repayment options:

  • Nurse Corps Loan Repayment Program: The Nurse Corps Loan Repayment Program awards up to $50,000 annually for two years (up to $100,000 total) to repay a qualifying student loan. Nurses currently employed and have been in their jobs for at least two years can apply for the program.
  • Public Service Loan Forgiveness (PSLF): Public Service Loan Forgiveness (PSLF) is a federal program that allows certain public servants to have their federal student loans forgiven after working full-time for 10 years in a qualifying employment. Eligibility requirements include working in any public service job, including nursing.
  • State student loan repayment assistance programs: State governments are often the biggest providers of public funding for higher education, so it’s no surprise they have programs to help residents pay back their student loans. These can vary from state to state, but generally they include a mix of grant and loan repayment assistance programs.
  • Income-driven repayment plans: Income-driven repayment plans can lower monthly payments significantly and extend the time it takes for your debt to be forgiven. Contact your loan servicer if you’re unsure which plan is right for you. They can help determine whether an income-driven plan is right for you based on your income, family size, and other factors.

How to choose the best nursing school loan refinancing option

Here are some tips to keep in mind when seeking the best nursing school loan refinancing option for you:

  • Shop around: When looking for a lender or other financial institution, it is important to shop around before making any decisions. There are many different lenders, and each has its own interest rates and payment plan policies. Comparing these options is best before deciding on one particular lender.
  • Flexible payment plans: While most nursing schools require students to complete their degrees within four years, some people do not finish their studies within that time frame. If you need an extended period to graduate from nursing school, consider working with a lender that offers flexible payment plans. These allow students to pay off their debts over a period of time without having it affect their credit score. 
  • Customer experience: A helpful and supportive agency will ensure you feel comfortable and supported throughout the process of refinancing your nursing school loan. Work with an agency that takes the time to answer your questions and reduces your concerns. This will be beneficial to you in the long run.
  • Eligibility requirements: You also need to check whether you meet your chosen option’s eligibility requirements. Some lenders only offer their services to those who have already graduated with a bachelor’s degree, while others will provide support even if you are still in college.