FROM OUR PARTNERS
Refinancing your student 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.
Splash Financial partners with various banks and lenders to offer a competitive interest rate.
LendKey streamlined the digital application process to save you time and effort by comparing competitive rates from a smaller bank or credit union.
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.
SoFi provides an easy online application process, so you can receive a rate estimate in minutes without a hard credit check.
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.
Refinancing student loans is feasible, if:
It is not mandatory to have perfect credit for refinancing purposes. Just check if you qualify for a better interest rate than your current interest rate.
Refinancing comes with several benefits—especially if you have a high balance.
Yes, you can. There is no limit on how many times you can refinance. You should consider doing it often if it helps you further save money on interest costs by choosing a new repayment term suiting your current financial situation.
Though private lenders decide the eligibility of student loan refinancing, here are the following factors that they typically consider:
If you don’t meet some of the above-mentioned criteria, you may consider applying with a creditworthy co-signer.
Just keep to note that every lender is different, so they all have various requirements – some are stricter than others.
Refinancing involves switching from one lender to another. Your current lender will lose all the interest going forward while your new lender will gain it.
The majority of the private lenders charge no upfront fees. Some lenders hide and roll the upfront fees into the loan’s interest rate resulting in an apparent “no-cost” loan, with a higher interest rate.
Some lenders also charge a small application fee.
Also, in some rare cases, you might be required to pay an origination fee, which is a one-time fee to cover the costs associated with processing the loan, after you agree to your new loan terms and conditions. This might be in the range of 5% of your loan, generally added to your loan balance.
Co-signer release is the process by which a co-signer can get off the hook of an existing loan, which means the co-signer is no longer responsible for the loan. Once a borrower proves to the lender they’re financially stable they qualify for the co-signer release.
Student loan refinancing is another way of availing a co-signer release. Your co-signer will be released once you refinance student loans into a new loan, as your old loans are paid off.
Not all lenders offer co-signer release.
It boils down to the preferences of the borrowers. Consolidation can be viewed as a strategic move while refinancing can be viewed as a measure to save money.
Keep to note, when you consolidate, you will do it through the Department of Education and maintain your federal benefits. When you refinance, you’ll do it through a private lender and lose federal benefits, but you’ll save money if you have a lower interest rate.
Parent PLUS Loans carry a higher interest rate, and these federal loans are non-transferable. The result is parents, as borrowers, have to bear the load by themselves, but there is a “fix” to this tricky situation.
The “fix” involves refinancing. Parent PLUS loans are eligible for refinancing, and these loans can be transferred to a child by refinancing them. A child should apply and get it approved as they would refinance their loans by a private lender.
But it’s important to note that all lenders do not provide this option.
Here are the factors worth considering while finding the right option for you: