When you refinance student loans, you’re taking out a new private student loan to replace your existing student loans.
It can be super confusing to know what the best option is to refinance or consolidate your student loan debt. There are so many different lenders and banks – along with just as many programs – that it can be overwhelming.
Before we begin, it’s important to understand the key differences:
- Student Loan Refinancing – Getting a new private student loan to replace your existing loan and/or loans.
- Student Loan Consolidation – Combining multiple Federal loans into one loan.
With all the student loan refinancing companies we’re going to discuss, you can refinance and/or consolidate. You can also do some of your loans or all your loans.
Also, refinancing student loans might not make sense for everyone. In general, you shouldn’t refinance federal student loans unless you can afford paying your loans on the standard 10 year plan. But, if you can afford, refinancing can make a lot of sense financially, especially if you have a high credit score.
With that in mind, let’s dive into the best student loan refinance companies and options!
Excellent Places To Refinance Student Loans
Student Loan Refinancing Rates: The refinancing rates below are updated daily. The lowest rates are usually for shorter loan-terms, variable rates, those with high credit scores, and low debt-to-income ratios.
1. Citizens Bank
Citizens Bank is one of the few banks on this list. We like them because they offer a lot of great loan options, backed by the stability of a bank.
Here are a few of the highlights:
- 5-, 7-, 10-, 15- and 20- year repayment term options
- Fixed and variable rate loans options
- No application, origination, or disbursement fees
- Interest rate discounts available through loyalty programs
Furthermore, Citizens Bank has a release program where a co-signer may be removed from loan responsibility after making 36 consecutive, on-time principal and interest payments.
Lastly, there is a $10,000 minimum loan amount so this might not work for a borrower with a low loan balance.
2. College Ave
College Ave offers both private student loans and student loan refinancing. Their private student loans allow some interesting repayment options, such as an interest-only payment, a deferred payment, and a fixed rate payment. And existing borrowers can refinance a loan as low as $5,000 or as much as $300,000 depending on their degree type.
3. Earnest
Earnest is on this list because it’s one of the most flexible student loan refinancing companies – they offer the ability to pick any monthly payment and term between 5 to 20 years – saving you more than standard rates and terms.
They also give you the ability to change your loan – you can refinance your loan for free, change payment dates, even skip a payment once a year and make it up later.
Earnest has no set income requirements for borrowers. They are also fee-free, and offer unemployment protection to pause your monthly payments if you lose your job. Also, Earnest is one of the few lenders that will allow you to refinance even if you didn’t finish your bachelor’s or associate degree (assuming you meet their other lending criteria).
4. ELFI
Whether you’re trying to refinance existing student loans at low interest rates, or you’re a parent looking to refinance a Parent PLUS Loan into your child’s name, ELFI is one of the best lenders out there.
The ELFI loan minimum is $10,000 for refinancers, with the maximum being your outstanding loan balance. This can be a huge win for borrowers with high student loan debt, especially doctors.
ELFI doesn’t have specific credit minimums posted, but they do require borrowers to be creditworthy (or have a creditworthy cosigner). One of the few downsides of ELFI, however, is that it’s one of the few lenders on this list that does not offer a cosigner release program.
ELFI is offering an awesome bonus to our readers:
- A $599 bonus when you refinance at least $100,000 in student loans!
- A $500 bonus when you refinance less than $100,000 but at least $50,000 in student loans!
5. LendKey
LendKey is a student loan refinancing lender that pools money from community banks and credit unions to offer well-priced student loans to borrowers.
LendKey offers loans between $5,000 and $300,000, depending on the degree earned by the loan holder. For example, the lowest amount is for undergraduate degrees, which caps at $125,000. LendKey recently changed to only offer fixed-rate student loans.
LendKey bases its rates upon your credit and discounts are given for auto-pay. They also have no origination or prepayment fees. One thing to note: LendKey does not allow refinancing for borrowers who didn’t graduate.
If you’re considering LendKey, you can get a $300 bonus for refinancing loans under $150,000, and a $750 bonus if you refinance loans over $150,000
6. MEFA
MEFA is a non-profit lender (also known as Massachusetts Educational Financing Authority). MEFA offers simple fixed interest rate student loan refinancing.
MEFA is one of the few lenders that will allow you to refinance your student loans while you’re still in school. They also offer a graduated student loan repayment plan on your loans.
Of course, they also don’t charge any origination fees or have prepayment penalties (if you’re looking to pay off your loans early).
MEFA is on the Credible marketplace, which means that you can get up to a $1,000 gift card bonus if your loan is approved and funded.
7. SoFi
SoFi is another of the original student loan refinancing lenders – and probably the most well known. They offer a wide variety of fixed rate and variable rate loans, with 5, 7, 10, 15, 20 year repayment terms. SoFi even offers mortgages.
SoFi loans have no origination fees or prepayment penalties. SoFi also offers unemployment protection for borrowers and even has a career support program.
To get the best rates, you have to have excellent credit or you’ll have to have a cosigner for your loan. SoFi does have a cosigner release program.
8. Splash Financial
Splash Financial is a marketplace filled with banks and credit unions looking to help people refinance their student loans.
Splash Financial offers student loans with no original fees and unique repayment options. For example, they’re one of the few lenders that allow spouses to refinance together.
They offer loans between $5,000 and no maximum. They also have some of the most competitive rates for qualified borrowers. Repayment term options and available borrower protections will vary depending on the specific lender that you choose from the Splash Financial marketplace.
The great thing about Splash Financial is that they offer one of the best bonuses currently available! You can get a $500 bonus if you refinance at least $50,000.
9. Student Choice
Student Choice is a platform that connects student loan borrowers with credit unions that offer student loan refinance loans. They work with a network of 225+ credit unions, and as a result, they can offer some of the lowest student loan rates on the market.
Student Choice offers loans up to $250,000, with the potential for very low APRs. When you start the process on their website, they’ll take your application and “shop” it to their network of credit unions, who will then make you a customized loan offer.
10. Yrefy
Yrefy is a unique platform that allows you to refinance private student loans that you may be delinquent or in default on. They offer low interest rates, don’t have minimum credit requirements, and are flexible for repayment.
The downside is that they do have a 5% origination fee, and their loans aren’t available in every state. They also will only refinance existing private student loans, not federal loans.
Best Student Loan Refinancing Rates
Student loan refinancing rates vary quite a bit. You’ll likely see a rate quoted, but that doesn’t necessarily mean you’ll qualify for the top rate.
To get the best rate, you typically have to have a credit score over 800, a great debt-to-income ratio, and looking to refinance a loan for a period of time of 3 years. Some other requirements may include signing up for autopay (direct debit), and taking out a variable rate loans.
Right now, the best student loan refinancing rates are 3.69% – 11.41% APR.
The Requirements To Refinance Student Loans
The requirements to refinance student loans are a bit different than when you took out your loans. For federal loans, you simply had to fill out the FAFSA. With some graduate school loans (such as medical school loans), you might have had to have a credit check beyond the FAFSA.
However, with private student loan refinancing, the requirements are more like getting a car loan or mortgage.
Lenders will typically look at:
If you don’t meet all of these requirements, you might need to get a cosigner for your loan. Read this full guide on how to get a student loan with no cosigner.
Credible does offer loans with no cosigner for qualifying candidates.
What Credit Score Do I Need To Refinance Student Loans?
There is no specific credit score that is required to refinance student loans – but most lenders want to see 600 or higher. However, the better your credit score, the better rate and terms you can qualify for.
To get the lowest advertised rates, most lenders will want to see a credit score about 750 or even 775.
Things To Consider When Refinancing
When you’re looking at the best banks and places to refinance student loans, there are quite a few considerations. Every bank or student loan lender has it’s unique perk or angle, and you have to take that into consideration when weighing your options.
However, in general, the big things to consider when refinancing your student loans include:
Is It A Good Idea To Refinance A Student Loan?
Refinancing your student loans can lead to lower interest rates, ultimately saving you money over the life of the loan. However, according to the U.S. Department of Education’s Federal Student Aid website, refinancing may lose you access to benefits you get with federal loans.
While there is no “right” or “wrong” loan type when it comes to your individual situation, we believe that most borrowers would benefit from a student loan refinance loan that is only 5-7 years. Borrowers should look for loans that have no origination fees, and if a cosigner is required, there should be an easy cosigner release process.
However, every person has different needs and a different situation. Think about your loan needs accordingly.
When Is The Best Time To Refinance Student Loans?
The best time to refinance your student loans is before you “need” to. What do I mean by this?
A lot of people wait until they can’t afford their debt, and then look for options to refinance.
If you’re considering student loan refinancing, your credit score plays a big role in whether you’ll qualify or not. If you start missing loan payments, your credit score will drop and you might not qualify (or you might need a cosigner).
So, there are two times when I think you should look at student loan refinancing:
- Immediately after graduation
- If the interest rate drops by 1% or more
Immediately after graduation is the best time to simply get everything in order. If you have multiple loans, you can refinance them into one. You can also refinance into a payment plan that might be more affordable.
Second, you should revisit your loans once a year. If the interest rate has dropped by more than 1%, it can save you a lot of money to refinance your loans. Just make sure that you’re not adding too much to the length of the loan when you do this.
How Student Loan Refinancing Is Different From Student Loan Consolidation
Student loan refinancing is different from student loan consolidation, but many people use the terms interchangeably and it can be confusing.
Student loan consolidation is a special program offered by the Department of Education to simply combine all your Federal student loans into a single Federal student loan. Student loan consolidation only applies to Federal student loans, and it’s a free program. Learn more about student loan consolidation here.
Student loan refinancing is the process of taking out a private loan to replace your other student loans. This term gets confused for consolidation because many people consolidate multiple private loans into one new loan. You can refinance both private and Federal loans, so that adds another level of confusion to the term.
If you have Federal loans, you typically want to consolidate. If you have private loans, you typically want to refinance.
Can You Refinance Private Loans?
So you can refinance other private loans you already have? Absolutely. Student loan refinancing originated by simply refinancing other private student loans. Think of it like refinancing your mortgage on your house.
If interest rates drop enough, you could save a lot of money by refinancing your loans.
Also, remember what we said earlier – if you can’t afford your private loan payment, you can’t simply call and get it changed. You need a new loan. That’s where student loan refinancing comes into play.
However, before you think you can refinance all the time, you need to make sure your loans allow it. Check to see if your private student loans have any type of prepayment penalties. Some loans don’t allow you to refinance for at least a year, and charge penalties if you attempt to do so.
Can You Refinance Federal Loans?
If you have Federal loans, you might be looking at your interest rate of 6.8% and wondering if student loan refinancing makes sense for you.
Yes, you can refinance your Federal student loans, but you should only do it in one specific scenario. We put together a step by step process that shows you when exactly you should consider refinancing your Federal student loans.
As always, remember that a private loan will now replace your Federal loans, so really make sure you read our guide.
What About Parent PLUS Loans?
Parent PLUS Loans are some of the worst student loans you can get. These loans are in the parent’s name, but were taken out on behalf of the student.
Refinancing a parent PLUS loan is one of the best ways that you can save money. Read our full guide to Parent PLUS Loans here.
What About Spousal Consolidation Loans?
Spousal consolidation loans take the cake as the worst type of student loan. This loan is even harder to deal with than PLUS Loans, and so bad, the government even stopped allowing them. If you’re stuck with a spousal consolidation loan, you need to find a lender that will work with you.
The only national lender we’ve seen that handles these is Splash Financial.
Can You Refinance Multiple Loans Together?
Yes, you can refinance multiple individual loans into one new loan. As we mentioned above, this is where some confusion arises because people mistake consolidating your loans with the process of Student Loan Consolidation.
If you have multiple private student loans, it can simplify things to have a single loan to make payments on. If you have Federal and private student loans, I don’t recommend combining them unless you’ve read our Federal student loan refinancing guide and are positive you’re never going to need the benefits of your Federal loans.
Can You Refinance More Than Once?
What happens if you refinance today, and next year interest rates drop again? Well, you can typically refinance again and again, as long as your student loan doesn’t have any type of prepayment penalty or prohibition.
Just remember too that your loan term will continue to expand out if you keep refinancing into new loans. Some lenders like Earnest offer very flexible repayment terms, but most stick to the standards of 10, 15, or 20 years.
Final Thoughts
Student loan refinancing isn’t for everyone. However, if you’re able to afford your loans on the standard 10-year repayment plan, and don’t plan to take advantage of any student loan forgiveness program, then you should strongly consider student loan refinancing.
These are the top student loan refinancing companies, and you’ll strongly benefit from comparing your options amongst these lenders. Also, make sure that you’re always paying attention to our list of the best student loan refinancing bonus offers.