Refinance Student Loans

Apply for student loans refinancing online, including options for bad credit. Compare rates and find optimal solutions for your educational needs. Secure the funds you need for your education without delays.
Offers: 5
Updated:
29.02.2024
12:13
SoFi
Private Student Loans
Rating by Finanso®
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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
from $1,000
Rate
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Effective interest rate on the product

up to 11.66%
Term
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Loan term for the financial product

up to 15 years
Sallie Mae
Student loan
Rating by Finanso®
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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
up to $15,000
Rate
i

Effective interest rate on the product

up to 12.85%
Term
i

Loan term for the financial product

up to 15 years
Apply
Navient
Private Student Loans
Rating by Finanso®
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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
from $5,000
Rate
i

Effective interest rate on the product

from 5.8%
Term
i

Loan term for the financial product

up to 30 years
Apply
LendKey
Private Student Loans
Rating by Finanso®
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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
from $2,000
Rate
i

Effective interest rate on the product

from 4.89%
Term
i

Loan term for the financial product

up to 15 years
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Nelnet
Private Student Loans
Rating by Finanso®
i

The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

Recommended FinScore™
0
300
650
1000
up to $57,500
Rate
i

Effective interest rate on the product

from 4.49%
Term
i

Loan term for the financial product

up to 25 years
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Reviews
CreditFresh
4.8
The application process was a breeze, and I received a response within minutes. This straightforward and prompt procedure proved to be a great help to me during a crucial time of need.
Review
JG Wentworth
4.6
The assistance I received was exceptional. My representative handled my case with care and provided all the necessary information...
Review
OneMain Financial
4.4
The loan application process was straightforward, and the representative I interacted with displayed patience, provided informative answers, and was quite pleasant throughout...
Review
My Funding Choices
4.6
The process was swift and straightforward, which was particularly helpful during a time when, despite my reluctance to seek assistance, I genuinely needed help.
Review
Plain Green Loans
2
The interest rate is shockingly high, and it feels like taking advantage of individuals facing financial challenges when unexpected expenses arise...
Review
Advance America
4.6
I have never encountered any issues with this company. They consistently deliver funds on time, and the repayment process is straightforward...
Review

What is a Student Loan Refinancing?

Student loan refinancing is the process of obtaining a new loan, often from private lenders, to replace existing student loans, whether federal or private. This allows borrowers to potentially secure more favorable terms such as lower interest rates, fixed rates, and improved monthly payments. Refinancing student loans is a strategic financial move that can help individuals manage their student loan debt more effectively, potentially saving money over the life of the new loan.

Features

  1. Federal Student Loans. Borrowers can choose to refinance both private and federal loans, providing flexibility in managing various types of educational debt.

  2. Student Loan Refinance Rates. Federal and private student loan refinancing offers the opportunity to secure more favorable interest rates, including fixed interest rates that remain constant over the loan term, or variable interest rates that may fluctuate.

  3. Fixed Interest Rate. Refinancing allows borrowers to opt for a fixed interest rate, providing stability with consistent student loan payments.

  4. Variable Rate Loan. Alternatively, borrowers may choose a variable interest rate, which can change based on market conditions, potentially resulting in lower initial ratesю

Pros and Cons

Pros

Refinance Loans. With student loan refinancing, borrowers have the opportunity to replace existing loans with a new one, potentially obtaining more favorable terms.

Streamlined Payments. Refinancing private student loans allows borrowers to streamline their payments by consolidating multiple loans into a single, more manageable loan.

Grouped Payments. Multiple loans can be grouped together, simplifying the repayment process and reducing the hassle of managing various lenders and due dates.

Cons

Eligibility Constraints. Not every borrower is eligible for refinancing, and eligibility criteria may vary among lenders, potentially limiting access to this option for some individuals.

Credit Score Impact. The borrower's credit score plays a crucial role in determining the new annual percentage rate after refinancing. A lower credit score may result in a less favorable rate.

Limited Interest Rate Reduction. While refinancing offers the potential for a lower interest rate, it's not guaranteed that borrowers will secure a significantly reduced rate. The extent of the interest rate reduction may vary based on individual circumstances.

How to Refinance a Student Loan

  1. Research Lenders. Look for student loan refinancing companies that meet your specific needs. Consider factors such as international student loan refinancing or eligibility without a degree.

  2. Collect Interest Rate Offers. Gather multiple interest rate offers from different student loan refinance lenders. Prequalify by submitting basic information, ensuring it does not impact your credit score. Aim to find the lowest interest rate available.

  3. Choose Lender and Loan Terms. Understand the interest rate (fixed or variable rates) and repayment terms. These factors influence your monthly payment and total cost.

  4. Complete Application. Review and understand the loan offer. Formally apply by completing the application provided by the chosen lender.

Requirements and Conditions

Requirements

  1. Strong Credit Score. Lenders typically require a strong credit score to qualify for student loan refinancing. A higher credit score demonstrates your creditworthiness and financial responsibility.

  2. Stable Income. Demonstrating a stable and sufficient income is crucial. Lenders want assurance that you have the financial capacity to repay the refinanced loan.

  3. Decent Debt-to-Income Ratio. Maintaining a reasonable debt-to-income ratio is important. This ratio compares your monthly debt payments to your gross monthly income and helps lenders assess your ability to manage additional debt.

  4. Degree. Many lenders require borrowers to have completed a degree as part of their eligibility criteria for student loan refinancing. The type of degree may vary among lenders.

  5. Potential Co-signer. If you don't meet the credit or income requirements on your own, some lenders may allow the use of a co-signer. A co-signer is someone with a stronger financial profile who agrees to share the responsibility of repaying the loan.

Conditions

  1. Interest Rates. The average student loan interest rate is 5.8% among all households with student debt. This rate encompasses both federal and private student loans, with about 90% of all student debt being federal. For borrowers with a 5.8% interest rate on $30,000 of student loans, the interest paid over 10 years would amount to about $9,600.

  2. Varied Interest Rates. The average student loan interest rate may differ among various groups. For example, it is 6.3% among households where the borrower didn't complete a college degree and 6.6% among households with incomes less than $24,000.

  3. Weighted Average Interest Rate. If a borrower has multiple student loans with different rates, the weighted average interest rate is the rate they'll have if they consolidate the loans through the federal government. Federal consolidation won't lower the average interest rate, but refinancing with a private lender could potentially result in a lower rate.

  4. Refinancing with Private Lender. Refinancing with a private lender is an option to consider, as it may provide the opportunity to obtain a lower interest rate compared to the weighted average rate from federal consolidation.

  5. Loan Amount and Term. The conditions for refinancing, including the loan amount and repayment term, will vary among lenders. Borrowers can typically choose the loan amount and term that best aligns with their financial goals.

Best Places to Refinance Student Loans

  1. Ascent is a known student loan refinance company for offering both cosigned and non-cosigned student loan options. They consider factors beyond credit scores, such as future earning potential and academic history.

  2. Sallie Mae is a well-established private online lender. They offer various student loan products, including refinancing options with competitive interest rates.

  3. College Ave provides student loan refinancing with customizable loan terms and competitive interest rates. Borrowers have the flexibility to choose the repayment plan that best suits their financial situation.

  4. Custom Choice, offered by Citizens Bank, provides student loan refinancing options. Borrowers may benefit from competitive interest rates and various repayment terms.

Things to Pay Attention to

  1. Interest Rates. Understand the interest rates offered for refinancing federal loans, as well as private loans, and compare them to your existing rates.

  2. Federal Loans Eligibility. Evaluate if you are eligible to refinance federal loans and consider the implications, as federal loans offer certain benefits like income-driven repayment plans and potential student loan forgiveness.

  3. Minimum Credit Score. Be aware of the impact of your credit score on the refinancing process. Lenders often have minimum credit score requirements that may influence your ability to secure favorable student loan refinancing rates.

  4. Repayment Terms. Review the available repayment terms, including fixed rate loan options with consistent monthly payments or variable rate loans subject to market fluctuations. Choose the terms that align with your financial goals.

  5. Lenders and Options. Explore multiple refinancing lenders to find the best student loan refinancing company for your needs. Consider online lenders, credit unions, and traditional banks, comparing their offerings.

  6. Costs and Savings. Assess the potential savings and costs associated with refinancing. Calculate the overall impact on your finances, including lower monthly payments and the total amount paid over the life of the loan.

How to Repay a Refinanced Loan?

  1. Review Loan Terms. Understand the terms of your refinanced loan, including the interest rate, repayment period, and any specific conditions set by the lender.

  2. Set Up Automatic Payments. Consider setting up automatic payments to ensure timely and consistent repayments. Many lenders offer discounts for borrowers who opt for automatic payments.

  3. Budgeting. Create a budget that allocates funds for your monthly loan payments. This helps you manage your finances and ensures you have the necessary funds available.

  4. Take Advantage of Benefits. Explore any benefits offered by the lender, such as interest rate reductions for on-time payments or opportunities to save on interest through early repayment.

  5. Monitor Your Finances. Regularly monitor your financial situation, making adjustments as needed. If possible, allocate extra funds toward your loan to pay it off faster and potentially save on interest.

Reasons for Getting Rejected for a Student Loan Refinancing

  1. Credit History. A poor credit history, including a low credit score or recent delinquencies, can be a significant factor leading to rejection.

  2. Credit Report. Negative entries on the credit report, such as bankruptcies or defaults, can impact a borrower's creditworthiness.

  3. Income. Insufficient income or unstable employment may raise concerns for lenders about the borrower's ability to repay the refinance loan.

  4. Debt-to-Income Ratio. A high debt-to-income ratio, where the borrower's existing debt is significant compared to their income, can be a red flag for lenders.

  5. Ineligibility for Federal Benefits. Refinancing federal loans may lead to the loss of federal benefits such as income-driven repayment plans and public service loan forgiveness, making some borrowers ineligible.

Alternatives

  1. Student Loan Consolidation. Federal Direct Consolidation Loan allows borrowers to combine multiple loans into a single loan. While it won't lower the interest rate, it may simplify repayment by providing a single monthly payment.

  2. Income-Driven Repayment Plans. Federal student loan borrowers can opt for income-driven repayment plans, such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE). These plans adjust monthly payments based on income and family size.

  3. Loan Forgiveness Programs for Specific Professions. Some professions, such as teachers, nurses, and public servants, may qualify for loan forgiveness programs specific to their field. While federal loan forgiveness programs are more common, some private lenders may offer similar programs.

Editorial Opinion

Student loan refinancing is a financial strategy that offers both advantages and considerations for borrowers. On the positive side, refinancing federal student loans can potentially result in lower monthly payments, especially for those securing more favorable interest rates. Private lenders, including online lenders, provide a range of options for student loan refinancing, allowing borrowers to choose terms that align with their financial goals. However, it's crucial for individuals to carefully weigh the decision, as refinancing federal loans may lead to the loss of certain benefits, such as income-driven repayment plans and public service loan forgiveness. Moreover, eligibility criteria, credit history, and market conditions play pivotal roles in determining the success of a refinancing application. While refinancing can be a valuable tool to save money and simplify payments, borrowers should conduct thorough research and consider their unique circumstances before opting for this financial strategy.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Lender

  1. Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.

  2. Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.

  3. Carefully review all the terms and conditions of your payday loan contract.

  4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

  5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

  6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Methodology

At Finanso, we've carried out a comprehensive analysis of over 100 lenders, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.

In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.

At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.

Our ultimate goal is to provide insightful recommendations and expert advice to assist you in selecting a lender that best caters to your specific needs.

Other Personal Loans

FAQ

Can I refinance federal student loans?

Yes, it is possible to refinance federal student loans. However, it's essential to note that refinancing federal loans with a private loan lender means losing certain federal benefits, such as income-driven repayment plans and potential loan forgiveness. Borrowers should carefully weigh the advantages and disadvantages before refinancing federal loans.

What factors should I consider before refinancing my student loans?

Before refinancing, consider factors such as your credit score, financial stability, and the current interest rates. Additionally, assess whether you are willing to forgo federal benefits associated with your existing loans. It's crucial to research and compare offers from multiple lenders to find the best student loan refinance terms for your specific situation.

How does student loan refinancing impact my credit score?

The act of applying for student loan refinancing may result in a temporary decrease in your credit score due to the credit inquiry. However, successfully refinancing and making timely payments on the new loan can positively impact your credit over time.