Best Student Loan Refinance Companies

Maybe you’ve thought about refinancing your student loans to try and save money, but you don’t know where to start. That’s understandable because there is a broad landscape of companies and lenders that refinance student loans. With the right information and guide, figuring out how to refinance student loans doesn’t have to be daunting. It’s important to compare lenders to find the best student loan refinance lenders.

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The 5 best student loan refinancing of 2020

Provider Max Amount Repayment Period APR
Earnest $500,000 5 – 20 years 3.21% – 8.77% fixed
SoFi Full loan balance 5 – 20 years 3.20% – 6.44% fixed
CommonBond $500,000 5 – 20 years 4.25% – 6.24% hybrid
Splash Financial No max 5 – 25 years starts at 1.99%
Citizens Bank $500,000 5 – 20 years 4.72% – 12.04% fixed

Rates accurate as of May 2020

The 5 best student loan refinance companies of 2019

Earnest – Best for flexible payment terms

Earnest was founded in 2013 and strives to offer flexible and customizable plans to customers. It has served over 105,000 customers and refinancing comes with no origination fee. One of the standout features that Earnest offers is borrowers get the chance to skip a payment once every 12 months after they have made six consecutive months of payments.

It also offers military deferment and a rate reduction program, for borrowers who have come into financial difficulty. Interest rates can be modified for up to six months under this program. The application uses more than just credit scores and history to determine eligibility, such as savings accounts or a history of no late fees, making more people eligible for its loans. However, Earnest does require a minimum credit score of 650.

SoFi – Best for member perks

Sofi focuses on high earners for refinancing candidates. Choosing SoFi as your lender opens the door to many perks, such as career coaching, financial planning and exclusive member events. Events might include local happy hours, networking events or a financial workshop to develop your money smarts.

SoFi also focuses on customer service outside of just its financial tools, offering a wealth of educational resources for its borrowers, everything from blog posts to individual financial planning sessions. It takes a big picture approach to financial steps and aims to serve borrowers at different life stages.

Fixed rates from 3.20% APR to 6.44% APR (with AutoPay). Variable rates from 2.99% APR to 6.44% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.99% APR assumes current 1 month LIBOR rate of 0.18% plus 2.82% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. See eligibility details. 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. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.

CommonBond – Best for hybrid APRs

CommonBond offers borrowers the option of a variable, fixed or hybrid APR. This APR approach offers a fixed rate for part of the life of your loan and then switches to a variable rate, which could be appealing to many borrowers. This is unusual and an outstanding feature for a lender. Plus, you can get a 0.25% discount on your interest rate when you sign up for autopay. The website also features a handy Refi 101 Guide that comes with a short quiz and explains the basics of refinancing in a digestible manner.

Splash Financial – Best for med school students

Splash Financial claims a 95% satisfaction rate and offers to refinance specifically for med school students. Residents and medical fellowship students who refinance and fit the term have the option to pay just $100 a month during their residencies and fellowships, and for six months afterward. But the maximum length of time to pay $100 a month is 84 months. Both fixed and variable rates are offered with the lowest interest rate being 2.80%, which could make a big payment difference to someone in a long-term residency.

Citizens Bank – Best for parent loans

Citizen Bank offers a wide range of refinancing terms, from five to 20 years, and can help you refinance up to $500,000 in student loans. Specifically for parents, its Parent Education Refinance Loans can include any student loan debt used to finance a child’s education. Federal Direct PLUS loans and private student loans from other lenders are included in that. Loans that parents took out only in their name or that they co-signed on are also eligible. There are no application, origination or disbursement fees in the application process either, which might save you some money.

What is student loan refinancing?

Student loan refinancing is an option to change how and what you pay on your loans each month. Essentially, refinancing a student loan replaces your current loan with a new one, complete with a new payment amount, a new term length and hopefully a lower interest rate.

Refinancing may help you pay less in interest over the length of your loan term, have more manageable monthly payments or help you get a co-signer off of a loan.

How to refinance your student loans

Refinancing your student loans can be a smooth and straightforward process. Many lenders offer online applications, and processing can take just a few days. Here are the steps to follow if you want to refinance your student loans.

  1. Find at least lenders you are interested in refinancing with. It’s always a good idea to shop around to see what different lenders are able to offer you.
  2. Prepare the information you’ll need to apply. This includes checking your credit report for any errors and disputing them if so, knowing your credit score beforehand, knowing your total student loan balance and interest rates for each loan, and knowing your total monthly payment.
  3. Get estimates from the lenders you’ve chosen.You may have to fill out applications to get loan offers, or you may be able to get prequalified. Compare the offers and see which works best for you. A loan application generally asks for personal information like your address, income, current loan information, assets, and age of loans.
  4. Compare offers and choose one. When you’ve chosen the offer, you’ll sign a contract for the new terms of your debt. You’ll have to get the 10-day payoff amount from your original lender and submit it to your new lender. There is a three-day period called the recission period, where you or the lender can pull out of the agreement. Until this is completed and the loan officially approved, you need to continue to make payments to your original lender.
  5. You have successfully refinanced. The new lender pays off your debt to your original lender, and you start making payments on your new debt terms to this new lender.

What’s the difference between student loan refinancing and consolidation?

Student loan consolidation and student loan refinancing both streamline your debt repayment process by taking your original debt terms and offering you new ones. Either option can be a useful tactic in your debt payoff journey. However, there are key differences between the two processes.

Debt consolidation bases your new interest rate on your old interest rates. It takes the weighted average of your current interest rates to create your new interest rate.

Refinancing bases your new interest rate on your credit score and ability to repay the debt. This may be a higher or lower rate, depending on your credit score.

Keep in mind however,  there are caveats in refinancing federal student loans:

  • Some lenders will not refinance federal student loans at all.
  • To consolidate federal loans, you must do so with the Department of Education’s federal loan program.
  • You cannot refinance student loans through the Department of Education.

Refinancing through a private lender may require you to give up some of the protections that come from federal loans, such as loan forgiveness or income-based repayment options. Debt consolidation doesn’t require this.

The bottom line

Student loan refinancing might be an effective way to get control of your debt payoff plan, but make sure you understand the details of what refinancing means for you. Compare the pros and cons of student loan consolidation versus refinancing, and definitely shop around a few lenders before you make any final decisions. Knowledge is always power when it comes to money.

Kara Perez is the founder of Bravely Go, a feminist financial education company. Bravely focuses on bringing actionable, intersectional and accessible financial education to people via pop up events and online community. Additionally, Kara co-hosts the award-winning podcast The Fairer Cents, which has been named the top money podcast for women by Forbes and The Balance. Kara has been featured in Forbes, Glamour, ABC Nightline News, and US News and World Report as a financial expert. She lives in Austin TX.