Student Loan Refinance Guide

Even if you entered college with the best student loan, you might still find yourself feeling crushed by the huge debt burden attached to your name on graduation. But what if you’re able to refinance your student loan at a cheaper rate? It might just make your years of studies seem a little more affordable.

While some college graduates will have a bigger debt than others, according to The Institute for College Access & Success, the average borrowing for the class of 2018 is $29,200. However, that figure could be much more depending on the cost of the school you attend. It’s a lot of money, which is why we’ve compiled a guide on the best student loan refinance options on the market, selected based on the SimpleScore methodology.

Lending Partner
Min. Loan
Fixed APR
Eligible Degrees
  • SoFi
    SoFi Logo
    Min. Loan
    $5,000
    Fixed APR
    2.99%–6.94% (with AutoPay)
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Splash Financial
    Min. Loan
    $5,000
    Fixed APR
    as low as 2.63%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • LendKey
    Min. Loan
    Varies
    Fixed APR
    2.95%–7.63%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • College Ave
    Min. Loan
    $5,000
    Fixed APR
    Starting at 3.34%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • CommonBond
    Min. Loan
    Varies
    Fixed APR
    2.59%–6.74%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Discover Private Consolidation Loan
    Min. Loan
    $5,000
    Fixed APR
    3.49%–6.99%1
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
  • Education Loan Finance
    Min. Loan
    $15,000
    Fixed APR
    2.79%
    Eligible Degrees
    Undergraduate, Graduate & Parent Loans
    NEXT
    on lender’s secure website
  • Credible
    Min. Loan
    Varies
    Fixed APR
    2.79% – 9.15%
    Eligible Degrees
    Undergraduate & Graduate
    NEXT
    on lender’s secure website
Lowest APRs shown for the Discover Private Consolidation Loans are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include a 0.25% interest rate reduction while enrolled in automatic payments.

In this article

    Best student refinance lenders

    Best student loan refinancing at a glance

    LenderFixed RatesLoan AmountTermsKey Benefit
    SoFi2.99%–6.94% (with AutoPay)$5,000 – full amount of qualified education loans5 –20 yearsSoft pull on credit
    LendKey2.95%–7.63%$5,000 – $300,0005 –20 yearsAvoid big banks
    Splash Financialas low as 2.63%$5,000 – no maximum5 –20 yearsNo maximum loan amount
    Discover3.49%–6.99%1$5,000 up to $150,00 in aggregate student loan debt. Higher limits may apply for specific fields of study.10 or 20 yearsFlexible repayment options for struggling borrowers
    Earnestas low as 2.98%$5,000 – $500,0005 –20 yearsCustomized loan terms
    Lowest APRs shown for the Discover Private Consolidation Loans are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include a 0.25% interest rate reduction while enrolled in automatic payments.

    Best overall – SoFi

    SoFi offers decent rates and the ability to quote in lightning speed without putting a dent in your credit.

    Fixed APR
    2.99%–6.94% (with AutoPay)
    Variable APR
    2.25%–6.49% (with AutoPay)
    Fees
    Late fee
    SimpleScore
    3.6 / 5.0
    close
    SimpleScore SoFi 3.6
    Fixed APR 4
    Perks 4
    Transparency 3
    Variable APR 3
    Fees 4

    SoFi is strong on customer service and boasts an impressive 98% recommendation rate. You can refinance both federal and private loans at competitive APRs. SoFi offers pre-qualification, meaning you can check your rates and terms without impacting your credit score. Getting a quote from this lender takes a mere three minutes. There are no origination fees, late fees or insufficient funds fees. While SoFi doesn’t disclose a minimum credit score for student loan refinance, you’ll need to be employed, have an employment offer to start within 90 days or demonstrate sufficient income to be eligible.

    SoFi Disclosure

    1. Fixed rates from 2.99% APR to 6.88% APR (with AutoPay). Variable rates from 2.25% APR to 6.43% 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 2.25% APR assumes current 1 month LIBOR rate of 0.13% plus 2.37% 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. The discount will not reduce the monthly payment; instead, the interest savings are applied to the principal loan balance, which may help pay the loan down faster. Enrolling in autopay is not required to receive a loan from SoFi. *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.Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.

    Best lender network – LendKey

    Not a fan of the big banks? LendKey shows you don’t need them for top rates and broad refinancing loan features.

    Fixed APR
    2.95%–7.63%
    Variable APR
    1.90%–5.25%
    Fees
    N/A
    SimpleScore
    3.6 / 5.0
    close
    SimpleScore LendKey 3.6
    Max Fixed APR 3
    Perks 4
    Transparency 4
    Max Variable APR 3
    Fees 4

    LendKey is a top student loan refinance company and a great choice for tech-savvy borrowers who want to avoid big banks. You can refinance both federal and private loans at competitive APRs and check rates without affecting your credit. There are no application or prepayment fees, and enrolling in autopay will earn you a 0.25% discount. You’ll need a minimum credit score of 660, but LendKey will also consider factors like debt-to-income ratio and length of credit history. You can add a cosigner to strengthen your application, too. Forbearance options are available if you hit financial hardship.

    LendKey Disclosure

    The minimum loan amount is $5,000 (Except if you are a resident of AZ: $10,001; CT: $15,001; MA: $6,000). The maximum is $125,000 if you have an undergraduate degree, $175,000 if you have a graduate degree, and $300,000 for select medical degrees.

    Best for medical school debt – Splash Financial

    If you’re drowning in medical school debt, Splash Financials can make things simpler and more affordable.

    Fixed APR
    as low as 2.63%
    Variable APR
    as low as 1.89%
    Fees
    N/A
    SimpleScore
    3.5 / 5.0
    close
    SimpleScore Splash Financial 3.5
    Max Fixed APR 4
    Perks 3
    Transparency 4
    Max Variable APR 3
    Fees N/A

    Splash is an online marketplace allowing you to receive multiple offers from its partners (Laurel Road, PenFed and U-Fi from Nelnet) with a single application. Rates are highly competitive, and you can get a further 0.25% discount with autopay. For those with huge medical school debts, having no maximum borrowing amount is useful, as is the ability for married couples to refinance their loans into a single debt. Eligible borrowers employed full-time as a postgraduate trainee can also make $100 monthly payments throughout their training. You’ll need a credit score of 660 to apply, but having a cosigner could help your chances.

    Splash Financial Disclosure

    Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan). Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

    Best payment flexibility – Discover Private Consolidation Loan

    Discover won’t offer the best rates or the most loan options, but if life gives you lemons, Discover will give you a break.

    Min. Loan
    $5,000
    Fixed APR
    3.49%–6.99%1
    Eligible Degrees
    Undergraduate & Graduate
    SimpleScore
    4.8 / 5.0
    close
    SimpleScore Discover Private Consolidation Loan 4.8
    Fixed APR 4
    Perks 5
    Transparency 5
    Variable APR 5
    Fees 5

    What makes Discover’s product a winner is repayment flexibility. There are academic, military, public service and medical residency deferment options. Payments can be postponed for up to 12 months if you’re experiencing financial hardship. There are even temporary interest or payment reductions available in certain circumstances. You won’t be charged prepayment, origination or late fees. You can even refinance with Discover if you didn’t graduate.

    Discover Private Consolidation Loan Disclosure

    Lowest APRs shown for Discover Private Consolidation Loans are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include a 0.25% interest rate reduction while enrolled in automatic payments. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Your APR will be determined after you apply. Visit Discover.com/student-loans/consolidation.html for more information, including up-to-date interest rates and APRs.

    Best mobile app platform – Earnest

    If you want flexible ways of managing your account and useful features like the ability to change payment dates and amounts, Earnest is the way to go.

    Fixed APR
    as low as 2.98%
    Variable APR
    as low as 1.99%
    Fees
    None
    SimpleScore
    4.8 / 5.0
    close
    SimpleScore Earnest 4.8
    Fixed APR 5
    Perks 5
    Transparency 4
    Variable APR 5
    Fees 5

    “There’s a lot to like about Earnest. Its rates are amongst the best in the market, and you’ll get a further 0.25% with autopay. Loan terms are customizable — down to the month — which is not something available at traditional banks. Earnest makes managing your new loan much easier through its mobile app platform, which lets you change your payment date or your payment amount. However, Earnest is only available in 47 states and the District of Columbia. You’ll need a minimum credit score of 650 to apply — Earnest doesn’t allow potential borrowers to apply with a cosigner.

    What is student loan refinancing?

    Refinancing is all about consolidating your existing student loans with a private lender. While the process varies between lenders, as do the fees involved and the types of loans eligible for refinancing, the general idea is that you’ll simplify your various student loans by rolling them into a single debt and receiving more favorable rates and terms. Although a lower rate can result in substantial interest savings, refinancing is not suitable for everyone. For example, if your financial position hasn’t improved since graduation, it’s highly unlikely you’ll be offered a better deal. Refinancing could also lengthen the duration of your debt.

    [Read: Where to Find Financial Relief During the COVID-19 Pandemic]

    How student refinancing works

    Refinancing involves taking out a new loan to repay an earlier loan or loans. You can refinance different kinds of borrowings — mortgages, auto loans and of course, student loans. While the new loan will have different features and interest rates applied, the mechanics remain the same. You’ll still make regular repayments over an agreed time period, and each payment will cover interest and reduce the principal you owe.

    [Read: What’s Happening to Interest Rates and Why Does It Matter?]

    So why bother to refinance? It can save you a lot of money if you qualify for a lower interest rate. With a cheaper rate, you could either pay less in monthly repayments and enjoy better cash flow or keep your repayment amount the same but get rid of your debt sooner.

    There are some things to consider when evaluating your refinancing options. For starters, the best student loan refinance rates advertised are usually reserved for borrowers with excellent credit, so if your credit isn’t excellent, then your rate will likely be higher. Also, refinancing can bring loan fees. Third, not all private lenders will refinance federal loans.

    APR

    APR stands for annual percentage rate. It represents the total cost involved in repaying a loan expressed as a percentage. It’s made up of the interest rate applicable to the loan and other charges like origination fees. When comparing loans, APRs are often more useful because they include all financing costs rather than just the interest component.

    Terms

    In the context of borrowing, the term of a loan refers to its duration, or the length of time you’re expected to make regular repayments. The loan term affects the repayment amount. Borrowing terms can also refer to the terms and conditions you’re agreeing to when you take out the loan.

    Loan amount

    This refers to the amount you need to borrow. If you have multiple student loans, the loan amount will be the sum of all your outstanding balances.

    [Read: Coronavirus Unemployment: How to Apply for Benefits If You Lose Your Job]

    How to choose the best student loan refinancing for you

    1. Check your credit report. Identify any inaccuracies and decide whether you should improve your credit before making applications.
    2. Determine your cash flow. Lenders also tend to look at how much money you’ve got coming in and going out each month when deciding on your application, so know your cash flow position and figure out what you can do to improve it.
    3. Determine how much you owe. Check your student loan statements or log onto your accounts and add up your outstanding balances so you know how much you’ll need to borrow.
    4. Do some initial research. It’s time to compare lenders. Pay attention to things like the rates offered, refinancing charges, account fees (like late fee and prepayment fee), how you can manage your account and whether you can prequalify to find out your rate and terms. Shortlist a few providers meeting your expectations.
    5. Get some quotes. Now let’s see which lender will give you the best deal. Try to make applications close together to minimize the impact of hard credit inquiries on your credit report. According to major credit bureau Equifax, multiple inquires on your credit file made within 14 to 45 days are normally treated as a single inquiry.
    6. Bargain with your current lender. If you’ve been offered a lower rate elsewhere, check in with your current lender to see if it can match that rate or better.
    7. Make a decision. Compare offers and check how your interest cost would change with different loans. Review loan features as well as assess the impact of any fees or prepayment penalties. Then sign up with the lender offering the best deal.

    Student loan refinancing FAQs

    Yes, you can refinance student loans more than once, either with the same lender or with different lenders each time.

    No, a cosigner is not required if you have strong income and credit to support your application.

    You can be approved in as little as a few minutes.

    No, you can only refinance federal loans through a private lender. You can consolidate federal loans, however, through a Direct Consolidation Loan with the Department of Education.

    Student loan refinancing involves getting a new loan at a different interest rate and potentially a new term. Student loan consolidation, on the other hand, combines multiple loans into a single loan.

    1Lowest APRs shown for Discover Private Consolidation Loans are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include a 0.25% interest rate reduction while enrolled in automatic payments. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Your APR will be determined after you apply. Visit Discover.com/student-loans/consolidation.html for more information, including up-to-date interest rates and APRs.

    We welcome your feedback on this article and would love to hear about your experience with the student loan refinance loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Methodology

    SimpleScore

    The SimpleScore is a proprietary scoring metric we use to objectively compare products and services at The Simple Dollar.

    For every review, our editorial team:

    • Identifies five measurable aspects to compare across each brand
    • Determines the rating criteria for each aspect score
    • Averages the five aspect scores to produce a single SimpleScore™

    Here’s a breakdown of the five aspect scores and their rating criteria for our review of the best student loans of 2020.

    Max Fixed Rate

    Lenders who offered a lower maximum fixed rate were awarded higher scores.

    Perks

    We awarded higher scores for lenders that list more perks including services, discounts and special offers for their borrowers.

    Transparency

    Lenders that laid it all bare by publishing important data about products — APR, offered loan amounts, applicable fees and customer support contact links — scored higher for transparency.

    Loan Amount

    Lenders that offered higher loan amounts compared to others received higher scores. 

    Fees

    We awarded higher scores to lenders that have fewer loan fees for borrowers. 

    Jason Lee

    Contributing Writer

    Jason Lee is a U.S.-based freelance writer with a passion for writing about dating, banking, tech, personal growth, food and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill sets with the rest of the world. Follow Jason on Facebook here

    Reviewed by

    • Andrea Perez
      Andrea Perez
      Personal Finance Editor

      Andrea Perez is an editor at The Simple Dollar who leads our news and opinion coverage. She specializes in financial policy, banking, and investing.