Best Student Loan Refinance: November 2019

Refinancing your student loans with the right lender could save you thousands in interest. This means lower total payments overall and being debt-free faster.

If you're in better financial shape today than when you graduated, refinancing may be the right step for you. Read on to learn how.

What Is Student Loan Refinancing

Student loan refinancing is when you replace your current loan(s) with a new one that offers a new term and interest rate. You can combine loans, even private and federal ones. But refinancing federal loans will remove any federal benefits.

Refinancing is done through a private lender. The lender will look at your credit, income, and other factors to give you a new rate. If your credit has improved, you may qualify for better rates and terms. This will allow you to save a lot in interest.

Should You Refinance Your Student Loans

Before you refinance, think about whether it's right for you. Be sure to consider these factors:

1. Do you have federal loans?
   If you have federal loans, options like income-driven plans or loan forgiveness may be better. If you refinance federal loans, you will no longer be eligible for federal forgiveness programs.

   Instead, consider consolidating your federal loans to make repayment more manageable. Private loans have no forgiveness programs so refinancing makes sense.

   Learn more about your options with these articles:
   

   • How to Get Your Student Loans Forgiven
     
   • Is It Better to Consolidate Student Loans

2. Has your credit improved?
   The goal of refinancing is to get a better rate and term. With a better credit score, you'll be able to qualify for a better interest rate.

3. How long do you have left on the loan?
   If you only have a couple of years left, you've pretty much paid most of the interest by this point. Refinancing probably isn't going to yield much of a benefit at this stage.

What to Look for in a Student Refinance Loan

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The best student loan refinances often have:

1. Low interest
   You want the lowest possible interest rate. Your rate will depend on your credit and income. Don't be afraid to shop around.
   How do interest rate inquiries affect my credit?:
   When you first ask for a rate estimate, the lender will do a "soft pull" of your credit. This will NOT affect your score.

   When you officially apply with a lender, a "hard pull" will be performed. This drops your credit score by at least a couple of points. It will fall off of your credit report completely after two years.

   Read more on how to improve your credit score here.
   

2. Steady rates
   Lenders offer both fixed and variable interest rates.
   • Fixed rate loans won't change for the whole term of the loan. This is best if you're not sure how long you'll need to pay off the debt.

   • Variable rates are usually lower to start but may increase over time. If you can pay off your debt in the next few years, this could save you more money. Otherwise, your monthly payment amounts may rise.

3. Reasonable terms
   A shorter term will get you out of debt sooner, but the monthly payments will be higher. A longer term will be more affordable, but it means more interest. Pick a term with payments you can afford.

   The lenders on our list all have no prepayment penalties. Steer clear of those that do.

4. No fees
   You shouldn't pay application or underwriting fees. None of the lenders on our list all charge origination fees.

Best Student Loan Refinance Companies

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Here are our choices for the top student loan refinance companies.

Best Overall: SoFi

SoFi Student Loans
• Variable APR: 2.31% to 7.362% APR (with AutoPay)
• Fixed APR: 3.46% to 5.98% APR (with AutoPay)
Pros: Keep federal grace period Refinance Parent Plus loans

Cons: Must have great credit score
Our Review: (4.6) Is student loan refinancing a good idea? Is SoFi legit? Is NOW a good time to refinance? Read on. The answers may surprise you... Read full review
Refinance Student Loans

SoFi is one of the leading student loan refinance provider. We picked SoFi as our best overall pick for its competitive rates, low minimum loan amount, and excellent member benefits not offered by other providers.

Top Features:

• Merit-based lending
  SoFi looks at details beyond just your credit score to determine your rate. It'll also consider factors such as your education, income, and financial history.

• Job loss protection
  If you become unemployed, your payments are suspended for up to 12 months until you get back to work. However, your interest will still accrue during this time.

• Member benefits
  All SoFi members get exclusive benefits to help you in life. These include free career coaching to help you find a new job, personalized financial advice from credentialed advisors, and educational events.

• Medical Residency Refi
  During your residency, you can refi and only pay $100 minimum per month for up to 54 months (the length of a standard residency program). Your interest doesn't compound during this time.

Other Benefits:

• No origination fee or prepayment penalty
  
• Loan amounts of $5,000 - no maximum
  
• Terms options of 5, 7, 10, 15, and 20 years
  
• 0.25% rate discount with auto-pay
  
• Can refinance private, federal, and Parent PLUS loans
  
• Referral bonus of $100 per friend

SoFi: Refinance Student Loans
Click Here to Find Your Rate

Best Custom Term: Earnest

Earnest Student Loans
• Variable APR: 1.81% - 6.49% (includes 0.25% autopay discount)
• Fixed APR: 3.45% - 6.99% (includes 0.25% autopay discount)
Pros: Looks beyond your credit score Custom term based on budget Option to skip one payment every 12 months

Cons: Tougher requirements No co-signer option
Our Review: (4.6) Earnest offers low student loan refinance rates and customizes payments based on your budget. But approval may be harder. Read on for the pros and cons... Read full review
Refinance Student Loans

Earnest is unique in that it customizes payments based on your budget. This is something other lenders don't offer. But it may have tougher requirements for approval because you'll also need to demonstrate responsible financial habits.

Top Features:

• Precision Pricing
  Earnest will custom tailor your rate and term based on how much you can afford to pay each month. You can get a custom term anywhere from 60 to 240 months (instead of the standard 5, 7, 10, 15, or 20 years). This helps you minimize interest.

• Merit-based lending
  Earnest will consider factors like your savings and spending habits, credit card debt, payment history, and earning potential to determine your approval and rate. This is good if you don't have a long credit history.

• Skip a payment
  Earnest knows that life happens. After you've made 6 months of on-time payments, you can request to skip a payment. You can do this once every 12 months.

• Ability to switch rates
  You can switch between a fixed rate to variable rate (or vice versa) every 6 months at no charge.

Other Benefits:

• No origination fee or prepayment penalty
  
• $5,000—$500,000 loan refinance limit
  
• No late fee if you accidentally miss a payment
  
• Forbearance and deferment options
  
• Payment flexibility
  
• 0.25% rate discount with auto-pay

Best Fixed Rates: ELFI

ELFI Student Loans
• Variable APR: 2.39% - 5.78%
• Fixed APR: 3.14% - 6.69%
Pros: Low fixed rates Up to 12 months forbearance

Cons: Minimum $15,000 to refinance No cosigner release
Our Review: (4.4) Struggling to repay your student loans? ELFI offers lower interest rates and reduced monthly payments. But is this refinance program right for you?... Read full review
Refinance Student Loans

ELFI offers the lowest fixed rates out of all student loan refinance providers we've found. However, the minimum loan amount is $15,000. Credit score, income, and credit history requirements are also quite high.

Top Features:

• Low fixed rates
  The main draw of ELFI is their low fixed rates. There is no autopay discount as the rate is already low. If you have at least $15,000 to refinance, ELFI is worth looking into to see if you can get a better rate than other providers.

• Hardship support
  If you run into financial or medical hardship, ELFI allows up to 12 months of forbearance.

• Referral bonus
  For every friend you refer who refinances with ELFI, you get $400 and your friend gets $100.

Other Benefits:

• No origination fee or prepayment penalty
  
• Loan amounts of $15,000 - no maximum
  
• Terms of 5, 7, 10, 15, and 20 years
  
• Available in all 50 states and Puerto Rico
  
• Can refinance private, federal, and Parent PLUS loans

Best for High Balances: Laurel Road

Laurel Road Student Loans
• Variable APR: 2.99%-6.42%
• Fixed APR: 3.5%-6.99%
Pros: Low repayment options for medical residency Keep federal grace period Forgiveness is available due to disability

Cons: No mobile app Forbearance options are on a case-by-case basis
Our Review: (4.6) If your student loan interest is too high, consider refinancing with Laurel Road. But wait. Read this review to learn how it works and what to watch out for... Read full review

Laurel Road (previously Darien Rowayton Bank, or DRB) offers student loan refinancing in all 50 states.

Top Features:

• No maximum limit
  There is no cap on how much you can refinance. So this is a good option if you borrowed heavily to get through school.

• Medical Resident Refi
  As soon as you're matched to a residency program, you pay only $100 per month throughout your residency or fellowship, and for 6 months after training.

• Referral bonus
  Get a cash bonus of $400 for every friend you refer. You can choose to share some of those earnings with them. There is no limit to how people you can refer.

Other Benefits:

• No origination fees or prepayment penalty
  
• Loan amounts of $5,000 - no maximum
  
• Terms of 5, 7, 10, 15, and 20 years
  
• Up to 1 year of forbearance if you experience economic hardship
  
• 0.25% rate discount rate with auto-pay
  
• Available in all 50 states

Best Community-Focused Lender: CommonBond

CommonBond Student Loans
• Variable APR: 2.43% to 6.59% (with AutoPay)
• Fixed APR: 3.49% to 8.07% (with AutoPay)
Pros: Hybrid program Payment protections Social mission

Cons: Not available for all states Long process to approval
Our Review: (4.5) CommonBond offers competitive rates for student loan refinance along with a strong social mission. Is it right for you? See the pros and cons... Read full review
Refinance Student Loans

CommonBond has a strong community and social mission, which makes it a standout from other lenders. You can get a lower rate while also feeling good about your contribution.

Top Features:

• Hybrid rate option
  Aside from the standard fixed and variable rates, CommonBond also offers a unique 10-year hybrid term. This is a fixed rate for 5 years, then variable rate for 5 years. The rate is lower than the typical 10-year fixed rate, so it's a good option if you think you can prepay.

• Hardship support
  If you run into economic hardship, CommonBond offers up to 24 months of forbearance over the life of the loan.

• Community events
  CommonBond has a strong community that hosts networking events, panels, and career assistance. You can make connections and find job opportunities.

• Social mission
  For every borrower, CommonBond covers the cost of a child's education in the developing world. Their partnership with Pencils of Promise has provided schools, teachers, and technology to thousands students in developing countries.

Other Benefits:

• No origination fees or prepayment penalty
  
• $5,000—$500,000 loan refinance limit
  
• Access to the Care Team via phone, email, or live chat
  
• Ability to add a co-signer
  
• 0.25% rate discount rate with auto-pay
  
• Referral bonus of $200 for every friend you refer

Best Network of Lenders: LendKey

LendKey Student Loans
• Variable APR: 2.51% to 7.51% (with AutoPay)
• Fixed APR: 3.49% to 7.54% (with AutoPay)
Pros: Offer interest rate reduction beyond auto-debit reduction Excellent customer service Return policy within 30 days you can return your loan

Cons: Cumbersome application process Lack of transparency regarding loan documents
Our Review: (4.4) Saving thousands of dollars on your student loans sounds perfect, and that's just what LendKey promises. Is it the real deal, though?... Read full review
Refinance Student Loans

LendKey is an online platform that connects you to hundreds of credit unions and local banks to get you the best rates. Small financial institutions often offer better rates than the big banks.

Top Features:

• Receive multiple offers
  With just one application, you can receive multiple pre-approved offers from small banks and credit unions. You can take your time to review and compare the offers before choosing a lender for the official application.

• Interest-only payment option
  You have the option to make interest-only payments for up to 4 years. This may be a good option if you want to lock in a low interest rate, but can't afford high monthly payments at this time. Note that your payments will be higher later.

• Referral bonuses
  Get $50 for every friend who gets approved and $200 for every friend who takes a loan with LendKey.

Other Benefits:

• No origination fees or prepayment penalty
  
• $7,500—$300,000 loan refinance limit
  
• Terms of 5, 7, 10, 15, and 20 years
  
• Cosigner release options after 12 months
  
• Up to 18 months in forbearance
  
• 0.25% rate discount rate with auto-pay

Best Medical & Dental School Refi: Splash Financial

Splash
• Variable APR: 2.43% - 7.48% (With AutoPay)
• Fixed APR: 3.48% - 7.27% (Without AutoPay)
Pros: No max limit Up to 20 years deferment for medical residency Spouses can refi together

Cons: Forbearance is limited
Our Review: (4.5) Splash Financial offers competitive rates for student loan refinancing, with an emphasis on medical and dental school loans. Is it right for you? Read on... Read full review
Refinance Student Loans - $300 Bonus

Splash Financial started out as strictly a medical school loan refinancing company. They now offer general student loan refinancing, but still offer great medical and dental school refi benefits.

Top Features:

• No maximum limit
  There's no cap on how much you can refinance. So this is great if you borrowed heavily to get through med school.

• Up to 20 years deferment
  Medical and dental residents can defer making full payments while in training and for up to 6 months after. You only pay $100/month while in residency. The total loan term including residency, fellowship and grace period can be up to 20 years.

• Two borrowers can refi together
  Married couples (and those in unique situations) can refinance their student loans together into just one loan. This is great if one partner has better credit and income. Both can take advantage of that and get the better rate.

• Referral bonus
  With each friend you successfully refer to Splash Financial, you both receive a $250 cash bonus.

Other Benefits:

• No origination fees or prepayment penalty
  
• Loan amounts of $5,000 - no maximum
  
• Terms of 5, 7, 8, 10, 12, 15, and 20 years
  
• 0.25% rate discount rate with auto-pay
  
• Refinance federal, private, and Parent PLUS loans

Other Options for Student Loan Refinance

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iHelp:
They provide clients with transparency and personal help. Soon they will issue Parent Plus loans for students' parents, too.

iHelp offers three repayment options while you're in school:

• Deferment
  
• Interest-only payments
  
• Standard interest/principal payments.

Purefy:
This company is a great choice if you're married and want to combine loans with your spouse. Purefy also offers discounts on:

• Loans
  
• Personalized service
  
• Fixed and variable rates

College Ave:
This company offers flexible payments, including interest-only or full principal and interest. There are 11 terms to choose from, starting from 5 years to 15 years.

Do Banks Refinance Student Loans?

Only a handful of banks and credit unions do student loan refinancing if you'd rather get a loan backed by a bank. Here are the banks that offer this service:

Discover
This popular online bank also offers student loan refinancing. It allows you to consolidate and refinance even while you're still in school. And you can choose which loans you want to refinance.

Wells Fargo
The bank's student loan refinancing program offers great discounts. There are 2 ways to get an interest rate discount.

You get up to 0.50% discount if you (or your cosigner) are a Wells Fargo checking customer. And you can get another 0.25% discount when you enroll in auto payments.

Citizens Bank
This company offers student loan refinancing backed by a bank. Citizens Bank will refinance even if you didn't finish school.

You just need to have made 12 consecutive on-time payments on your current loan.

First Republic
This company offers some of the lowest fixed rates, as well as an amazing incentive for paying your loan off early. If you can pay back in full within 4 years, you earn back the interest paid on the loan (up to 2% of the original loan balance).

PNC Bank
The Education Refinance Loan requires 2 years of steady income or employment. It offers a 0.50% rate discount when you set up auto payments. Choose between a 10 or 15-year repayment term.

PenFed
They offer lower interest rates than other banks and credit unions. It even refinances Parent PLUS loans and allows spouses to combine their loans.

You can be a member of PenFed Credit Union by joining Voices for America's Troops for a small membership fee.

Why Refinance Your Student Loans?

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Pay less interest
Saving money is the best (and most popular) reason to refinance. If you can obtain a lower interest rate, you'll save thousands on interest over the life of the loan.

Simplify payments
Many borrowers refinance to make managing multiple student loans easier. When you bring several loans together, you'll only have one monthly payment to pay.

Pay off early
Most student loan refinances don't have a prepayment penalty. You can get ahead by paying your loans off early, which means paying less interest overall.

What Lenders Are Looking For

Wondering if you'll get approved? Here are some things that lenders will look at:

Credit score
This is an overall look at your financial health. A higher credit score can get you a better interest rate on your student loan.

Most lenders want to see a credit score in the high 600s. Lenders like SoFi and Earnest have a minimum credit score requirement of 650.

Income & work status
Lenders want to see that you have a steady job and recurring income. That way, they know you're capable of making monthly payments. Some lenders may approve you for refinancing if you have not started working but have a written job offer.

Debt to income ratio
You may have other debt in your life, including credit card debt or auto loans. Lenders will look at how much debt you have compared to your income.

If you have a lot of debt, they may question your ability to pay your student loan debt on top of all.

How to Maximize Your Chances for Approval

Consider these ideas when trying to get the best rates when refinancing student loans:

Lower your debt
Pay off as much of your debt as possible, especially unsecured debt like credit cards. The best way to improve your credit score and debt-to-income ratio is to reduce your debt.

Apply to multiple lenders
Shop around so you can see who gives you the best rate. A lot of lenders only do a soft pull on your credit for pre-approval.

All inquires within a 45-day window will be counted as one on your credit report. Once a lender gives you a rate quote, you are under no obligation to take it.

Get a co-signer
If you're unable to obtain a loan on your own, you can get a cosigner (such as a parent). This person will agree to be responsible for your loans if you default, so you must have a good relationship.

If your cosigner has good credit and income, they can help you get approved and/or get a lower interest rate. A lot of lenders offer a cosigner release after a certain period of time. This way, your cosigners won't be forced to stay on your loan until the end.

Other Options

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Before you jump in and refinance, make sure you exhaust your other options. Contact your loan servicer to learn more.

Federal loan forgiveness
Certain programs forgive a portion of your outstanding student loans. If you work in public service, as a teacher, or as a child care provider, inquire about these programs.

They usually require you to enroll in an income-based repayment plan. After a specific period, you may receive forgiveness of the remainder of your loan balances—meaning you don't owe any more money.

Income repayment plan
If you have federal loans, you may be eligible for an income repayment plan. The DOE tailors your payments to your current income.

The payments change as your income changes. This typically goes on for 20 years. After that point, most programs forgive the remaining balance.

Leave your loan alone
You always have the option to stick with the Standard Repayment Plan. If the rate you're paying now is the lowest available in the market, there is no need to refinance. This assumes you can afford the standard payment each month, though.

Common Questions

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• What's the difference between refinancing and consolidating?
  Refinancing is when you get a new interest rate and term based on your credit. You can combine both federal and private student loans.

  Consolidating is for federal loans only. It means lumping multiple loans into one. You'll pay a weighted average of all interest rates on your loans.

• Is it better to refinance or consolidate student loans?
  Refinancing student loans gives you the option to find a better rate and term, which can save you a ton in interest. However, once you refinance, you are ineligible for forgiveness, so make sure you don't plan to apply for any forgiveness programs.

  Consolidating doesn't usually save you money; it simply reorganizes your student debts. It's a good option if you need to make your federal loans more manageable.

  With consolidation, you may enter an income-driven repayment plan which could have up to a 25-year repayment period.

• Is it worth it to refinance student loans?
  Refinancing student loans can save you a lot of money in the long run. You can get a lower interest rate, which can save thousands in interest.

  It can also simplify your payments by grouping multiple loans into just one new loan with one monthly payment. But there are some situations when refinancing is not worth it:

  • If you're planning to apply for forgiveness programs
    
  • If you have low income and want to apply for income-based repayment plans
    
  • If you have bad credit and won't qualify for a low rate
    
  • If you are almost done with paying back the loans

• Does it cost money to refinance student loans?
  None of the student loan refinance lenders on our list charge an application or origination fee. So it will not cost anything to apply and secure a loan. There are also no prepayment fees, so it won't cost money to pay your loans off early.

• What credit score do you need to get approved?
  It goes without saying, the higher your score the better. Each lender has their own requirements. Basically, they don't want late payments, collections, or any type of default on your credit report.

  Typically, lenders want to see credit scores in the high 600s. However, the lenders we chose don't focus solely on your credit score. They also look at your employment history, savings patterns, and potential for the future.

• How do you prove you can afford the refinance?
  The lender will ask you for appropriate documents. Be prepared to show your last few paystubs and tax returns.

  Lenders will look for consistent income and employment over the last year or so. They don't base your approval solely on your income. But it does play a big role.

• How do you qualify to refinance?
  Usually, you will need to be at least 18, have obtained a degree, and have a stable income. Then just visit one or more of the websites suggested above and fill in your information. You can get pre-approvals without doing a hard pull on your credit.

  You will receive offers for loan refinancing. You will still need to officially apply to get your final rate. Make sure you read and understand the rates and terms of your offer(s). Finally, accept the terms of your chosen loan refinance offer, and get on your way to lower student loan interest rates.

• When should you refinance your student loans?
  Refinancing is a smart idea if you have high interest rates on your student loans AND you don't plan to apply for forgiveness programs. Refinance as soon as you have a strong credit score and stable income. This will ensure that you get the best rates.

• Can student loans be forgiven?
  There are a variety of loan forgiveness programs. The federal government offers 4 income-driven repayment plans. You can get the rest of your loans forgiven after making 20-25 years of payments.

  There are also lots of forgiveness programs for those who work in certain sectors, like teachers, nurses, and doctors.

  You can get portions of your loans forgiven when you work for a certain number of years. Typically, you must work in an underserved area.

• Does refinancing your student loans hurt your credit?
  A lot of lenders only do a soft pull to pre-approve you for refinancing, which does not hurt your credit. Once you decide to officially apply, the lender will have to do a hard pull. But that only affects your credit score by a couple of points. All inquiries within 45 days are typically treated as one inquiry on your credit report.

• Do student loans affect credit score while still in school?
  Your student loans will show up on your credit report while you're in school, but they will not affect your credit score. Usually, you get a 6-month grace period after graduation before you need to start paying.

  If you do decide to start making payments while in school, then this will only have a positive effect on your credit score as you make on-time monthly payments.

• Can defaulted student loans be removed from credit report?
  Typically, a delinquency or default of any kind will stay on your credit report for 7 years. But there is an option to get your student loan default removed sooner under the rehabilitation program.

  This can only be done once for federal loans. You agree to a payment amount and must make on-time payments for 9 months. Then the default status will be removed and your credit history restored.

• Can you refinance student loans without a degree?
  Most lenders do require a completed degree for student loan refinance. However, Citizens Bank is one of the few lenders who will refinance even if you never finished school.

  You must make at least 12 consecutive, on-time monthly payments on your current loans before applying.

• Do you have to graduate to refinance student loans?
  Typically, lenders require that you have graduated. Without graduating, lenders don't know if you will be able to find a job or your income potential. There are some lenders who allow you to start refinancing even when you're still in school.

  Earnest will refinance your student loans if you are in your final semester at school and have a written job offer that starts within 6 months (or already have consistent income).

• How can I reduce my student loan debt?
  You can reduce your student loans by one of two ways: pay them off faster, or find ways to get them forgiven.

  If you don't plan to apply for any forgiveness programs, then find ways to pay off the loans faster so that there's less interest. Some ways include:

  • Refinance student loans to a lower interest rate
    
  • Ask about employer reimbursement
    
  • Pay more than the monthly payment
    
  • Pay ahead of time, or make an extra payment each month
    
  • Make more income, like getting a side job or renting out a spare room
    
  • Apply any tax returns or gift money to your student loan debt

Bottom Line

Student loan refinancing is a great way to take control of your financial future. Ignoring your options could leave you wasting money on interest for many years. Review our favorite student loan refinance lenders and see if you have the option to save money too.