Refinancing student loans can save you $10,000-50,000+ over the life of your loans by securing a lower interest rate. This guide explains when refinancing makes sense and compares the best lenders.
Refinancing Quick Facts 2025
- Current rates: 4.49% - 8.99% (varies by credit)
- Federal loan rate: 6.53% (undergraduate 2024-25)
- Average savings: $15,000-25,000 over loan life
- Best candidates: 700+ credit, stable income
- Warning: Refinancing federal loans = losing federal benefits
Best Student Loan Refinancing Lenders 2025
| Lender | Fixed Rate | Variable Rate | Loan Terms | Rating |
|---|---|---|---|---|
| SoFi | 4.49-8.99% | 5.28-8.99% | 5-20 years | |
| Earnest | 4.49-8.99% | 5.28-8.99% | 5-20 years | |
| Laurel Road | 4.49-8.75% | 5.28-8.75% | 5-20 years | |
| Splash Financial | 4.49-8.99% | 4.99-8.99% | 5-20 years | |
| ELFI | 4.49-8.69% | 5.28-8.69% | 5-20 years |
Should You Refinance?
GOOD CANDIDATE
Refinancing Makes Sense If:
- Credit score 700+ (or 650+ with cosigner)
- Stable income and employment
- Current rate is 1%+ higher than refinance rates
- You have private loans (not losing federal benefits)
- You don't need income-driven repayment or PSLF
AVOID REFINANCING
Don't Refinance If:
- You're pursuing Public Service Loan Forgiveness (PSLF)
- You need income-driven repayment plans
- Job stability is uncertain
- You're close to qualifying for loan forgiveness
- Credit score is below 650
How Much Can You Save?
| Loan Balance | Current Rate | New Rate | Monthly Savings | Total Savings |
|---|---|---|---|---|
| $50,000 | 7.0% | 5.0% | $54 | $6,480 |
| $100,000 | 7.0% | 5.0% | $108 | $12,960 |
| $150,000 | 7.5% | 5.0% | $199 | $23,880 |
| $200,000 | 7.5% | 4.5% | $311 | $37,320 |
*Based on 10-year repayment term
Fixed vs. Variable Rates
Fixed Rate
- Pros: Predictable payments, protection from rate increases
- Cons: Typically starts 0.5-1% higher than variable
- Best for: Long-term loans (10+ years), risk-averse borrowers
Variable Rate
- Pros: Lower initial rate, saves more if rates stay low
- Cons: Payments can increase, uncertainty
- Best for: Short-term loans, aggressive payoff plans
How to Get the Best Rate
Rate Optimization Tips
- Improve credit score: 750+ gets best rates
- Shop multiple lenders: Rates vary significantly
- Consider a cosigner: Can reduce rate by 1-2%
- Set up autopay: 0.25% rate discount
- Choose shorter term: Lower rates but higher payments
- Apply within 14-45 days: Multiple inquiries count as one
Federal Loan Benefits You Lose
- Income-driven repayment: Payments based on income
- PSLF eligibility: Forgiveness after 10 years public service
- Forbearance/deferment: Pause payments during hardship
- Death/disability discharge: Loan forgiveness
- Interest subsidies: During school and grace period
Step-by-Step Refinancing Process
- Check your credit: Review score and fix errors
- Gather documents: Pay stubs, loan statements, tax returns
- Get rate quotes: Pre-qualify with multiple lenders (soft pull)
- Compare offers: APR, terms, borrower benefits
- Submit application: Full application with chosen lender
- Review and sign: Verify terms before signing
- Old loans paid off: New lender pays existing loans
Lender Bonus Features
| Lender | Unemployment Protection | Cosigner Release | Special Perks |
|---|---|---|---|
| SoFi | Yes (forbearance) | After 24 payments | Career coaching, member events |
| Earnest | Yes | After 24 payments | Skip 1 payment/year |
| Laurel Road | Yes | After 36 payments | Medical resident rates |
| CommonBond | Yes | After 24 payments | Social promise program |