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Published: Dec 12, 2022 30 min read
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  • Rates starting at 3.99% APR
  • Refinance undergraduate, graduate, and parent loans
  • Compare rates from multiple lenders quickly and easily
  • Check rates with no impact to your credit score
  • +650 credit score or
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  • No refinancing fees or pre-payment penalties
  • Checking rates will not impact your credit score
  • Accredited by the Better Business Bureau with an A+ rating
  • 4.8 rating on Trustpilot.com
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  • Coming August 4, 2021: Associate's degree loans refinanced
  • Fixed rates 3.29% - 5.43% APR
  • Choose from a 5, 8, 12, or 15-year repayment term
  • Easy online application
  • Find My Rate tool calculates savings with no impact to your credit score 
  • No application fees or prepayment penalties
  • Trusted by its members for over 85 years 
Our Partner
  • Refinance undergraduate, graduate, and parent loans
  • Refinance available for users with incomplete bachelor's or associate's degrees 
  • Loan amounts between $5,000 and $500,000
  • Customize your payment to suit your financial circumstances
  • Skip one payment per year with no penalty
  • Flexible loan terms from 5 to 20 years
  • Rates based in part on your earning potential
  • No application or origination fees or early repayment penalties

Refinancing your student loans can help some borrowers pay off their debt quicker and save money in the long run. Student loan refinance rates have been steadily rising from their historic lows in 2021 and some financial experts anticipate that this trend will continue in 2023, as the Federal Reserve strives to curb inflation.

If you’re thinking about refinancing private student loans, it might be a good idea to act before rates go up any further. However, borrowers with federal loans are better off waiting until the one-time loan forgiveness plan is sorted before considering refinancing.

Read on to learn more about our top picks for best student loan refinancing companies of 2023, along with industry insights and the latest information regarding student loan debt forgiveness.

As of this writing, President Joe Biden has extended the pandemic forbearance on student loans until legal challenges to the administration’s debt forgiveness plan are resolved. The federal student loan forgiveness plan aims to discharge $10,000 of student debt for borrowers earning less than $125,000, while recipients of need-based Pell Grants during college will be eligible for $20,000.

Our Top Picks for the Best Student Loan Refinance Companies

  • RISLA – Best for Income-Based Repayment
  • Credible - Best Student Loan Marketplace
  • PenFed - Best for Parents
  • Earnest - Best for Customizing Loan Repayment
  • MPOWER – Best for International and DACA Graduates
  • SoFi – Best for Member Benefits
  • Laurel Road - Best for Medical Professionals

Best Student Loan Refinance Reviews

Why we chose it: RISLA is an excellent choice for students who want to refinance without losing certain benefits unique to federal student loans. RISLA offers a generous forbearance policy and an income-driven repayment program with the possibility of debt forgiveness after 25 years.

Pros
  • Up to 24 months of financial hardship forbearance
  • Loan forgiveness after 25 years on an income-based repayment plan
  • Borrowers with unfinished degrees are eligible for refinancing
  • Interest rates aren't subject to market fluctuations
Cons
  • Deferred repayment is limited to a 15-year repayment term
  • No cosigner release
  • No associate degree refinancing
HIGHLIGHTS
Minimum income requirements
$40,000
Minimum credit score
No minimum credit score but lender conducts credit check
Cosigner release
No
Loan amount
$7,500 to $250,000
Loan terms
Immediate repayment: 5-,10- and 15-year terms | Deferred repayment: 15 years
Eligible loan types
Federal (both student and parent PLUS) and private loans
Eligible degrees
Bachelor's and graduate degrees
Allows refinance for non-graduates
Yes
Fees
No application or origination fees. Late payment fee may apply
Prepayment penalty
No
Fixed interest rate
Immediate repayment: 5.29% -7.74% APR | Deferred repayment: 7.39%-7.70% APR
Variable interest rate
Unavailable

RISLA, a non-profit, state-based lender, stands out due to its borrower protections, which are unparalleled in the private student lending sphere. The first of these benefits is an income-based repayment program that works as follows:

  • Monthly payments won’t exceed 15% of the borrower and cosigner’s discretionary income
  • If the loan hasn’t been paid in full after 25 years on income-based repayment, any remaining balance is forgiven

RISLA’s other borrower protections include:

  • Internship loan forgiveness – Borrowers qualify for up to $2,000 in debt cancellation if enrolled in an eligible internship program a year after graduation
  • Nursing rewards program – Nurses working in Rhode Island may pay 0% interest on their loan for up to four years
  • Economic hardship forbearance – Loans disbursed on or after July 1, 2021, are eligible for up to 24 months of forbearance if experiencing financial hardship, unemployment or disability

For students refinancing with RISLA, the lender offers one fixed-rate loan with two repayment options:

  • Immediate refinancing – Borrowers start the new repayment term 30 days after funds are disbursed.
  • Deferred refinancing – Borrowers can refinance while still in school. Payments aren’t due until six months after graduating.

To qualify for a RISLA loan, applicants must earn a minimum income of $40,000 annually, which is slightly higher than what other lenders require. There’s no minimum credit score, but the lender conducts a credit check and allows cosigners in case the borrower’s credit isn’t satisfactory. However, there’s no cosigner release; the only way to remove a cosigner is to refinance the loan again.

Why we chose it: We chose Credible as our best student loan marketplace because its prequalification tool allows borrowers to check rates from multiple lenders after filling out a single application.

Pros
  • Compare multiple lenders in one place
  • Refinancing options for non-graduates
  • $500 referral bonus. (All bonus payments are by gift card, terms apply.)
Cons
  • Not a loan originator or servicer
  • You must research each lender individually before applying
HIGHLIGHTS
Minimum income requirements
No minimum income
Minimum credit score
Generally 670, but may vary by lender
Cosigner release
Varies by lender
Loan amount
$5,000 minimum, no maximum
Loan terms
5- to 20-year terms
Eligible loan types
Federal (both student and parent PLUS) and private loans
Eligible degrees
Undergraduate and graduate degrees
Fees
No origination or application fees. Late fees may apply
Prepayment penalty
None
Fixed interest rate
3.99%-11.87% APR with autopay
Variable interest rate
3.99%-11.67% APR with autopay

Credible is an online marketplace where borrowers can compare rates and shop around for private student loans and student loan refinance. The company provides personalized quotes from banks, fintech companies and state loan authorities such as the Massachusetts Educational Financing Authority (MEFA) and Rhode Island Student Loan Authority (RISLA).

Borrowers can find refinancing options for federal student loans, private student loans and Parent PLUS loans.

Credible partner lenders include Brazos, Citizens Bank, College Ave, EdvestinU, ELFI, INvestEd, ISL Education Lending and PenFed. And while not all partners offer the lowest interest rates compared to other lenders on this list, the marketplace boasts:

  • High approval rates
  • Income-driven repayment plans (specific to RISLA)
  • No partnerships with lenders that charge prepayment fees, application fees or origination fees

The downside, as with other marketplaces, is that Credible doesn’t list all the terms and conditions of each lender. It’s recommended that you do your research to find out more about each lender’s terms, forbearance policy, discounts and economic hardship protections.

Why we chose it: Parents who took on debt to put their child through school may benefit from PenFed’s refinance program. Most lenders require that a parent loan remains in the parent’s name until the debt is settled. But PenFed allows borrowers to refinance Parent PLUS loans and transfer the debt to the child, provided the child meets the lender’s underwriting guidelines.

Pros
  • Spouses can refinance their student loans together
  • Graduates can take over Parent PLUS loans as primary borrowers
  • Cosigner release is available after just 12 on-time payments
Cons
  • Borrowers must be an existing PenFed credit union member or join PenFed to apply
  • Bachelor's degree required
  • No autopay discount
HIGHLIGHTS
Minimum income requirements
Ranges from $42,000 to $50,000, depending on the loan amount and whether there is a cosigner
Minimum credit score
670
Cosigner release
After 1 year of consecutive on-time payments
Loan amount
$7,500 minimum, $300,000 maximum
Loan terms
5- to 15-year terms
Eligible loan types
Federal (both student and parent PLUS) and private loans
Eligible degrees
Bachelor's degree or higher
Allows refinance for non-graduates
No
Fees
No origination or application fees. Late fee may apply
Prepayment penalty
None
Fixed interest rate
7.74%-9.93% APR
Variable interest rate
Unavailable

Pentagon Federal Credit Union, generally known as PenFed, is the second-largest credit union in the nation that offers student loan refinancing. The company offers fixed-rate options for borrowers — students, parents and couples — refinancing up to $300,000 in private or federal student loan debt, with loan payment terms ranging from five to 15 years.

With PenFed, married couples can file a loan application to refinance their student loans together. The spouse with the highest degree should apply as the primary applicant to ensure the best rates. Unlike traditional refinancing, only one person needs to have completed at least a bachelor’s degree to refinance through PenFed’s Couple Loan.

Parents can also refinance their Parent PLUS loans and transfer the debt to their children. Other lenders require the parent to stay on the loan after refinancing, but PenFed allows your child to apply for refinancing and assume your debt, removing your obligation to pay.

The minimum annual income requirement for refinancing ranges from $42,000 to $50,000, depending on the loan amount and whether there is a cosigner. As a PenFed member, you will also gain access to member rate discounts, an advice center and financial offers.

Why we chose it: Earnest is our top pick for customizing loan repayment due to its flexible repayment policy, unmatched by other lenders. Earnest allows borrowers to pick the monthly payment that fits their budget, and sets the repayment term based on that amount (even if it results in an uncommon number like 7.5 years).

Pros
  • Customizable payments and loan terms
  • Option to skip one payment every 12 months
  • No minimum income required
Cons
  • Parents can't transfer loans to child
  • No cosigner release
  • Strict requirements for unfinished degrees
  • Not available for citizens of Kentucky and Nevada
HIGHLIGHTS
Minimum income requirements
Varies based on each applicant's financial profile
Minimum credit score
680
Cosigner release
No
Loan amount
$5,000-$500,000 | California residents must refinance $10,000 minimum
Loan terms
5-,10-,15- and 20-year terms
Eligible loan types
Federal (both student and parent PLUS) and private loans
Eligible degrees
Undergraduate and graduate degrees
Allows refinance for non-graduates
Refinancing before graduation is allowed if the applicant is in their last semester and has a contract or employment offer. For borrowers who left school without finishing their degree may, refinancing is allowed under a few, specific conditions.
Fees
No origination or application fees. Late fee may apply
Prepayment penalty
None
Fixed interest rate
4.47%-8.99% APR with autopay
Variable interest rate
4.14%-8.94% APR with autopay

Backed by student loan giant Navient, Earnest offers competitive rates and multiple loan repayment options for its private loans and student loan refinance. The company features a unique underwriting approach that factors the borrower’s earning potential to determine the loan’s interest rate and monthly payment.

Earning potential is based on the applicant’s degree, history of on-time payments and credit score. The company says this benefits recent graduates or borrowers who may not have the credit history to qualify for refinancing elsewhere.

Earnest’s repayment options also allow for greater flexibility. Using its “precision pricing” strategy, the company:

  • Allows borrowers to choose a loan repayment term based on their ideal monthly payment amount
  • Adjusts term lengths to fit the targeted monthly payment, even if it means just adding a few months

Extending a term length by a few months instead of adding two to five years (the option that’s offered by most lenders) means that borrowers can set an affordable monthly payment without extending the loan term unnecessarily and paying a lot more in interest rates over the life of the loan. Conditions may apply.

Why we chose it: MPower is the only lender on our list that accepts refinancing applications for loans originated in other countries. International students with a valid visa and who worked for at least three months in the U.S. can refinance their student debt, release cosigners and build a U.S. credit history with each monthly payment.

Pros
  • Only lender that offers refinancing options for international students
  • Borrowers build U.S. credit history with their loan payments
  • Accepts DACA recipients, refugees and asylum seekers with a valid visa
  • Accepts international applicants without cosigner or credit history
Cons
  • Origination and currency conversion fees apply
  • High interest rates
  • A single repayment term
  • No refinance options for borrowers with unfinished degrees
HIGHLIGHTS
Minimum income requirements
None
Minimum credit score
No minimum credit score required
Cosigner release
Yes
Loan amount
$2,001 to 100,000
Loan terms
10-year
Eligible loan types
International, federal and private loans
Eligible degrees
Undergraduate and graduate
Allows refinance for non-graduates
No
Fees
2% origination fee. Foreign currency exchange fees apply
Prepayment penalty
None
Fixed interest rate
7.44%-14.98% APR with autopay
Variable interest rate
Unavailable

MPower Financing is a public benefit corporation that specializes in financing higher education for international students. It offers a fixed-rate loan with cosigner and collateral release (foreign loans sometimes require borrowers to put up collateral such as property or financial assets).

The lender is able to refinance loans originated in the following countries: Australia, Austria, Brazil, the Dominican Republic, Germany, India, Kenya, South Korea, Mexico, Nigeria, Philippines, Switzerland, Spain, the U.K. and the U.S. Currently, Canadian citizens and permanent residents aren’t eligible.

MPower accepts refinancing applications from U.S citizens, DACA recipients, permanent residents and foreign students, provided they meet its income and debt requirements. Borrowers must also:

  • Reside and work in the U.S. for a minimum of three months
  • Have a bachelor’s degree or higher from eligible institutions
  • Own a valid visa with two or more years of work authorization, in the case of foreign students

Although MPower is the only lender on our list that caters to international students, its loan terms are less favorable compared to competitors. Fixed interest rates are some of the highest among all the companies we surveyed. There’s also no variable rate loan alternative for borrowers who wish to take advantage of market fluctuations.

Why we chose it: SoFi is a leading online servicer that offers unique membership benefits in addition to its competitive rates and refinancing terms. Refinancing with SoFI grants you access to career coaching, free financial planning, estate planning discounts and more.

Pros
  • No loan maximums
  • Academic, military and disability rehab deferment
  • Membership benefits and rewards
  • Lower rates for doctors, dentists, nurses and residents
Cons
  • No spousal loan consolidation
  • No cosigner release for refinancing
  • It currently has 162 complaints with the CFPB, mainly relating to its loan process.
HIGHLIGHTS
Minimum income requirements
No minimum income requirements
Minimum credit score
650
Cosigner release
Available for in-school private loans, not for student loan refinancing
Loan amount
$5,000 up to your total outstanding loan balance
Loan terms
5-,7- ,10- and 20-year terms
Eligible loan types
Federal (both student and parent PLUS) and private loans
Eligible degrees
Undergraduate and graduate degrees
Allows refinance for non-graduates
Yes
Fees
No origination or application fees. Late fee may apply
Prepayment penalty
None
Fixed interest rate
4.49%-8.99% APR with autopay
Variable interest rate
4.49%-8.99% APR with autopay

SoFi stands out for its variety of membership benefits. Anyone with a SoFi product (banking and investment services, personal loans, mortgage loans, credit and student loans) qualifies to be a member and take advantage of the following perks:

  • Financial planning provided by a non-commissioned fiduciary agent
  • Career coaching and financial webinars
  • Nationwide member meet-ups and events
  • 15% discount for estate planning through Trust & Will, an online estate planning service
  • Points program that’s redeemable for cash

Members also qualify for a 0.125% discount off their monthly payment on top of the 0.25% autopay discount. Finally, SoFi features a loan referral program that awards a $300 bonus to you and the person you referred if they refinance with SoFi.

SoFi’s student loan refinancing program, serviced by the Higher Education Loan Authority of the State of Missouri (MOHELA), accepts applications for federal and private loans (including Parent PLUS and students who wish to take over their parent’s Parent PLUS loans).

The lender’s eligibility requirements and loan terms are on par with other student refinance companies, with one exception: there’s no cosigner release available after refinancing. SoFI allows applications with cosigners if the primary borrower doesn’t meet the underwriting guidelines, but if they wish to remove the cosigner in the future, they’d have to refinance again.

Why we chose it: Laurel Road’s reduced refinancing rates for optometrists, nurses, dentists, physicians and physician's assistants make it our top pick for medical professionals who wish to refinance their student loans.

Pros
  • Medical and dental students qualify for reduced monthly payments during residency
  • No loan amount maximum for bachelor's degrees or higher
  • No minimum income requirement
  • 3-month economic hardship forbearance
Cons
  • Limits refinancing of associate degree loans to borrowers in eligible healthcare fields
  • No refinance options for non-graduates
  • Listed as Keycorp, it currently has 482 complaints with the CFPB related to its student loans
HIGHLIGHTS
Minimum income requirements
Varies based on each applicant's financial profile
Minimum credit score
640, 650 or 660 depending on education level
Cosigner release
No, you must reapply for a loan to remove a cosigner
Loan amount
Bachelor's degree or higher: $5,000 minimum, no maximum | Associate degrees: $50,000
Loan terms
5-,7-,10-,15- and 20-year terms
Eligible loan types
Federal (both student and parent PLUS) and private loans
Eligible degrees
Undergraduate and graduate degrees
Allows refinance for non-graduates
Refinancing before graduation is allowed if the applicant is in their last semester and has a contract or employment offer.
Fees
No origination or application fees. Late fee may apply
Prepayment penalty
None
Fixed interest rate
4.49% - 7.75% APR with autopay
Variable interest rate
4.74% - 7.65% APR with autopay

Rates current as of Dic. 08, 2022, rates subject to change. Terms and Conditions apply. All products are subject to credit approval. Please see all Laurel Road disclaimers at https://www.laurelroad.com/partnerships/consumersadvocate/#disclaimers.

Laurel Road’s medical school loan program works for medical professionals who want to consolidate their federal and private loans into a single loan payment and take advantage of reduced interest rates offered only to health professionals. Additional discounts apply if the borrower opens a Laurel Road Linked Checking account and sets up monthly direct deposits of $2,500 or higher.

Laurel Road also offers a separate residency refinancing program. Medical and dental residents or fellows can pay as little as $100 per month for up to four years before starting a standard repayment plan. Interest will accrue during this period, but it will not compound, or be added to their principal balance, until they enter the standard repayment. After their fellowship or residency ends, they can defer the standard repayment term by up to six months.

Eligibility requirements for residents are based on the following:

  • Credit profile
  • Monthly debt payments
  • Income projections at the end of the training period

Laurel Road also offers a refinancing option for up to $50,000 for medical professionals with associate degrees in about a dozen eligible healthcare fields. However, the $50,000 maximum will not apply to parents who want to refinance the loans they took out to pay for their child’s associate degree.

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Other student loan refinance companies we considered

The companies reviewed below offer competitive interest rates and loan terms that may suit many borrowers. Readers will find short reviews that outline each lender's pros and cons, as well as a highlights table listing loan terms and eligibility requirements. Finally, we explain why the company didn’t make it into our top picks.

Splash Financial

HIGHLIGHTS
Minimum income requirements
Varies by lender
Minimum credit score
650
Cosigner release
Varies by lender
Loan amount
Varies by lender, minimum of $5K
Loan terms
5- to 25-year terms
Eligible loan types
Federal (both student and parent PLUS) and private loans
Eligible degrees
Bachelor' and graduate degrees. Associate degrees in eligible healthcare fields
Allows refinance for non-graduates
No
Fees
No origination, application or fees
Prepayment penalty
Varies by lender
Fixed interest rate
4.39%-8.99% APR with autopay
Variable interest rate
3.99%-8.99% APR with autopay

Splash Financial is an online marketplace that partners with loan servicers to provide low refinance rates and affordable repayment options for students looking to refinance their loans. Married couples can refinance together and consolidate their student loans into one, while parents can also refinance Parent PLUS loans and transfer the debt to their child.

Why it didn’t make the cut:

  • Splash Financial offers competitive rates and an easy loan application, but the company falls short when compared to similar marketplaces. Participating lenders don’t accept non-graduates and borrowers with associate degrees may only refinance if they graduated from eligible health care fields.

Read full review>>

Navy Federal Credit Union

HIGHLIGHTS
Minimum income requirement
No cosigner: $24,000 annually and established credit history | With cosigner: $1,200 annually. The cosigner must have an annual income of $24,000
Minimum credit score
Depends on each member's financial profile
Cosigner release
Available after 12 consecutive on-time payments
Loan amount
Minimum: $7,500 | Maximum: $125,000 for undergraduate debt and $175,000 for graduate or combined debt
Loan terms
5-, 10- and 15-year terms
Eligible loan types
Federal (both student and parent PLUS) and private loans
Eligible degrees
Undergraduate and graduate
Allows refinance for non-graduates
No
Fees
No origination or application fees. Late fee may apply
Prepayment penalty
None
Fixed interest rate
Starting at 3.44% with autopay
Variable interest rate
Starting at 4.66% with autopay

Navy Federal is the largest credit union in the world and specializes in banking and financial services for members of the military. Students with any type of student loan with Navy Federal are eligible to use the Career Assistance Program, an online job training tool that provides tips on interviewing, resume building and more. Parents with student loans for multiple children can refinance and benefit from student loan consolidation.

Why it didn't make the cut:

  • Limited membership. The credit union only services members of the military or those who have family or household members in the armed forces. (Anyone can become a member of PenFed Credit Union, which did make the cut.)

Citizens Bank

HIGHLIGHTS
Minimum income requirements
$12,000 annually
Minimum credit score
Undisclosed
Cosigner release
May be requested after 36 consecutive on-time principal payments on principal and interest
Loan amount
Minimum of $10,000. Maximum of $300,000 (Undergraduate degree), $500,000 (Graduate degree) and $750,000 (Professional degree)
Loan terms
5-,10-,15- and 20-year terms
Eligible loan types
Federal (both student and parent PLUS) and private loans
Eligible degrees
Undergraduate and graduate degrees
Allows refinance for non-graduates
Yes
Fees
No origination or application fees. Late fee may apply
Prepayment penalty
None. Extra payments go directly toward the principal balance
Fixed interest rate
4.49%-10.12% APR with autopay
Variable interest rate
3.84%-10.08% APR with autopay

Citizens Bank combines the stability of a traditional bank with the flexibility of online lending, and it offers refinancing options for both students and parents.

Loan refinancing is available to permanent resident aliens and non-U.S. citizens (with a qualified cosigner). Citizens Bank is also one of the few lenders that accepts refinance applications from borrowers who didn’t finish their degrees. To qualify, applicants must have made 12 consecutive, on-time payments.

Why it didn't make the cut:

  • Citizens Bank has strict eligibility requirements. There’s no in-school refinancing option and the minimum loan amount to qualify for refinancing is $10,000, which is double what most other lenders require. Although the limits are fairly high, the lender also sets a maximum loan amount per type of degree.

Student Loan Refinance Guide

Students and parents may be able to save money by refinancing, especially during periods of low interest rates. But refinancing isn’t a smart move for every borrower, so before taking that step, consider the implications of refinancing and if the outcome will be beneficial to your particular financial situation. For example, federal borrowers may score a lower interest rate but lose financial protections that could be crucial down the road.

Use our guide as a starting point to learn about refinancing, how it works and whether it’s the right choice to manage your student debt.

Table of Contents:

How does refinancing student loans work?

When you refinance your student loan you are replacing your current loan with a new loan with new terms from a private lender. Generally, borrowers refinance student loans to extend their repayment period (and therefore lower monthly payments), obtain a lower interest rate or consolidate multiple student loans into one single payment. Some borrowers may find terms that achieve all three at once.

You can only refinance student loans through a private lender, not the federal government. Experts caution people with federal loans to think very carefully about their situation before refinancing, because they’ll be giving up federal benefits that come with government loans such as student loan forgiveness programs and certain loan repayment programs. If your student loan is from a private lender, you can refinance with your current lender or choose a different lender.

Student loan refinancing vs. Student loan consolidation

One of the benefits of refinancing through a private student loan lender is that borrowers can consolidate multiple loans into one and have a single monthly payment under one servicer. But this benefit is not limited to private lenders. Students with eligible federal loans can consolidate their debt with a Direct Consolidation Loan, though there are pros and cons with that process as well..

Here are the key differences between federal student loan consolidation and refinancing:

Private Loan Refinance Direct Consolidation Loans
Replaces one or more existing loans — federal or private — with a new private loan. Combines your existing federal student loans into one federal student loan.
Available for federal and private loans, depending on the lender. Available for federal student loans only.
Interest rates are determined by your credit history and potential market trends. This may result in a lower interest rate. Your new interest rate will be the result of the weighted average of the interest rates on the loans you're consolidating, so this option does not reduce the amount of interest you’re paying each month.
Credit history will be verified. Does not require a credit check for approval.
Fixed and variable interest rates Fixed interest rates only
Multiple repayment terms are available, often 5 to 20 years. Consolidation loans offer several repayment options besides the standard 10-year repayment plan and can extend the term of the loan by 12 to 30 years.
Parent PLUS loans can be refinanced under the adult child's name, relieving parents of debt. Parent PLUS loans cannot be consolidated under the adult child’s name.
You lose all benefits associated with federal student loans. You retain many benefits and protections available to federal student loans.

Should you refinance your student loan?

Refinancing your student loans — whether federal or private — may save you money if you have high interest rates and a large monthly payment. However, it’s not always the best financial move, especially for borrowers with federal loans.

Refinancing a federal loan means losing valuable benefits and protections, such as income-based loan repayment plans, Public Service Loan Forgiveness and interest subsidies.

Consider the following advantages and disadvantages to determine if refinancing your student loan is the right choice:

Pros
  • Take advantage of market fluctuations to reduce your rate
  • Shorten your loan repayment term
  • Increase or lower your monthly payment
  • Consolidate federal and private student loans and have a single monthly payment
  • Option to remove your cosigner
  • Multiple repayment terms are available, often 5 to 20-year terms
Cons
  • No federal repayment protections
  • No federal student loan forgiveness
  • Generally no income-based repayment option
  • Subject to the private lender's repayment terms
  • No flexibility to alter the repayment plan without refinancing
  • Irreversible: private loans can't be converted back to federal loans

How to refinance student loans

Most online lending platforms prioritize ease of use and make the application process relatively simple. That said, we recommend you take note of the following before submitting applications to multiple lenders:

Check your credit

Student loan refinance lenders will take into account your creditworthiness. Generally, borrowers with credit scores in the high 600s, typically around 650 to 680, are more likely to qualify for a refinance loan.

If you have a low score or bad credit, a good first step is to check your credit reports for any incorrect information that may be affecting your score. Then take the appropriate steps to remove negative items from your credit history and work to improve your financial situation.

Consider the types of loans you have

Refinancing a federal loan means you lose exclusive benefits provided by the U.S. Department of Education, including Public Service Loan Forgiveness (PSLF), income-driven repayment plans, forbearance options and deferment. Private student loans generally have a limited disaster or emergency forbearance period compared to federal loans.

Shop around

When comparing refinancing lenders, look at the credit score and annual income requirements, the annual percentage rate range (APR) offered and debt-to-income ratio (DTI) requirements. Take the time to check the lender’s history with customer complaints or whether they’ve had any recent lawsuits related to their student loan products within the last five years.

Evaluate cosigner release options

Some private lenders may offer cosigner release options if the primary borrower meets specific repayment qualifying criteria. With a cosigner release, the cosigner’s credit will be cleared of debt, but the loan will remain in their credit history.

Research lender’s financial hardship relief options

Private lenders lack the same hardship relief options that federal loans offer, but they may award deferment on a case-by-case basis. While interest will continue to accrue, you’ll be able to put off payments for a specific amount of time if your financial situation warrants it.

To learn more, check out our full guide on how to refinance student loans.

Student loan refinance application requirements

A successful application process depends on the following:

Good credit

Most lenders require credit scores above 650, though you’ll need a higher score to qualify for the lowest advertised rates. If your credit is too low or you have a short credit history, you’ll likely have to apply with a cosigner that has excellent credit and a stable income.

Proof of Income

Stable annual income is essential. Lenders will evaluate your debt-to-income ratio (DTI), meaning the percentage of your gross income that goes toward paying debts each month. Most companies require you to have a low DTI to qualify, but some may accept written job offers as sufficient evidence.

Cosigner

Applicants with insufficient credit history, low income or a low credit score will benefit from a cosigner. A cosigner can be a parent or relative that applies for the loan with you and takes on the responsibility of paying it back if you can’t. Cosigners must have sufficient income and strong credit.

College degree

A college degree isn’t always necessary to refinance your student loans, but having a degree gives you more options. Most lenders require a bachelor’s degree to qualify for refinancing, and a few accept borrowers with associate degrees.

U.S. citizenship or permanent residency status

Most, if not all, lenders require you to be a U.S. citizen or permanent resident to be eligible to refinance your student loans. If your student loans are from a foreign country, it’s recommended that you build sufficient credit in the United States to qualify for refinancing.

Student Loan Refinance and COVID-19

In response to the pandemic, federal and private lenders activated financial relief plans to alleviate the student debt burden amidst layoffs, stay-at-home orders and increased economic uncertainty.

The government has since lifted most restrictions, but it's still enforcing the student debt protections laid out by the CARES Act. On the other hand, the private sector has resumed payments as normal, encouraging borrowers to request financial assistance as needed.

CARES Act

The Biden administration announced a further extension on the current suspension of federal student loan payments, interest and collections. Unlike past extensions, this one doesn’t have a set expiration date. Instead, it will remain in place until the Education Department receives a court decision on its debt forgiveness plan, currently paused due to ongoing litigation.

Private student loan forbearance and relief options

PenFed
Borrowers encountering financial concerns with their accounts are encouraged to contact
PenFed’s Financial Hardship Center for further assistance or call 1-800-246-5626
Earnest
Earnest’s short-term, interest-only program that allows clients to make lower (interest only) payments for up to 90 days. Borrowers may use this program for a maximum of 18 months.
Laurel Road
Full or partial forbearance of 3 monthly payments. Interest will continue to accrue.
For more information on financial assistance, contact the lender’s servicing partner MOHELA at 1-877-292-6845.
RISLA
Payments pause for up to 24 months in the event of financial hardship, unemployment or disability.
For more information, read the lender’s guide on borrower protections.
MPower Financing
The lender encourages borrowers to contact customer support if they’re experiencing financial hardship.
Splash Financial
Splash Financial encourages customers to reach out directly at (800) 349-3938 so they can negotiate accommodations like forbearance or waiving fees.
Navy Federal Credit Union
Eligible members may apply for a 3-month forbearance on their student loan payments.
The company encourages borrowers to contact their Student Loan Center at 1-877-304-9302 for more information.
For more information, please consult the lender’s Pandemic Relief FAQs section.
Citizens Bank
The bank offers discretionary loan payment forbearance. Interest will still accrue.
For more information, please refer to the lender’s Forbearance FAQ.
SoFi
The option to request a forbearance period for up to 12 months in 3-month increments (interest will still accrue, and the life of the loan will extend).
For more information, go to the lender’s Unemployment Protection Program guide.
Credible is excluded from this section because it’s a loan marketplace and does not issue loans. As it does not have its own payment relief policy in place, we recommend you refer to the specific loan servicer's platforms for further information.

Latest News on Student Loan Refinance

Millions of borrowers have received an email from the Education Department approving their debt forgiveness application, but loan discharge is far from becoming a reality. Biden’s student loan forgiveness program is tied up in ongoing litigation: federal courts have barred the Education Department from discharging any debt and the application portal was shut down in compliance with an injunction filed by a federal judge in Texas. The Supreme Court will hear the case in 2023.

In response to these legal setbacks, the Biden administration extended the payment pause once again. Student loan forbearance was set to end on Dec. 31, but the newest extension will stay in place until the Department of Education can resume its student loan relief plan or until the lawsuits are resolved in court.

Although debt forgiveness is in limbo for the time being, the administration announced changes to its Public Service Loan Forgiveness (PSLF) and income-based repayment programs that will benefit millions of borrowers. Read Biden Rolled out New Flexibility for Student Loan Payments This Week. Here's What to Know for more details.

Best student loan refinance FAQ

Can you refinance federal student loans?

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Yes, even though federal loans can be consolidated, you can choose to refinance them instead. However, note that you will lose federal student loan benefits, including repayment options.

How to refinance a student loan?

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First, decide if refinancing is the right option for you, as opting to refinance your federal loan will eliminate various federal loan benefits, including more generous deferment, forbearance and repayment options. Once you've made up your mind, you can shop for rates online and pick the best offer for you.

How often can you refinance student loans?

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You can refinance your student loan as many times as you want. Student loans typically don't carry any origination or prepayment fees. If you've already refinanced your student loan but have improved your credit score or found a better rate, you can refinance again.

Why refinance student loans?

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Refinancing your federal student loan isn't the best option for everyone. Federal loans usually have favorable terms and benefits you would lose by refinancing with a private lender. Before opting to refinance, look into the benefits of consolidating your federal student loans. Refinancing can be worth it only if it considerably lowers your interest rate and saves you money in the long run.

What is the best student loan refinance company?

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The simple answer is that the best student loan refinance company for you is just that: the best for your situation. A good place to start is with a lending marketplace, which lets you compare rates from different lenders with a single application. You can also take a look at our best student loan refinance list to further narrow down your options.

How We Chose the Best Student Loan Refinance Companies

Loan refinance selection

Some lenders didn’t make our cut because they didn’t offer a full range of refinancing options, such as for Parent PLUS student loans, which was a non-negotiable point in our criteria.

Payment options and fees

We favored companies with flexible payback policies, such as cosigner release and financial hardship relief options for qualified applicants. We also looked for financial institutions that offered refinance loans without charging application or origination fees or prepayment penalties. Additionally, we favored lenders who offered interest rate reductions for signing up for automatic payments, or autopay programs.

Customer experience

When we researched each company on our shortlist, it was important for us to evaluate whether lenders had an inordinate number of complaints or any ongoing actions with regulatory agencies such as the Consumer Finance Protection Bureau.

Summary of Money’s Best Student Loan Refinance Companies of January 2023

  • RISLA – Best for Income-Based Repayment
  • Credible - Best Student Loan Marketplace
  • PenFed - Best for Parents
  • Earnest - Best for Customizing Loan Repayment
  • MPOWER – Best for International and DACA Graduates
  • SoFi – Best for Member Benefits
  • Laurel Road - Best for Medical Professionals