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The 7 Top Student Loan Refinance Tips

Kat Tretina
7-top-student-loan-refinancing-tips
7-top-student-loan-refinancing-tips

Before You Read, Lower Your Student Loan Payment

It’s that quick & easy — really. Our free tool checks a network of top refinance lenders and shows you options in one easy chart.
Checking rates takes 2 minutes with no impact on your credit
Federal & private loans are eligible
No maximum loan amount

Before You Read, Lower Your Student Payment

It’s that quick & easy — really. Our free tool checks a network of top refinance lenders and shows you options in one easy chart.

Checking rates takes 2 minutes with no impact on your credit
Federal & private loans are eligible
No maximum loan amount

If you have student loan debt, you could be making payments well into your 30s or even your 40s.

The average college graduate has nearly $30,000 in student loan debt. According to the One Wisconsin Institute’s Student Loan Project, those with bachelor’s degrees take 21.1 years to repay their debt, on average.

Why does repaying student loan debt take so long? High interest rates can cause your loan balance to grow over time, making it difficult to make progress against the principal.

If you’re wondering how to lower student loan interest so you can save money while paying off your loans faster and getting out of debt once and for all, student loan refinancing is an effective strategy.

Plus, student loan refinancing offers a bunch of other helpful benefits and customizable features, too.

Here’s what you need to know to refinance your student loans and maximize your savings.

Why student loan refinancing is so effective

When you take out student loans as a college student, you may be stuck with high interest rates and unfavorable loan terms. Over time, the higher interest rates can cause your loans to balloon, and you can owe far more than you initially borrowed. By refinancing your student debt, you can save money and pay off your debt faster.

To refinance your student loans, you apply for a loan from a private lender for the amount of your existing education debt. You can refinance both private and federal loans. However, there are some drawbacks to refinancing federal loans you should consider before submitting your loan application.

If you’re approved for a refinancing loan, the lender will pay off your existing student loans. Going forward, you’ll have just one loan with a new interest rate, minimum payment, and repayment term. Depending on your credit history and application, you could qualify for a lower interest rate when you refinance, allowing you to save a substantial amount of money over your loan’s life.

7 student loan refinancing tips to help you get the best deal

If you decide that student loan refinancing is right for you, use these seven tips to help you find the right lender and the best loan to save the most money and get the best features.

1. Research student loan refinancing companies

There are dozens of student loan refinancing companies on the market. Since they’re all private lenders, they offer different interest rates, loan terms, benefits, and borrower options. It’s important to research multiple lenders instead of applying to the first one you find; rates and eligibility criteria can vary from lender to lender. Some things to consider include:

  • Loan amounts: Lenders often have loan minimums and maximums. If you have a large loan balance, you’ll have to look for a lender that caters to people with high loan amounts.
  • Degree requirements: Most refinancing lenders require applicants to have a bachelor’s degree to qualify for a loan. If you didn’t graduate or are still in school, your options are more limited.
  • Credit score: Most lenders require applicants to have good to excellent credit. If you don’t meet those criteria on your own, you’ll need a creditworthy cosigner to apply for the loan with you.

The 2 Best Companies to Refinance Student Loans

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Fixed Rate

5.19% – 9.74% APR 2

Variable Rate

5.72% – 9.74% APR 2

2. Check lender reviews and customer feedback

Before selecting a lender, check lender reviews and customer feedback. You can read lender reviews on Purefy and learn about each lender’s loans and policies. And, you can read about firsthand customer experiences on sites like TrustPilot.

3. Determine your student loan payoff goals

When refinancing your loans, think about what your primary goal is before you submit your loan application. These are three of the most common goals:

  • You want to save money: If you want to save money, you should look for a lender that offers the lowest interest rates for your credit score and desired loan term.
  • You want a smaller monthly payment: If your goal is figuring out how to lower your monthly student loan payment,look for a lender that has longer loan terms, such as 12, 15, or 20 years.
  • You want to pay off your loan as quickly as possible: If you want to become debt-free as soon as possible, select a lender that offers shorter loan terms and variable interest rates. You can take advantage of lower initial interest rates to pay off your debt more aggressively.

4. Consider added benefits and features

Not all lenders offer the same benefits and features. When shopping for a lender, make sure you compare the following perks:

  • Cosigner release programs: Some refinancing lenders allow you to apply for a cosigner release after making on-time payments for a few years. If approved, your cosigner is removed from the loan.
  • Hardship options: If you cannot afford your payments because of a job loss or medical emergency, some lenders allow you to enter forbearance. You can temporarily postpone or reduce your payments for a few months at a time without defaulting on your loans.
  • Discounts: Some refinancing lenders offer interest rate discounts for existing customers or for signing up for automatic payments.

5. Decide if you want a fixed-rate loan or a variable-rate loan

Next, figure out if you want a fixed-rate loan or a variable-rate loan when you refinance. With a fixed-rate loan, your interest rate and monthly payment never change. If you opt for a variable-rate loan, your rate will typically start lower than if you chose a fixed-rate loan. However, it can change over time.

Choosing a variable-rate loan is one of the ways to lower student loan interest, and can be a good strategy if you want to pay off your debt ahead of schedule. But if you’ll take several years to repay your loan, selecting a variable-rate loan can be risky since it can fluctuate.

6. Select a loan term

When looking for a loan, pay attention to the different loan terms.

While a longer loan term will give you a lower monthly payment, you’ll usually pay a higher interest rate to get a longer term. And, you’ll pay more in interest over time.

To get the best student loan refinance rates, you typically will need to choose a shorter loan term, meaning eight years or less. If you can afford a shorter loan term, it’s a great way to save money and get rid of your debt sooner.

7. Compare rates and terms from multiple lenders

It’s always a good idea to compare student loan refinance rates and terms from several lenders before making a decision. Rates can vary widely from lender to lender, so it’s smart to get quotes from different lenders so you can find the right loan for you and save the most money.

How to find the best student loan refinancing lender quickly

Now that you know how to lower student loan interest rates and manage your debt with student loan refinancing, you can start the process of finding a lender.

While you can comparison shop on your own, it can be time-consuming and frustrating to research and check a large number of lender websites. Luckily, there’s a better way. You can use Purefy’s Compare Rates tool to get quotes from top student loan refinancing lenders at once all in one place, without affecting your credit score.

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Ascent Rate Disclosure

Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentStudentLoans.com/Ts&Cs.

Rates are effective as of 12/1/2023 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized back account each month. For Ascent rates and repayment examples please visit: www.AscentStudentLoans.com/Rates.

1% Cash Back Graduation Reward subject to terms and conditions. Click here for details.

SoFi Rate Disclosure

3 SoFi Rate Disclosure:

Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 5.09% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. 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. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

ISL Rate Disclosure

Earnest Rate Disclosure

2 Earnest Rate Disclosure:


Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.44% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.97% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

Advertiser Disclosure:

THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.

Earnest Rate Disclosure

Rates displayed include the 0.25% Auto Pay discount. You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.67% APR to 16.15% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.64% APR to 16.45% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan origination loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.

Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.

Loan Eligibility criteria: Eligible students must: 1) For college Freshmen, Sophomores and Juniors, attend, or be enrolled to attend, a Title IV school full-time. For college Seniors and Graduate students, attend, or be enrolled to attend, a Title IV school at least half-time; and 2) be pursuing a Bachelor’s or Graduate degree. Earnest private student loans are subject to credit qualification, completion of a loan application, verification of application information, self-certification of loan amount, and school certification.

Responsible borrowing tip: Explore all scholarship, grant and federal options before applying for a private loan.

Earnest Private Student Loans are made by One American Bank, Member FDIC. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104.

Earnest loans are serviced by Earnest Operations LLC, 535 Mission St., Suite 1663 San Francisco, CA 94105, NMLS #1204917, with support From Navient Solutions, LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.

Advertiser Disclosure:

THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.

ELFI Rate Disclosure

4 ELFI Rate Disclosure:

Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 10/13/2023. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

ELFI Rate Disclosure

Education Loan Finance is a nationwide student loan provider offered by Tennessee based SouthEast Bank. ELFI is designed to assist students financially with receiving their education. Subject to credit approval. See Terms & Conditions. Interest rates current as of 12/11/2023. Variable interest rates may increase after closing but will never exceed 18.00%. Interest rates may also differ from the rates shown above. The term of your loan, financial history, and other factors, including your cosigner’s (if any) financial history can affect the interest rate. For example, a 10-year loan with a fixed rate of 7% would have 120 payments of $11.61 per $1,000 borrowed. Rates are subject to change.

College Ave Rate Disclosure

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
Minimum loan amount $1,000, as certified by your school and less any other financial aid you might receive.
This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 1/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

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