How to Get Approved for Student Loan Refinancing

Donovan Herman
student loan refinancing
student loan refinancing

If you have student loan debt, you’ve probably noticed ads for student loan refinancing.  They’re on your tv, sprinkled throughout your podcasts, and waiting in your mailbox. You may have even thought about applying but stopped when you realized that —pre-qualified” doesn’t necessarily mean —qualified.” No one wants to lose precious credit score points if they don’t even qualify for a lower rate.

But, here’s the thing – you really can save a lot of money by refinancing your student loans if you meet the right criteria. With this handy guide, Purefy will help you learn a bit about refinancing in general, and more specifically, what a lender is looking for in you, the borrower.

What is student loan refinancing?

Student loan refinancing is a way to consolidate student loans that gives you the option of changing your current rate, term, and monthly payment. You do so by taking out a new loan with a private lender to pay off your current student loans.

Refinancing can be a great option for borrowers who are financially stable and looking to change the rate or term of their current loan. Often borrowers can find a rate and term that will help them pay off their loans faster to save on interest costs, or one that will lower their monthly payments to free up some space in their budget.

Before deciding to refinance, you’ll want to consider the benefits and risks of taking out a private student loan refinance, and consider whether you’ll qualify for the right rate and term for you.

How is a student loan refinance different from other loans?

One of the biggest surprises that borrowers face when refinancing student loans is the strict eligibility criteria, when compared to other types of loans. You may have years of on-time payment history, steadily increasing income, and a fantastic credit score. Still, the lender is requiring that you provide documents. What gives? The simple answer: a student loan refinance is an unsecured loan.

Unsecured vs. secured loans

An unsecured loan is one without collateral, while a secured loan is backed by the assets of the borrower. This means unsecured loans pose more risk to the lending institution than a secured loan.  Your auto loan or mortgage is backed by your house or your car, respectively. If you stop making payments, the lender can take them back.  If you stop making payments on your student loan refinance, however, the lender has limited options. Note: Please don’t stop making payments.

Because a student loan refinance is seen as more risky to lenders, they generally have stricter criteria than, say, an auto loan. It’s not you — it’s the type of loan!

So, what is the lender looking for?

After comparing rates with Purefy to find the best deal, you’ll want to start researching each lender’s basic eligibility requirements. For instance, different lenders have different citizenship requirements. While one may require both the borrower and cosigner to be U.S. Citizens, another may only require you to be a permanent resident. You can compare basic requirements and see special program features for each lender on our refinance page.

After you determine that you meet the basic eligibility requirements, you’ll want to consider if you’ll qualify for the rate you want. Each lender will have different methods for determining your creditworthiness and unfortunately, most lenders won’t share their exact methods with you. Purefy can help, though! Below, we’ll break down what lenders usually look for in a student loan refinance applicant.

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Credit score

Your credit score is a numeric value, ranging from 300 to 850, that is determined by your credit history. Your score is calculated using various factors, such as payment history, length of credit history, amounts owed, types of credit, and applications for new credit. Yes, simply applying for a new loan will slightly lower your credit score! You can earn those points back, though.

Refinancing companies generally require a strong credit score in order to qualify and an excellent credit score to get the best rates. If you are unsure what your credit score is, there are several free credit check websites. Keep in mind, though, that you can use Purefy’s rate comparison tool to compare offers from multiple lenders, to see where you qualify and who will give you the best rate. The tool has the option for a soft credit pull, which has no impact on your credit score (unlike submitting a full application).

Actions you can take: Keep your credit card balances to a minimum, diversify your types of debt, make on-time payments, and routinely monitor your credit report for errors and areas of improvement. Remember to unlock your credit before applying if you have a security freeze.

Commonly Requested Documents: The lender will pull your credit report from the bureau, but you will need to verify your identity with a government-issued photo ID. You may also be asked for address verification documentation if your address has recently changed.


Income is the amount of money you make per year. Sounds simple, right? Not always. If your income is variable you will likely be asked to provide documents to prove a steady income history. Say that, for example, you received a huge bonus at the beginning of the year, or you have been earning more overtime lately. Depending on the lender’s underwriting guidelines, you may or may not be able to count this extra pay as regular income on your application.

Most lenders are looking for income that they can consider —guaranteed,” so they will likely ask to see one to two years of your previous tax returns or W2s. If you are retired, be prepared to show tax documents or statements. If you are self-employed, be prepared to provide your tax returns.  Note that your bottom-line profit (or loss) is generally what will be used as your income in a given year — not your gross receipts or revenue. Some lenders may also use bank statements or profit and loss statements.

If you are unsure whether you’ll be able to use all your income to qualify for the loan, you should reach out to the lender. Tell them your situation and ask them what type of income they’ll accept and what documents you’ll be asked to provide.

Actions you can take: Use Purefy’s rate comparison tool, and enter a realistic estimate of your annual income—it will only show lenders where your stated income qualifies. Have all your financial documents ready when you apply, including older documents that can prove a pattern of income. If you are self-employed, remember that over-expensing can make applying for a loan more difficult.

Commonly Requested Documents: Paystubs, W2s, employment/salary verification letters, federal income tax returns, benefit award letters for retirement/disability, 1099s for retirement or independent contracting, bank statements.

Debt-to-income ratio

Debt-to-income ratio is a calculation of your monthly debt vs. your monthly income. The monthly debt is pulled from the credit report and the information you put on your loan application. It includes your minimum monthly payments for credit cards, loans, and your rent and/or mortgage. The lower your debt-to-income ratio, the better chance you have of qualifying for the best student loan rates.

Actions you can take: Keep your credit card balances to a minimum and pay off any debts you can.

Commonly Requested Documents: The lender will use your income documents and your credit report for this calculation.

Employment history

Most student loan refinance programs require that both the borrower and cosigner be employed or have some other stream of steady income. Still, there are some programs, like PenFed, that allow stay-at-home parents to apply with their spouses as a co-signer. 

Many lenders will consider your field of employment, how long you’ve been working, and your tenure with your current employer. A longer history with your current employer and many years in the same field are generally preferred.

Actions you can take: Stick with your chosen field, if possible. If you are looking to make a career change, consider an in-demand field as it may make you a more attractive borrower.

Commonly Requested Documents: Letter from your employer. W2s or tax returns.

Degree and school

Be prepared to show proof of your degree. Increasingly, lenders are looking at your education history when determining your creditworthiness. Many lenders offer the best rates to borrowers with graduate or professional-level degrees, and they often require that you have graduated from an approved school.

If you have not completed your schooling, you may still be able to refinance your loans, but you’ll most likely have fewer options.

Actions you can take:  Use our rate comparison tool and enter your degree and school. It will show the lenders where your school is eligible, and the rates will be customized to your degree type.

Commonly Requested Documents: Your diploma or transcript.

Repayment history and negative public records

When reviewing a student loan refinance candidate, lenders will often start with the repayment history on your current student loans. Many lenders require that you have made a certain number of consecutive monthly payments for the loans you are refinancing, and a lapse in on-time payments will often knock you out of contention.

The lender will also look at other payment issues or credit dings, such as collections records, bankruptcies, and delinquencies. Many of these can result in an automatic denial.

Actions you can take: If you think you have previously been delinquent on accounts, may have missed payments, or have other negative public records, you can verify by requesting a credit report from If you confirm any of these items on the report, contact us at 202-524-1115 or [email protected] and we will help determine which lenders might disqualify you.

Commonly requested Documents: This info will come from the credit report.

Don’t meet the lender’s requirements? Try a cosigner.

If you don’t meet the lender’s requirements, you may still qualify with a cosigner. Use our rate comparison tool to see if a cosigner can help you become qualified for a better rate. Many lenders also have a cosigner release policy, allowing you to drop your cosigner after a certain number of on-time payments.

Key takeaways

Student loan refinancing can be an effective way to consolidate student loans while saving money or lowering your monthly payments. If you decide refinancing student loans is right for you, the first thing you should do is compare rates, reviews, and eligibility criteria from multiple lenders. Purefy makes this first step easy with our rate comparison tool.

When choosing a lender, remember they are going to look at your credit history, education, income, and current debts to determine whether you qualify for their best student loan rates. It’s important that you gather as much information about the lender’s requirements as possible. Many will be tight-lipped about the specifics, but most will answer general eligibility questions. When you decide on a lender, make sure you have your identity, income, and education verification documents readily available. The sooner you get them to the lender, the sooner you’ll be saving.

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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 01/01/2023. 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.

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.

Earnest Rate Disclosure

2 Earnest Rate Disclosure:

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.72% APR to 9.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 4.39% APR to 9.19% 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.

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ISL Rate Disclosure

5 Iowa Student Loan Rate Disclosure:

Fixed Rate Loan Terms: 5 years/60 monthly payments, 7 years/84 monthly payments, 10 years/120 monthly payments, 15 years/180 monthly payments, or 20 years/240 monthly payments. Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. This rate is expressed as an APR. Fixed APRs range from 6.94% to 11.58% APR [low to high range with 0.25% auto-debit rate reduction]. Rates are subject to change without notice. Fixed rates will not change during the term. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan including a 0.25% auto-debit rate reduction. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. All estimates are based on information provided by you and are for informational purposes only, accuracy is not guaranteed and may not reflect actual rates or savings and do not constitute an offer of credit. Your actual rate, payment and savings may be different based on credit history, actual interest rate, loan amount, and term, including your cosigner [if applicable]. If applying with a cosigner, we use the higher credit score between the borrower and the cosigner for approval purposes. All loans are subject to credit approval.

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