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Financed Your Degree with Student Loans? Refinance to a Smarter Option

Kathryn Morstad
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Now more than ever, a college education is expensive. Whether you opted for an in-state institution or chose to go to a school out of state, your tuition, books, fees, and living expenses undoubtedly added up quickly.

If you are like most people, you used federal and/or private student loans to help fill in the funding gaps for your education. A loan here, a loan there and by graduation you had an impressive portfolio of monthly payments to various lenders.

You’re not alone. Today, over 44 million Americans are faced with the same problem — how to pay off student loan debt.

Limitations Created by Student Loan Debt

With an average of $29,650 in college loan debt, many recent graduates are faced with postponing important life events. Excessive debt can mean putting off marriage and/or children, buying a home, or saving for retirement.

Unless you have had a recent windfall that covers your debt load, you may want to consider refinancing your loans to position yourself for a better future.

Financing vs. Refinancing

First, it’s important to understand the difference between financing an original loan versus refinancing one or more existing loans.  Consider these two general definitions as they relate to debt or mortgages:

  • Financing — When a bank or lender provides funds in exchange of a debt instrument that the debtor agrees to repay on an agreed-upon schedule.
  • Refinancing — When a bank or lender consolidates, repackages, or refinances an existing loan or loans into one comprehensive package often with better interest rates and more desirable terms.  Refinancing allows restructuring of debt to more agreeable conditions.

What is Student Loan Refinancing?

Private student loan refinancing is a sub-category of the refinance industry that deals primarily in refinancing federal and private student loans. Lenders that specialize in student loan refinancing are able to offer more flexible options, but require increased creditworthiness usually demonstrated by a solid credit history and strong income. 

If you are newly graduated with little to no credit history, or have a limited record of strong income, private student loan lenders will allow a credit worthy parent or friend as a cosigner. This allows you to build your credit report while paying your loan in a timely manner.

The 4 Best Companies to Refinance Student Loans

Our Top-Rated Picks for 2022 Offer Low Rates and No Fees

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No Maximum Loan Amount

Fixed Rate

4.48% – 7.29% APR 4

Variable Rate

3.53% – 7.24% APR 4
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Fixed Rate

4.49% – 8.99% APR 3

Variable Rate

4.49% – 8.99% APR 3
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Precision Pricing — Pick Your Monthly Payment

Fixed Rate

4.39% – 8.99% APR 2

Variable Rate

3.99% – 8.29% APR 2
Loans Available in All States but Maine and Oregon

Fixed Rate

3.94% – 8.48% APR 5

Variable Rate

Not Offered

When Should You Refinance Student Loans?

Once you have graduated and are starting your career, you may feel overwhelmed by your existing federal and private student loans. Most people graduate with multiple loans, each with a different lender, terms, and interest rate, but don’t know how to lower their student loan payment.  Here are some reasons to consider a possible student loan restructure through refinancing:

  • You’re looking to save money on high-interest student debt and get a lower rate. By refinancing to a lower rate, you save money over the life of your loan. On a $20,000 loan with 4% interest over 20 years, a one percent reduction can save $2,400 over the life of the loan.
  • You want to pay off your student loans faster. By restructuring your loan terms, you can opt for a shorter term with higher payments. This allows you to retire the debt earlier. By making extra payments or paying more on the principal when possible, even more time (and money) can be saved over the loan period.
  • You want to lower your monthly payment. You can restructure your student loan debt to a longer term. This will reduce your monthly payment allowing you to develop a more manageable budget. 
  • You want one easy student loan payment.  For ease and convenience, you can refinance several federal and private student loans into one loan package. This is also called loan consolidation. With one single loan, repayment is much more streamlined, and you no longer have to manage multiple due dates and lenders.

Compare Student Loan Refinance Rates and Find Your Best Option

Refinancing is a great option for student loan debt if you’re looking to save on high interest, lower your monthly bill, or pay off your debt faster. And now is a great time to consider refinancing your student loans — rates are at historic lows.

At Purefy, we have assembled a group of well-vetted lenders who offer low interest rates, flexible terms and no origination or prepayment fees. Our lenders offer the best student loan refinance rates in the industry and are eager to compete for your business.

Compare and Save

Try Purefy’s rate comparison tool. It’s designed to provide you with pre-qualifying rates and terms and will support you in making a decision. By submitting a few simple pieces of your personal information, you’ll receive a side-by-side comparison of top, national lenders with real rates and terms.

At Purefy, we believe that understanding your options for refinancing your student loan debt is crucial to making a smart financial decision. With our pre-qualified rate comparison, there is no impact to your credit score until you choose a lender and pursue a final offer — and there are no fees or strings attached.

The Bottom Line

Due to historically low interest rates, now is the perfect time to pursue refinancing your student loan debt. Whether you want lower payments or a quicker pay off, consider this opportunity to get the best student loan refinance rates through Purefy’s simple, fast tool.

In addition to our unique rate comparison tool, Purefy also offers a Free Refinance Consultation. We have knowledgeable Student Loan Advisors that are only a scheduled appointment away from answering all of your questions or assisting you with the application process.

It’s your future — manage your student loan debt in a way that allows you to budget comfortably and make plans for what lies ahead. Compare what our best lenders have to offer at Purefy.

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Student Loan Refinancing

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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 12/01/2022. 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 4.49% 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 4.64% APR to 9.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 4.24% APR to 8.54% 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.

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 3.94% to 8.48% 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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