Top Ways You Can Refinance Associate Degree Student Loans

Kathryn Morstad

Are you one of those people who would like to get the advantages of student loan refinancing but who received an associate degree instead of a bachelor’s degree? Well, you may have heard that you can’t refinance your associate degree student loans, but that’s not necessarily the case.

In some circumstances, you may be able to refinance associate degree student loans and save money on the interest you pay throughout the life of the loan.

While many lenders aren’t interested in refinancing associate degree student loans, there are a handful of savvy top-quality lenders that understand an associate degree often leads to 4-year degree programs and beyond. These lenders also understand that jobs requiring an associate degree often pay as much as those requiring bachelor’s degrees, thereby making them equally profitable when considering lending opportunities.

Why do you typically need a 4-year degree to refinance student loans?

Most private lenders love to refinance student loans, but they concentrate on people with bachelor’s degrees and graduate degrees. Their assumption is that those are the people who will be able to repay their loans with no problem.

Lenders develop risk models that determine their loan portfolios, and their bottom line depends on picking the right groups to lend money that keeps their loan portfolios healthy.

That means that lenders who work in the student loan refinance market will focus on top earners to ensure they mitigate as much risk as possible according to their actuarial information. This actuarial information gives them a likelihood analysis of which groups are more likely to repay student loans on time and in full.

As an overall strategy, focusing on graduates with bachelor’s degrees and master’s degrees has become standard procedure for many lenders.

Can you refinance student loans with only a 2-year degree?

Yes, it is possible. However, only a handful of lenders will consider you for an associate degree student loan and there is a wide divide on what many lenders require.

Of those lenders, several companies have restrictive policies regarding who can receive or refinance associate degree student loans, including:

  • Requiring at least 12 monthly payments be made on-time to your current student loan provider before being considered for a refinanced loan.
  • Only providing student loan refinancing for a handful of healthcare-related associate degrees, e.g., Nursing, Dental Hygienist, Cardiovascular Technologist (CVT), EMT/Paramedics, Occupational Therapy Assistant, Pharmacy Technician, Physical Therapy Assistant, Radiologic/MRI Technologist, Respiratory Therapy, or Surgical Technologist.
  • Being employed in the field where you received the degree, i.e., healthcare, when applying for a refinanced student loan. That is not a factor or requirement for any other degree types except perhaps medicine or law.

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Which lenders allow refinancing with an associate degree

Let’s look at three five-star lenders that welcome the opportunity to refinance associate degree student loans. All these lenders are top tier in the industry and receive excellent reviews from customers refinancing their student loans.

  • Earnest — Offers refinance loans for associate degree student debt with a credit score greater than 650. They offer fixed and variable rate loans from $5K to $500K with terms between 5 and 20 years.

  • ISL Education Lending — Offers fixed rate loans to associate degree holders with a credit score above 670. ISL refinances loan for amounts between $5K and $300K and terms between 5 and 20 years.

  • SoFi — Offers fixed and variable rate loans for 5, 7, 10, 15, or 20 years. You must have a credit score of at least 650 to be eligible.

Later in this article, you’ll learn how to use the Purefy Rate Comparison Tool to get pre-approved quotes from these lenders if you qualify. But first, let’s talk about the ‘how’ and the ‘why’ of refinancing your associate degree student loans.

Why refinance associate degree student loans?

So, why even bother with refinancing your student loans in the first place? Well, there are several reasons. First, you can save money. Second, you can choose new terms. And third, YOU CAN SAVE MONEY!

When you are approved for a refinance, you have the opportunity to restructure your current loan(s) to work better for your lifestyle, including interest rates and loan terms which can significantly alter your budget. Consider these options:

Get a lower interest rate

Now is a great time to refinance. Interest rates are at all-time lows and there is a good chance you can score a new interest rate that saves you money.

For example, if you have loans totaling $15,000 and have an average interest rate of 7% for 10 years, then you are paying $174.16 per month and will end up paying $5,899 in interest at the end of the term when your loans are paid off.

Now let’s assume that you have a strong credit background and can secure a refinance rate of 3.5%. You lower your monthly payment to $148.33 and pay only $2,799 in interest for a savings of $3,100.

Pay off your loan sooner

OK, saving on interest is great, but you also want to pay off your loan sooner. Maybe you’ve been postponing something important like getting married or having a child until the time is right.

By shortening the terms of your associate degree student loan repayment, you could pay off that loan sooner and use that money for other things.

Now is the perfect time since the lower interest rates available could offset the shorter terms, meaning you could be paying a similar monthly payment while paying off the loan much sooner. Check out our student loan refinance calculator to see potential savings.

Lengthen your term to save on monthly payments

On the flip side, you may be strapped for expendable cash each month or want a little more of your hard-earned salary available to spend on friends or family.

By expanding the terms of your refinanced loan, you can greatly reduce your monthly payment. Using the above example, a $15,000 loan at 3.5% interest that has a 20-year repayment term would call for a monthly payment of $87 (or at 15 years, a $107 payment).

You would then have the difference available for other things.

Consolidate multiple loans

Often, people graduate with multiple student loans that have to be paid each month. Every loan has a different due date and payment amount. It can be cumbersome to manage even if you have the system automated.

By refinancing multiple associate degree student loans into one simple loan, you can simplify your monthly budget and bill paying process making it much easier.

A possible drawback

When you are thinking about refinancing federal loans with a private lender, you will lose the benefits afforded by the federal loan program. This includes federal programs like income-based repayment plans, public service loan forgiveness plans, or the generous deferment options afforded federal student loan holders.

If those programs are important to you now or in the future, you need to consider that before pursuing a refinanced student loan.

See How Much You Can Save

Student Loan Refinance Calculator

View Details


Student loan refinancing combines your current loans into a single loan with a new rate and term. See how much you can save by entering your loan information below, or by getting quotes from multiple lenders using Purefy’s rate comparison tool.

Step 1: Enter Current Loan Information

Loan Balance
Your remaining student loan debt to be repaid.
Interest Rate
The amount that the lender charges in interest, expressed as a percentage.
Current Monthly Payment
The total amount of your monthly student loan bill.
Add Multiple Loans to Calculate

Step 2: Enter New Loan Information

New Interest Rate
Your updated interest rate after refinancing student loans.
The length of time you have to repay your student loan debt in full.

Add Multiple Loans

Insert additional loan

Step 3: See How Much You Can Save


Lifetime Interest


New Monthly



Current Loan New Loan Savings
Rate 6.7% 4.2% 2.5%
Lifetime Interest $37,520 $22,210 $15,310
Monthly Payment $1,146 $1,018 $128

Like what you see? Check your actual prequalified rates from the industry’s top lenders in just 2 minutes or less.

Approval criteria for student loan refinancing

Similar to other types of loans and financing, you need to prove your credit worthiness when you refinance associate degree student loans. Lenders will look at your past history to determine if you have shown an ability to repay your debt responsibly.

These are the primary requirements that you will need to ensure your loan is approved.

  • Credit score — The first thing any lender looks at is your credit score (and credit report). Your credit report takes all your financial history and condenses it down into a single three-digit number. That number tells lenders whether you have established credit as well as the quality of that credit. It will include mortgages, installment loans (or car loans), and credit card debt detailed by how much you owe and how diligent you have been about making payments. It will also contain information about employers, addresses, and any negative information (such as bankruptcies or foreclosures). In general, that number needs to be between 670 and 700 as a minimum to be considered for refinancing your student loans. As a rule, the higher your credit score the better the interest rate you will be offered when refinancing.
  • Income — For any type of loan, your lender wants to know that you have the ability to repay it. That means they want proof of consistent, dependable income in the form of a job (with paychecks) or a business (with Tax Form 1040 income). You can use all forms of income, including alimony, Social Security payments, rental income, or investment income.
  • Debt-to-income ratio (or DTI) — The natural offshoot of how the above-referenced requirements work together is a debt-to-income ratio or DTI. To find your DTI, you can add up all your debt payments (monthly) to include your mortgage/rent, loans, credit card payments, and then divide it by your total gross salary. This will give you a percentage. For lending purposes, this percentage should be 38% or higher.
  • Degree and School — During the interview process, they will ask you what school you attended and what degree you received. This is to ensure that you indeed went to college and received a valid degree.
  • Amount Owed — Most lenders won’t initiate a refinance loan for less than $5,000. If you have less than that amount, you may not be able to get a loan.

How do I get the lowest student loan refinance rates?

You want to compare amongst the lenders accepting associate degree student loans to see which is the best deal. To do that, you need to look at what each lender has to offer in interest rates, terms for repayment, and special programs that they offer.

In the past, you had to visit each lender’s website individually or call their quote department to get the most complete information about their current offers. You would have to fill out extensive application information and often wait a day or even two for a quote.

Then it was up to you to compare this information side-by-side before making a decision. No wonder most people just went with the first company that responded, not having the patience to wait until they received all the pertinent information.

Free eBook: How to Conquer Student Loans

Free eBook: How to Conquer Student Loans

How to compare student loan refinance quotes

Today, there is a lot of information online. In fact, there is so much that it can be more than a little overwhelming. How do you know who has the best rates? Best terms? Who will be responsive if you need questions answered? It’s all a guess unless you have a reliable guide to help you through the process.

Purefy understands that and has created a website that brings together the premier lenders in the industry who are anxious to propose a quote when you refinance associate degree student loans.

Since our inception, Purefy has developed and expanded their proprietary Rate Comparison Tool so that you can provide some minimal personal information that allows them to generate a pre-approved quote comparison from the top lenders in associate degree refinancing (Earnest, ISL, and PenFed). In just a few minutes, you can compare actual rates that will save you money with the loan term and monthly payment that you want.

There is no impact to your credit report when using the comparison tool. For purposes of these quotes, only a ‘soft pull’ is required which has no impact to your overall credit score. Once you are pre-approved and decide on a lender, a ‘hard pull’ will be done by the lender (but only one).

One of the best parts, Purefy only works with lenders that don’t have any loan-related fees. Yes, you read that right — these lenders have $0 fees and don’t charge an origination fee or an application fee to take out a new loan. That’s a big deal when you consider that mortgage companies charge between 3% and 5% of the total loan value in closing costs.

There is also never a pre-payment penalty associated with these lenders’ loan products. If you want to pay off your loan early, make larger payments, or double up on payments, there is no penalty to do so.

Why is now the right time to refinance?

Two reasons: 1) interest rates are at all-time historic lows that may not last forever, and 2) because of the interest being low, the market has never been this competitive.

  • Interest rates — Since the financial crisis in 2008, the Federal Reserve’s (the Fed) bank lending rate (or overnight rate) hovered around 0.25%. But the Fed, meeting nine times per year, had started to raise rates until at the end of 2019 rates were around 2.15%. Following the pandemic, the Fed reduced the rate to 0.00-0.25% where it has stayed. With that low of an overnight lending rate, banks have been able to charge interest rates as low as 1.88% for variable rate loans, discounting their own prime rate that is normally the Fed rate, plus 3.5%. Now, the question becomes, how long will interest rates stay this low. As the economy improves and inflation pressures mount, the Fed will be required to act by raising the rate that impacts the entire economy.

  • A competitive marketplace — One thing is for sure; the interest rate situation has created one of the most competitive markets in the financial sector for all types of new and refinanced loans. With that, lenders have come up with interesting and compelling ways to differentiate themselves from their competitors. They are also compelled to offer the best customer service. Be sure to compare each companies offers and opportunities. If you don’t have the credit or income to be able to take advantage of today’s refinance opportunities, then consider some alternative options.

How to refinance student loans with a cosigner

It happens — sometimes you don’t have adequate credit to get a loan outright, but still want to take advantage of today’s great lending environment. If that is the case, then consider these options to refinance associate degree student loans.

ISL Education Lending and SoFi both allow the use of a cosigner on associate degree student loans. That means that if you have a parent, grandparent, or friend with great credit, you can ask them to vouch for you by cosigning on a refinance loan.

This can be a big ask, so check with any lender that you might work with about a cosigner release. With a cosigner release, you can ask the lender to put the loan in your name and release the cosigner from further financial obligation when you have proven your creditworthiness. With most lenders, that’s after you have made 12 on-time payments in good standing.

For the cosigner, the total loan amount will be their responsibility if you can no longer make payments, plus it shows up on their credit report and affects the DTI for the entire life of the loan (unless there is a release). This can impact their purchasing power and limit their financial landscape overall. It’s important that your cosigner understands the full impact of this type of financial arrangement.

Ask questions — Purefy’s student loan experts

At any point during the process, you may have questions, and anticipating that, Purefy has developed a team of student loan refinance consultants that are poised to help you any way you require. These experts understand the refinance process top to bottom and can answer any questions you may have about your associate degree student loan refinance.

You will get expert advice whether you are simply curious about your options or are ready to jump in and get the job done. Schedule an appointment or just give them a call at 202-524-1115 to find out how refinancing works, to compare rates, or for help during the application process.

You will understand why they are a big part of why Purefy won the NerdWallet Best of Awards for Best Overall Student Loan Refinancing in 2021.

Let’s get started

Most student loan refinance lenders require at least a 4-year degree, but some – like Earnest, ISL, and SoFi – allow people to enjoy the benefits of refinancing with an associate degree.

If you have a good credit score (>670), solid income, and a strong DTI (<38%), you could save money by reducing your interest rate, plus choose the repayment term that best suits your lifestyle and circumstances.

At Purefy, you can compare rates between all three associate degree-friendly lenders in about two minutes if you meet the lending requirements. Then take time to look over the pre-approved quotes to determine which company would be the best fit for you.

And don’t forget to contact the Purefy student loan team of experts. These student loan advisors can answer your questions and walk you through the entire process.

If you thought that you couldn’t refinance with student loans from an associate degree, think again. Now is a great time to refinance associate degree student loans. Get the advantages of low, low interest rates with the benefits offered by industry-leading lenders eager to do business with you.

Try Purefy’s Rate Comparison Tool today!

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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 4.64% APR to 9.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 4.64% 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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