In the United States, student loans are a national epidemic. According to Experian, Americans carry $35,620 in student loan debt, on average. If your loans have a high interest rate, your loan balance can quickly balloon out of control.
Student loan refinancing can be a smart strategy to manage your debt. By working with a private lender to take out a loan for your existing debt, you can lower your interest rate, reduce your monthly payment, or even pay off your loans early.
Best Student Loan Refinance Companies of April 2021
- Best Overall: RISLA
- Best Refinancing Marketplace: Credible
- Best Rates: Splash Financial
- Best Benefits: SoFi
- Best for No Fees: Discover Student Loans
- Best Repayment Options: CommonBond
- Best for Student Who Didn't Graduate: Citizens Bank
- Best for Spousal Loans: PenFed Credit Union
- Best for Parent Loans: Laurel Road
Best Overall : RISLA
The Rhode Island Student Loan Authority (RISLA) stands out from other student loan refinancing lenders because of its competitive rates and the substantial benefits it offers to borrowers.
Despite RISLA's name, borrowers can refinance student loans that were used to attend colleges nationwide. You can refinance between $7,500 and $250,000. There are no application or origination fees. Term options include 5, 10, and 15 years. All refinancing loans have fixed interest rates, and the lender offers the following interest rates:
- Fixed rates: 3.19% to 5.59% (with 0.25% Autopay discount)
RISLA's student loan refinancing program has a wide range of benefits that go beyond what you typically expect from private lenders. Its protections include:
- Income-based repayment: If you can't afford your payments, you may qualify for RISLA's income-based repayment (IBR) plan. With this option, RISLA will base your monthly payment on your income and family size, potentially reducing your payments.
- Total and permanent disability: Private lenders typically don't offer loan discharges in the case of disability; RISLA is an exception. If you are unable to work because of a physical or mental impairment, you may qualify for total and permanent disability discharge. If eligible, your loan balance will be forgiven upon submission of medical documentation.
- Graduate school deferment: If you decide to attend graduate school, you can defer your loan payments for up to 36 months.
- Forbearance: If you are unemployed or have another emergency, you may be eligible for forbearance. If you qualify, you can postpone your payments for up to three months at a time, for up to 12 months over the life of your loan.
Read the full review: RISLA Student Loans
Best Refinancing Marketplace : Credible
Before refinancing your student loans, it's wise to get rate quotes from several different lenders to ensure you get the best terms. While you can do that manually on your own, there's a simpler way: you can go through a refinancing marketplace.
With Credible, you submit your information just once and get quotes from multiple lenders, without affecting your credit score. You can compare interest rates and loan terms from up to 10 top lenders and choose the best one for your needs. Once you choose a loan, you can complete your application online.
You can use Credible to get quotes to refinance federal loans, private loans, and even Parent PLUS loans.
Credible offers a best rate guarantee. If, after receiving prequalified options for student loan refinancing, you receive an offer for a better rate from a lender not on the Credible website and refinance with that lender at a lower rate, you'll get a $200 Best Rate Reward.
The service is completely free to use. Instead of charging user fees, Credible makes money through referral commissions if you qualify for a loan through its website. Credible states that most of its lending partners look for a credit score of 670 to 700 for student loan refinancing.
Read the full review: Credible
Best Rates : Splash Financial
Out of all the lenders we reviewed, Splash Financial has the lowest interest rates for student loan refinancing. The lender offers the following rates (lowest rate includes 0.25% Autopay discount):
- Variable: 1.89% to 5.51%
- Fixed: 2.63% to 6.25%
You can choose a loan term of 5, 8, 10, 12, 15, or 20 years. You must have at least $5,000 in student loan debt to refinance with Splash Financial, and there is no loan maximum. The lender does not charge any application fees, origination fees, or prepayment penalties. And, many of Splash's lending partners offer cosigner release after receiving 12 consecutive on-time payments on your loan.
Read the full review: Splash Financial Student Loans Refinancing
Best Benefits : SoFi
If you want a refinancing lender that offers comprehensive benefits, consider SoFi. The company provides robust perks to refinancing borrowers, including:
- Unemployment Protection: If you're laid off from your job, you can postpone making payments for 3 months at a time, for a maximum of 12 months.
- Career Coaching: Get access to a career coach to get advice on asking for a raise, preparing for a promotion, or building your personal brand.
- Referrals: Refer a friend to SoFi's loan program. You'll both earn $10 when your friend checks their rate. If they apply for a loan and are approved, you'll both get $300 more.
- Financial Planning: Make an appointment with a financial planner to get free personalized guidance on investing, saving for retirement, and budgeting.
With SoFi, you can refinance as little as $5,000 (although required minimums could be higher in certain states), and there is no maximum loan amount. To be eligible for a loan, you need to have graduated with at least an associate's degree. SoFi does not publicly list its minimum income or credit requirements. However, it will consider financial history, credit score, and income sources when evaluating your application.
There are no application or origination fees, and you can choose from repayment terms of 5, 7, 10, 15, and 20 years. Variable rates are capped at 8.95% APR for terms of 5, 7, or 10 years, and at 9.95% APR for terms of 15 or 20 years. SoFi offers the following fixed and variable rates (all rates include 0.25% Autopay discount):
- Variable: 2.24% to 6.09%
- Fixed: 2.99% to 6.88%
Learn more about what rates may be available to you with SoFi and compare offers from multiple lenders at Credible, or learn more about SoFi student loans in our full review.
Read the full review: SoFi Student Loans
Best for No Fees : Discover Student Loans
While some lenders charge origination, application, or late fees, Discover is different. It charges no fees at all, even if you miss a payment. With no added fees, the only charge you have to worry about is the interest that accrues on your loan.
Discover offers the following interest rates for student loan refinancing (lowest rates include Autopay discount):
- Variable: 1.87% to 5.87%
- Fixed: 3.49% to 6.99%
You can refinance as little as $5,000 for a term of 10 or 20 years, and you can choose to refinance your loans while you're still in school. To qualify for a loan, you must be at least 18 years old, pass a credit check, and have verifiable income. With Discover, you may qualify for a loan without a cosigner. However, applying with a creditworthy cosigner will likely earn you a lower interest rate.
Read the full review: Discover Student Loans
Best Repayment Options : CommonBond
If you're looking for a lender that offers flexible repayment options, CommonBond is hard to beat. Two features make CommonBond stand out from other lenders:
- Hybrid Loans: With a hybrid loan, the first 5 years of the loan have a fixed interest rate. After that, the loan will have a variable interest rate. This approach is a good idea if you want to take advantage of a low-interest rate and pay off your loans as quickly as possible, but also want the security of a fixed-rate loan.
- Forbearance: If you're dealing with financial difficulties after losing your job or receiving a medical diagnosis, you can postpone making payments on your loans for up to 24 months over the length of your loan—the longest forbearance option offered by any lender. Being able to skip payments without entering into default can give you time to get back on your feet.
There are no application or origination fees, and this lender's missed payment penalties are reasonable—late fee of 5% or $10 (whichever is less) and returned check fee of $5.
Term lengths include 5, 7, 10, 15, and 20 years. Borrowers with the best credit profiles will earn the lowest interest rates. CommonBond offers the following rates (all rates include 0.25% Autopay discount):
- Variable: 2.50% to 6.85%
- Fixed: 2.59% to 6.74%
- Hybrid: 2.98% to 6.57%
Read the full review: CommonBond Student Loans
Best for Student Who Didn't Graduate : Citizens Bank
If you didn't graduate from school, you'd struggle to find a lender willing to work with you on refinancing your loan. Citizens Bank is the one of the few national lenders that allows borrowers to refinance without a degree.
Citizens Bank offers borrowers some other useful perks:
- Loyalty Discount: If you have another account with Citizens Bank, such as a checking or savings account, you can qualify for a 0.25% reduction on your interest rate.
- Automatic Payment Discount: Sign up for automatic payments and get another 0.25% off your interest rate.
- Cosigner Release: After making 36 consecutive, on-time payments, you may qualify to have your cosigner removed from your loan.
You must refinance a minimum of $10,000, and repayment terms include 5, 7, 10, 15, and 20 years. There are no application or origination fees. Citizens Bank offers the following interest rates (rates include 0.25% Autopay discount and 0.25% loyalty discount):
- Variable: 2.24% to 8.90%
- Fixed: 2.97% to 9.15%
To qualify for refinancing a student loan with Citizens Bank, you must not be currently in school, and your loans must be in repayment. If you didn't graduate, you need to have made 12 on-time, consecutive payments on your loans before you apply for refinancing.
Read the full review: Citizens Bank Student Loans
Best for Spousal Loans : PenFed Credit Union
If you and your spouse both have student loans, you may want to combine your debt together. It will streamline your payments, so you have just one monthly payment and one loan servicer to remember.
While most lenders will allow you to cosign your spouse's refinancing application, the only lender that actually offers spousal loan refinancing—where the loans are consolidated together—is the PenFed Credit Union.
To determine your eligibility and to set your interest rates, PenFed will look at your combined income. If one person is a stay-at-home parent, this approach can be beneficial and help you get a lower interest rate than you'd receive on your own. For loans up to $150,000, the minimum income is $25,000, and, unless your income is at least $42,000, a cosigner with an income of $42,000 is required. For loans exceeding $150,000, either you or your cosigner must have an annual income of $50,000.
With PenFed, you can refinance between $7,500 and $300,000 of student loan debt. There are no application or origination fees. Loan terms range from 5 to 15 years, and there are variable and fixed interest rates. Variable rates for 5 and 8-year terms will never exceed 9.00% and rates for 12 and 15-year terms will be capped at 10.00%. PenFed offers the following rates:
- Fixed: 2.99% to 5.15%
- Variable: 2.15% to 4.45%
Read the full review: PenFed Student Loan Refinancing
Best for Parent Loans : Laurel Road
If you took out student loans to pay for your child's education, you might be stuck with a high interest rate. Federal Parent PLUS Loans have the highest interest rate of any federal loan. If you have this type of loan, refinancing can be a smart decision.
Laurel Road is one of the few lenders that offers refinancing for Parent PLUS Loans (and private parent loans) and allows you to transfer your loans into your child's name, if you choose. By refinancing your debt into your child's name, you eliminate your obligation to repay the loan, and your child is responsible for repaying it instead.
As an added perk, you will receive $400 if you refer a friend and they refinance with Laurel Road. You don't even need to be a customer yourself to be eligible for this referral reward.
You must refinance a minimum of $5,000, and there is no maximum amount. Your term length can be customized to anything under 20 years. Although Laurel Road does not recommend a minimum credit score, they state that their low rates are made possible by the fact that they select the most creditworthy borrowers, particularly "working professionals."
Laurel Road offers variable and fixed-rate loans for parent loan refinancing. The maximum variable rate for 5- and 10-year terms is 9%, and for 15- and 20-year loans, 10%. The following rates apply on parent refinancing loans, including a 0.25% Autopay discount:
- Variable: 1.89% to 5.90%
- Fixed: 2.80% to 6.00%
Read the full review: Lauren Road Student Loans
Should You Refinance Your Student Loans?
To decide whether or not to refinance your student loans, look at your current interest rates. If you have high-interest student loans, you could pay thousands in interest charges over the length of your loan. If you have good credit and stable income, you could refinance your debt and qualify for a lower interest rate, helping you save money.
How Do You Refinance Student Loans?
To refinance your student loans, apply for a loan from a private lender for the amount of your existing debt. Once approved, you can use the loan to pay off your old loans. You can refinance both federal and private student loans, consolidating them together. After that, you'll have just one loan to manage, with only one monthly payment to remember.
What Credit Score Do You Need to Refinance Your Student Loans?
Not all lenders publicly list their minimum credit score requirements. Of the lenders that we looked at while researching this article (who actually disclose this information), Earnest has the lowest requirement. To qualify for a loan from Earnest, you'll need a minimum credit score of 650.
If your credit score is lower than that, you may still be able to qualify for a loan if you have a cosigner on your application.
What Is the Difference Between Student Loan Consolidation and Student Loan Refinancing?
Student loan consolidation and student loan refinancing may sound similar, but they're actually very different terms.
Student loan consolidation refers to federal Direct Consolidation Loans. With a Direct Consolidation Loan, you can combine your eligible federal student loans together. Repayment terms can be as long as 30 years, and your interest rate is based on the weighted average of your current interest rates.
With student loan refinancing, you work with a private lender to take out a loan for the existing debt you have. When you refinance, you'll lose federal loan benefits. However, you can qualify for a lower interest rate and save money over time.
Can You Refinance Federal Student Loans?
While you can refinance federal student loans—and even combine them with your private student loans—there are some drawbacks to consider.
When you refinance your federal education debt, you'll lose out on federal benefits and protections. For example, you'll no longer be eligible for income-driven repayment plans, Public Service Loan Forgiveness, or federal forbearance or deferment programs.
Refinancing may be worth it if your goal is to save money, but think carefully about the downsides before submitting your loan application.
Is It Worth It to Refinance Student Loans?
In many cases, student loan refinancing is an effective strategy for managing your debt. Many student loan refinancing lenders don't charge any origination or application fees. If you have good credit, you can qualify for a loan with a lower interest rate without paying any added fees. Over time, you can save thousands of dollars and pay off your loans years ahead of schedule.
Refinancing Your Student Loans
Refinancing your student loans can be a great way to save money and accelerate your debt repayment. There's no one perfect lender for everyone, so shop around and get rate quotes from multiple lenders so you can find the best deal.
How We Chose The Best Student Loan Refinance Companies
Research for this article encompassed private student loan lenders of undergraduate private student loans (as well as companies that refinance student loans) narrowed down from national banks, credit unions, and lenders. The criteria for measuring each lender included all available APR ranges for these loans, fees charged, repayment plans and hardship options offered, and the inclusion of additional features and benefits.