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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
- Citizens Bank: Best Overall
- Wells Fargo: Best Interest Rate
- SoFi: Best Benefits
- Discover: Best for No Fees
- CommonBond: Best Repayment Options
- Citizens Bank: Best for Borrowers Who Didn't Graduate
- PenFed Credit Union: Best for Spousal Loans
- Laurel Road: Best Parent Loan Refinancing
In addition to the best student loan refinance companies we've found, you can use Credible which is an online loan marketplace to compare offers. Details on each of our top picks are included below the loan comparison chart that follows.
When it comes to student loan refinancing and consolidation, Citizens Bank stands apart from other lenders. With competitive interest rates, multiple rate discounts, and beneficial perks, using Citizens Bank to refinance your student loans can help you save money and better manage your debt.
You can refinance as little as $10,000. If you have a bachelor's degree or below, the maximum amount you can refinance is $300,000. If you have a graduate degree, the maximum amount you can refinance is $500,000, making it a suitable choice if you have a large student loan balance.
As of May 21, 2020, Citizens Bank offers the following interest rates (rates include 0.25% autopay discount and 0.25% loyalty discount):
- Variable: 2.72% to 8.38%
- Fixed: 3.49% to 8.63%
You can choose a repayment term of five, seven, 10, 15, or 20 years. There is no penalty for repaying your loans early.
Citizens Bank offers borrowers some useful perks:
- Loyalty Discounts: 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 Discounts: 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.
Learn more about Citizens Bank student loans in our full review.
Of all of the lenders we looked at, Wells Fargo offers the lowest interest rates. As of May 15, 2020, the following rates—the lowest rates include a 0.25% autopay discount—apply:
- Variable: 2.50% to 8.49%
- Fixed: 3.74% to 9.99%
Wells Fargo offers loan terms of 5, 7, 10, 15, and 20 years. You must have at least $5,000 in student loan debt to qualify for a refinancing loan.
Wells Fargo is not currently refinancing federal loans so that borrowers can take advantage of the CARES Act benefits. Until the CARES Act expires on September 30, 2020, you can only refinance private student loans with Wells Fargo.
In addition to automatic payment discounts, Wells Fargo also has a customer discount. If you are a current Wells Fargo customer with a checking account or an existing Wells Fargo student loan, you can reduce your interest rate by 0.25%. If you have a Portfolio by Wells Fargo account, you can reduce your interest rate by 0.50%.
Learn more about Wells Fargo student loans in our full review.
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 three 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. If they apply for a loan and are approved, you'll get $300.
- Financial Advice: Make an appointment with a financial advisor to get free personalized guidance on investing, saving for retirement, and budgeting.
With SoFi, you can refinance as little as $5,000, 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.
There are no application or origination fees, and the following interest rates apply as of May 29, 2020 (autopay discount included):
- Variable: 3.21%-6.69%
- Fixed: 3.49% to 6.69%
Learn more about SoFi student loans in our full review.
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.
With Discover, you can qualify for a loan without a cosigner. As of May 15, 2020, the following interest rates apply (rates include autopay discount):
- Variable: 2.99% to 6.24%
- Fixed: 3.74% to 6.49%
You can refinance $5,000 to $150,000, 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.
Learn more about Discover student loans in our full review.
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 five 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.
As of May 15, 2020, CommonBond offers the following rates (rates include a 0.25% autopay discount):
- Variable: 3.22% to 6.25%
- Fixed: 3.22% to 6.45%
- Hybrid: 4.41% to 6.09%
If you didn't graduate from school, you'd struggle to find a lender willing to work with you. Citizens Bank is the only national lender we found that allows borrowers who didn't obtain a degree to refinance their loans.
To qualify for a student loan from Citizens Bank, you must not be currently in school, and your loans must be in repayment. If you didn't graduate, you need to make 12 on-time, consecutive payments on your loans before you can apply for refinancing.
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.
With PenFed, you can refinance between $7,500 and $300,000 of student loan debt. Loan terms range from five to 15 years, and there are variable and fixed interest rates. As of May 15, 2020, the following rates apply:
- Fixed: 3.23% to 5.53%
- Variable: 2.01% to 5.80%
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 these types of loans, refinancing can be a smart decision.
Laurel Road is one of the few lenders that offers refinancing for Parent PLUS Loans and allows you to transfer your loans into your child's name. 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.
Laurel Road offers variable and fixed-rate loans for parent loan refinancing. As of May 15, 2020, the following rates apply on parent refinancing loans, including a 0.25% autopay discount:
- Variable: 1.99% to 6.65%
- Fixed: 3.50% to 7.02%
You can refinance as little as $5,000, and there is no loan maximum.
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, Earnest has the lowest requirement. To qualify for a loan from Earnest, you'll need a credit score of at least 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.
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.
Experian. "Debt Reaches New Highs in 2019, But Credit Scores Stay Strong." Accessed May 15, 2020.
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Wells Fargo. "Student Loan Refinancing and Consolidation." Accessed May 15, 2020.
SoFi. "Student Loan Refinancing Rates & Terms." Accessed May 15, 2020.
Discover. "Consolidate Your Student Loans." Accessed May 15, 2020.
CommonBond. "Frequently Asked Questions About Refinancing." Accessed May 15, 2020.
CommonBond. "Forbearance—What It Is, and What CommonBond Offers." Accessed May 15, 2020.
CommonBond. "Refinance. Reset." (Accessed May 15, 2020)
Citizens Bank. "Can I Refinance If I Didn't Graduate From College?" Accessed May 15, 2020.
PenFed. "How to Consolidate Student Loans with a Spouse." Accessed May 15, 2020.
PenFed. "Legal Disclosures." Accessed May 15, 2020.
Federal Student Aid. "Understand How Interest Is Calculated and What Fees Are Associated With Your Federal Student Loan." Accessed May 15, 2020.
Laurel Road. "Can I Refinance a Federal Or Private Parent Loan I Took Out to Finance My Child's Education?" Accessed May 15, 2020.
Laurel Road. "Parent PLUS Loan Refinancing." Accessed May 15, 2020.
Laurel Road. "Student Loan FAQ." Accessed May 15, 2020.
Earnest. "Eligibility Guide." Accessed May 1, 2020.