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Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She’s a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications, and she's been writing for Compare.com since 2023.
Mandy uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content that helps readers make smarter insurance choices that have a positive effect on their budgets and finances.
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Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
John Leach is a licensed insurance agent who reviews and fact-checks articles for Compare.com. John has several years of experience reviewing and editing various insurance topics, and he also holds a valid personal lines producer license from the California Department of Insurance (NPN #20461358).
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If you’re considering refinancing student loans, you may be looking to lower your interest rate, reduce your monthly payment, or combine multiple loans into one.
Refinancing your student loans may help you save money. But there’s a major risk if you have federal student loans. Refinancing with a private lender means giving up federal benefits, such as income-driven repayment and loan forgiveness.
This article is for people with high-interest loans and federal loan borrowers who want to evaluate whether refinancing could lower their rates. Use this guide to determine whether refinancing makes sense, and download our free Refinance Audit Spreadsheet to run the numbers yourself.
Refinancing federal loans permanently removes access to forgiveness programs, payment relief options, and income-driven repayment plans.
If you qualify for a lower interest rate, refinancing can save you thousands in interest over the life of the loan.
A refinance audit tool can help you compare offers to your current loans to see if refinancing is worth it.
When you refinance student loans, you replace your existing student loan debt with a brand-new private loan.
Here’s how it works: A private lender evaluates your credit history, income, and overall financial profile. If approved, the lender pays off your current loans. You then make a single loan payment each month on the new loan, which comes with its own repayment term and, ideally, a lower rate.
A student loan refinance can lock in a better rate, adjust your loan term, or both. Refinancing differs from the federal Direct Consolidation Loan, which combines eligible federal loans into a single payment with a weighted-average fixed rate and may extend your repayment period.[1]
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Student loan refinancing can be a smart financial move, but only for the right borrower. If your goal is to cut interest costs and you don’t need federal safety nets like deferment, forbearance, or income-driven repayment options, refinancing can work in your favor.
You’re a strong candidate if you have:
High-interest private loans (6%+)
High-interest federal loans (PLUS loans) and a stable, high-income private sector job (no PSLF)
A credit score above 650 (ideally 700+)
Low debt-to-income ratio
No plans to return to school
At the end of the day, refinancing is a numbers game. If your new interest rate is lower than your current rate and you don’t have to pay origination fees on the new loan, you save money by refinancing.
Refinancing private student loans can save you money, but it isn’t the right choice for everyone. Before jumping in, consider whether your federal loans provide benefits you’d be giving up and whether refinancing is worth giving up those protections.
Use the following table to see if refinancing could cost you more than it saves.[2]
Considerations  | Should You Refinance? | Why? |
|---|---|---|
| You’re working toward Public Service Loan Forgiveness | No | You’ll lose your eligibility for forgiveness |
| You’re on an income-driven repayment plan | No | You’ll lose flexible payment options if your income goes down |
| You’re still holding out for broader student loan forgiveness legislation | No | Refinancing locks you into private loans with no federal protections, including loan forgiveness |
| You expect periods of unemployment | No | Private loan servicers may not offer options to pause student loan payments |
| Your loans qualify for federal interest subsidies | No | You’ll lose federal interest benefits |
| You may need generous deferment or forbearance | No | Private lenders don’t have to offer hardship relief |
| You plan to return to school | No | Private lenders may not offer in-school deferments or flexible repayment options |
| You’re an active-duty servicemember | No | You’ll no longer qualify for a Servicemembers Civil Relief Act (SCRA) interest-rate reduction |
If any of these apply to you, student loan refinancing probably isn’t right for you.
Many online calculators exist, but most are marketing tools designed to promote lender products. That’s why we created the Student Loan Refinance Audit spreadsheet. It’s a free, easy-to-use tool to help you see if refinancing actually saves you money and how long it takes to break even.
The sheet automatically calculates your:
Lifetime interest savings
Monthly payment savings
Break-even point
Total cost difference
Download the spreadsheet for free and run the numbers yourself before making a decision.
See how much you could save by refinancing your student loans.
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The federal government sets fixed student loan interest rates for Direct loans. Current rates are 6.39% for undergraduate loans, 7.94% for graduate loans, and 8.94% for PLUS loans.[3] Private refinance APRs typically range from about 3.5% to 10%, depending on factors like your credit profile, your income, and the lender you choose.
Federal student loan interest rates reset each year on July 1 and are based on the previous year’s 10-year Treasury note yield. Private refinance rates vary based on credit, income, and market conditions and can change weekly. So it’s important to check current rates before applying.
Refinance loans can come with fixed or variable rates. Fixed-rate loans may have higher rates, but they offer predictable payments for the life of the loan. Variable-rate loans usually start with low rates but are riskier because rates can go up if market rates increase.
For most borrowers, a fixed-rate loan is safer unless you plan to pay off a variable loan within the next two years.
No single lender is perfect for everyone. The best refinance option depends on your career path, credit history, and loan balance. To save you time, we researched top lenders. We selected one partner lender and one independent pick for the following common borrower categories.
Doctors and lawyers often have substantial six-figure loan balances. Medical students who graduated in 2025 hold a median of $215,000 in education debt, according to the Association of American Medical Colleges (AAMC).[4] Lenders that offer residency programs and high loan amounts are the best fit for refinancing.
Our top picks for medical and law professionals refinancing education loans are Earnest (partner) and Laurel Road.[5][6]
Loan Factor | What to Know |
|---|---|
| APR | 3.71%–9.99% |
| Minimum credit score | 665 |
| Loan maximums | $500,000 |
| Eligibility requirements |
|
| Fees | None |
Loan Factor | What to Know |
|---|---|
| APR | 4.99%–9.30% |
| Minimum credit score | 670 |
| Loan maximums | Up to 100% of outstanding loan balance |
| Eligibility requirements |
|
| Fees |
|
Some lenders allow parents to refinance Parent PLUS loans under the child’s name after graduation. Our preferred picks for parents are our partner lender, Education Loan Finance (ELFI), and Citizens Bank.
ELFI assigns a personal loan adviser to each applicant and offers financial hardship forbearance for up to 12 months, a rare benefit from private lenders. Citizens Bank offers up to 0.50% off the rate for loyalty and for setting up automatic payments and a 20-year repayment schedule.[7][8]
Loan Factor | What to Know |
|---|---|
| APR | 4.29%–8.44% |
| Minimum credit score | 680 |
| Loan maximums | $500,000 |
| Eligibility requirements |
|
| Fees |
|
Loan Factor | What to Know |
|---|---|
| APR | 6.30%–9.78% |
| Minimum credit score | Not publicly disclosed |
| Loan maximums | $500,000 |
| Eligibility requirements |
|
| Fees | No application fee |
Borrowers with credit scores of 750 or higher and steady incomes qualify for the lowest student loan refinance rates and payments. Our top picks are LendKey (partner) and RISLA.
RISLA offers payment forbearance, a 0.25% auto-pay rate discount, and income-based repayment plans.[9] LendKey is a marketplace of banks and credit unions that helps you find the best rate and refinance lender for your education loans. Discounts, benefits, and rates vary by lender.[10]
Loan Factor | What to Know |
|---|---|
| APR | 4.39%–9.24% |
| Minimum credit score | 750 |
| Loan maximums | $300,000 |
| Eligibility requirements |
|
| Fees | None |
Loan Factor | What to Know |
|---|---|
| APR | 3.99%–8.04% |
| Minimum credit score | 750 |
| Loan maximums | $250,000 |
| Eligibility requirements |
|
| Fees | None |
Find the right lender and rate for your needs.
Refinancing is similar across lenders, though some may have different qualifications. It’s a good idea to check what criteria you need to meet before applying. Keep in mind that if something doesn’t seem right, you can back out before the loan funds are disbursed.
Take these steps to refinance your student loans:
Most lenders offer a prequalification process, which gives you an estimated rate, terms, and student loan payment amount without affecting your credit score.
Don’t focus on just the monthly payment. Consider the APR, loan term, and total interest over the life of the loan. Longer terms could increase your total loan costs.
Complete the loan application using your personal and existing loan information. Be ready to provide documentation like your most recent pay stubs, student loan statements, and government ID.
Some lenders allow a short cancellation period after you sign your loan agreement, but before the lender disburses the funds. It typically takes a few days to a couple of weeks for the new lender to disburse funds directly to your existing loan servicers.
Continue paying your current loan payments until your new lender has paid them off.
The new lender pays off your old loans directly, leaving you with one streamlined payment.
Here are answers to common questions people ask about refinancing student loans.
Refinancing can save you money if you have good credit, a stable income, and high-interest student loans. But you’ll likely lose federal protections like forgiveness, income-driven repayment, deferment, and forbearance.
Yes. The average bachelor’s degree recipient has $29,560 in student debt, so $100,000 is more than three times the average.[11] That said, high-earning professionals like doctors and lawyers often graduate with well over $100,000 in student debt.
A fixed interest rate stays the same for the life of the loan, so payments remain constant throughout the term. A variable rate can rise if the market rate increases, leading to higher payments later in the term.
Lenders make a hard inquiry on your credit when you apply to refinance your student loans, which can temporarily lower your credit score. Making on-time payments can improve your credit score by strengthening your payment history.
Yes. You can refinance student loans multiple times if your credit, income, or interest rates improve. Each refinance resets your loan terms and rate, so calculate costs first to ensure it’ll actually save you money.
Yes, refinancing creates a new loan with new terms. You can shorten your loan to pay it off faster or extend it to lower your monthly payments, though longer terms may increase your total loan costs.
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Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She’s a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications, and she's been writing for Compare.com since 2023.
Mandy uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content that helps readers make smarter insurance choices that have a positive effect on their budgets and finances.
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
Licensed property and casualty insurance agent
10+ years editing experience
NPN: 20461358
John Leach is a licensed insurance agent who reviews and fact-checks articles for Compare.com. John has several years of experience reviewing and editing various insurance topics, and he also holds a valid personal lines producer license from the California Department of Insurance (NPN #20461358).
