The best student loan refinance lenders of November 2023

SoFi

Best student loan refinance lender

Earnest

Best for payment flexibility

College Ave Student Loans

Best for customer service

First Tech Federal

Best for credit union borrowers

NaviRefi

Best for fair credit borrowers

Laurel Road

Rhode Island Student Loan Authority

Best for income-based repayment

EdvestinU

Best for nongraduates, low-income borrowers

PNC Bank

Best for rate discounts, graduate-degree holders

INvestEd

Best for Indiana residents, students

Our picks at a glance

Why refinance your student loans?

• Customize your payment amount. When you refinance, you can choose a new repayment term, or the timespan over which you pay off your debt. Commonly available terms range from five to 20 years. Just be mindful that the longer your term, the more time there is for interest to accrue and capitalize on your balance.
• Combine multiple accounts. Refinancing combines your original student loans into a single loan with a new (hopefully lower) interest rate. Because of this, however, you might exclude federal loans from your refinancing application if you want to keep federal loan-exclusive benefits like income-driven repayment plans and paths to loan forgiveness.
• Score a lower rate. If you have good-to-excellent credit, you could access a lower interest rate than the average APR of your existing loans, saving money in the long term. Of course, available rates vary depending on when you apply and were higher in late 2023 than previous years. Your credit strength will also impact the rates you’re offered.
• Potentially get out of debt faster. If you refinance to a shorter loan term, you could be debt-free on a faster timeline. But keep in mind that shorter terms typically mean higher monthly payments. Check your budget before committing to refinancing.

What is student loan refinancing?

Student loan refinancing is the process of borrowing a new loan, with its own rates and terms, to pay off existing education debt. The result is a single monthly payment to one loan servicer, and depending on the new terms, you might save money on interest.

Let’s say you have a combined $50,000 in student loans, there are 10 years left on your terms and your average APR is 10.00%. Over that 10-year period, you’d pay about $29,290 in interest. But if you were to refinance to a 6.00% APR and a 10-year term, you’d only pay $16,612 in interest. Your total interest would shrink even more if you opt for a shorter term.

But be aware of the trade-off: The shorter the repayment term, the higher the monthly payment. So you’ll want to make sure you can afford the monthly dues before locking in that term. (If a lower monthly payment is your goal, that may mean paying more over the long term.)

Student loan refinancing vs. a Direct Consolidation Loan

Student loan refinancing is somewhat similar to a federal Direct Consolidation Loan since they both involve combining multiple loans into a new one. But there are important distinctions:

• Student loan refinancing is offered by private companies, like banks and online lenders, and permanently turns loans into a new, private loan. If you include federal loans in your refinance, those would lose federal borrower protections. Your creditworthiness determines the terms you’re offered.
• Direct Consolidation Loans are offered by the Department of Education and can only be used to group certain federal loans. Plus, rather than your creditworthiness determining the interest rate and term, consolidating averages your existing rates (rounding them up to the nearest one-eighth of 1%). Also, using this loan could automatically make your federal loans eligible for certain borrower protections, like income-driven repayment.

How to refinance your student loans

Before you start looking for the best student loan refinancing lenders, consider whether refinancing is right for you, and if so, what your specific goals are.

First, look at your broader finances, including your existing loan rates and terms, debt obligations and cash flow. Using a budgeting app can help, but you can also go through your bank statements to get an idea of where you stand. Also review your credit reports (via AnnualCreditReport.com) and scores (via your financial institution, one of the major credit bureaus or third-party services).

During this process, ask yourself the following questions:

• What kind of loans do I have? Refinancing private student loans typically doesn’t come with significant risks. But if you have federal loans, you may want to exclude those from your refinancing application so you don’t lose government-exclusive protections like income-driven repayment plans and paths to loan forgiveness.
• Am I planning on borrowing more within the next year or two? If so, you may want to be more conservative with your credit inquiries. Keep in mind that new credit inquiries stay on your record for two years, though credit score models may not factor in inquiries that are older than a year. In general, the fewer you have, the better.
• What is my credit score? Lenders typically want to see a score of at least 650 to qualify, though each lender will have their own requirement. If you’re not there yet, you may want to take time to boost your score first. You could also apply with a creditworthy cosigner, but understand that they’d be on the hook for repayment if you don’t follow through.
• What’s my income, and is it stable? Lenders will also have minimum income requirements, but another vital factor here is whether you’ll be able to keep up with your refinance loan payments. Missing even one could damage your credit, so you’ll want to understand exactly how much wiggle room you have based on your current income in comparison to your expenses. Use a free student loan calculator like Calculator.net’s.
• What is my main goal with refinancing? If you want to save the most money possible, you’d want the lowest possible APR and the shortest term. That would usually come at the cost of higher monthly payments. But for someone who wants to save on monthly costs, a longer term would be more appealing.

Tip: If you determine that refinancing is wise for your situation, start comparing various lenders, prioritizing those that offer pre-qualification (the ability to confirm eligibility and check rates without a hard credit check that can negatively affect your credit scores).

Pros and cons of refinancing student loans

Student loan refinancing can net various advantages, but qualifying can be an uphill climb. Lenders each set their own eligibility requirements, which can range from a specific credit score and income to living in a specific state or earning a certain type of degree.

But the biggest con is that refinancing irreversibly strips federal loans of Department of Education-provided protections, such as access to repayment pauses (deferments and forbearances), income-driven repayment plans and forgiveness programs. So if you think you might benefit from the government safety net, think twice about refinancing your federal loans.

Should you refinance your student loans?

If refinancing can help you accomplish your financial goals or get out of debt faster, it can be a helpful tool. Your specific situation is going to have a big impact on whether refinancing is right for you.

Let’s say you have $25,000 in private student loans with an average APR of 10.00% — and you have bad credit. Your potential savings would have to come from a lower APR or a shorter repayment term. A cosigner could help, so you could prioritize lenders that offer that option.

But all in all, your loans are already private, so there are fewer risks in consolidating them with another (or the same) lender.

Now, let’s say you only have federal loans, you’re keeping up with your payments and you have a stable, high-paying job. In that case, refinancing would mean giving up government-exclusive protections like income-driven repayment — but that might not be an issue to you if your high income means that those plans aren’t useful to you. Similarly, if you work in an industry that doesn’t connect with federal loan forgiveness programs, you might feel like you wouldn’t miss anything by refinancing.

Still, you could want access to federal loan deferment and forbearance options (that would allow you to pause your loans for months at a time for various reasons, such as running into financial hardship or unemployment). In this case, if refinancing still sounds appealing, you might investigate private lenders that offer generous deferment and forbearance options — but can also provide the rates and terms that would help you save money overall.

Bottom line: There’s no black-and-white answer as to whether you should refinance student loans. You’ll have to consider your financial situation, understand your repayment goals and do the math to figure out if refinancing would help you accomplish them. As always, though, be wary of refinancing federal loans given the government’s expansive safety net.

Tips for comparing student loan refinance lenders

Every student loan refinancing product is different, so it’s important to be thorough when shopping around. That way, you’ll find one that best suits your needs. Here’s how to start:

• Compare APRs: The annual percentage rate (APR) is a better measure of your total loan costs than the interest rate because it includes things like origination fees.
• Look into customer service: A refinancing lender is likely going to be in your life for years to come, so it’s important to find out whether they provide good customer service. Online reviews can help, though they should be taken with a grain of salt since reviews tend to attract either those who had an extremely positive or extremely negative experience. Instead, give a lender’s customer support a test drive: If they’re not helpful before you borrow, they may not be afterward either.
• Know the minimum credit score requirements: Some lenders won’t disclose this — in which case pre-qualification is your best bet to understand your potential terms — but if it’s available, it can help you understand if you’re likely to qualify. Alternatively, it might nudge you to pause your refinancing application until you can raise your score.
• Consider hidden costs: The APR will include some costs other than the interest rate, but it can’t take things like late fees and non-sufficient funds fees into account. And while no one plans on facing those kinds of fees, it’s always a good idea to understand what would happen if you were to miss a payment or a paycheck is unexpectedly delayed.
• Use pre-qualification: This is going to be the most useful tool for directly comparing lenders since it can show you the terms and rates that you could qualify for with each lender. However, note that these are not formal offers, so your actual rates and terms may vary. Still, it’s generally a useful tool. Once you get your results, plug those into a student loan payment calculator to see how the costs compare.

Methodology

Our editorial team bucketed 27 key features of a top-performing student loan refinancing lender into five categories. We then put ourselves in the shoes of borrowers to understand which of these categories were most important. Given that refinancing has the potential to offer significant savings, we weighed the “Rates” category heaviest. And since many borrowers elect to refinance, in part, to ease their payment headaches and find a more helpful lender, we also gave significant weighting to the “Repayment” and “Customer experience” categories. How lenders fared across these categories determined their out-of-5 star rating.

Rates (30%)

Our editorial team collected lenders’ lowest and highest fixed and variable rates, and reviewed borrowers’ options for discounting their APR (by setting up automatic payments, for example) and checking their potential rate via pre-qualification. Student loan refinancing companies that don’t offer competitive rates, discounts or the ability to pre-qualify fared poorly in this critical category.

Loan details (15%)

Our research here went one level deeper into each lender’s refinancing product, cataloging fees (say, for origination and late payments) and minimum and maximum borrowing amounts. We also got granular, rewarding lenders that allow borrowers to transfer federal Parent PLUS Loans into their name.

Eligibility (15%)

Qualifying for refinancing can be difficult, but there are enough differences between lenders’ underwriting criteria to highlight those that have more accessible standards. We awarded higher ratings to companies that share these criteria publicly, have lower minimum credit score requirements and offer a cosigner option. Lenders that lend to nontraditional borrowers, such as noncitizens and nongraduates, received bonus points.

Repayment (25%)

Here, we asked a basic question of lenders: “Do you offer repayment flexibility to your customers?” The answer was informed by whether refinancing companies provide various term options, deferments and forbearances (and their duration), alternative repayment plans and loan discharges in cases of the borrower’s disability or death.

Customer experience (15%)

Given that a lender (or its loan servicer) can make repayment even more challenging for borrowers through potentially deceptive practices or poor customer support, we attempted to weed out refinancing companies that don’t provide a positive experience. We looked at lender websites to measure the availability of their customer service, and we reviewed data from independent organizations like the Better Business Bureau and the Consumer Financial Protection Bureau to determine the satisfaction level of customers past and present.

What didn’t make the cut

The 10 best student loan refinancing lenders in our eyes are listed above. Below are five popular refinancing lenders that didn’t fare as well in our scoring.