How Often Should You Refinance Student Loans?

You can refinance as often as you like as your finances improve or rates fall.
Anna Helhoski
By Anna Helhoski 
Edited by Des Toups
How Often Can I Refinance Student Loans?

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You can refinance your student loans as often as you’d like. It can make sense to refinance multiple times — especially when your finances improve or private lenders decrease their rates.

Refinancing typically doesn’t carry any origination fees or other costs, and student loans don’t come with prepayment fees. If you can find a lower interest rate, you can save yourself money each time.

Why you should refinance multiple times

Refinancing means you combine your student loans into a new private loan with a lower interest rate. A lower rate will save you money over time by decreasing the amount you pay in interest. If you refinance again at an even lower interest rate, you can save more.

For example, say you graduate with private student loan debt of $40,000 at an 11% interest rate. You’ll make $551 payments every month for 10 years and pay $26,120 in interest by the time the loan is repaid.

But even without a huge rate decrease, you could save money by refinancing student loans immediately after college. For instance, you'd pay $76 less a month and $9,143 in interest over 10 years by refinancing to an interest rate of 7.5%.

You may eventually qualify for a better rate as you begin earning more money and building your credit, or if interest rates drop. If you refinanced the loan a second time at 4% after two years had passed, you’d save an additional $68 a month and $6,507 in interest over an eight-year term.

Is it bad to refinance student loans multiple times?

It’s not bad to refinance student loans multiple times if you're going to save money or get a more manageable payment.

Refinancing federal loans will cost you access to loan forgiveness programs and income-driven repayment options. But if you already gave up those benefits, refinancing private student loans again can be a no-brainer.

The primary downside to refinancing often would be that lenders do a “hard” credit check before approving each new loan, and too many inquiries can lower your credit scores. Still, it's in your best interest to shop around for the lowest rate possible.

You can avoid a bigger ding on your credit than necessary by limiting your shopping to a short window — typically up to 45 days — or prequalifying with multiple lenders before officially applying. Prequalifying won't impact your credit score, but it will let you know what rate you qualify for.

Readers also ask

You can refinance both federal and private student loans. The federal government doesn’t offer student loan refinancing, but you can refinance federal loans through private lenders. To qualify, you typically need good credit, positive credit history and enough income to afford debt payments and expenses.

You should refinance your student loans if you would save money, you can qualify and your finances are stable. To qualify for the lowest rates — and the biggest savings — you’ll need an excellent credit score, clean credit history and enough income to support your debts and expenses.

If you have federal loans and are struggling to make consistent payments, refinancing is not for you. Instead, consider federal student loan consolidation or an income-driven repayment plan.

Yes, if you qualify for a lower interest rate. With a lower rate, you’ll have a lower monthly payment, freeing up cash for other expenses. You could also choose a shorter repayment schedule, which will help you become debt-free faster and save money in interest long-term.

You can refinance with a bank, credit union or online lender. Find the lender that offers you the lowest rate, and apply.

If you have bad credit or low income, the lender may require you to apply with a qualifying co-signer. If you're facing financial difficulties, refinancing isn’t your best option. Instead, speak with your lender or servicer about other ways to lower your payment or interest rate.

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