Know how COVID-19 impacts your student loans

See your options for student loan relief, and learn if it's the right time to refinance. Check out the guide

Refinance your student loans

Refinancing your student loans

can save you thousands or lower your monthly payment.

Refinance your student loans

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By , and When you refinance student loans, you can save money by replacing existing education debt with a new, lower-cost loan through a private lender.

To qualify, you’ll need:

You can refinance both federal loans and private loans. It doesn’t cost anything to refinance student loans, and you may be able to reduce your monthly payment or pay off your debt faster.

To decide if refinancing your student loans makes sense, you'll want to make sure your loans qualify, that you're not giving up payment options you might need, that you're getting a better interest rate, and that you've chosen the right company.

Based on an analysis of 30 lenders' reported rates as of July 29, 2022, the average interest rates are:

These rates represent about a percentage point increase across the board from the averages in June 2022 and follow a general upward rate trend over the last eight months.

If you have federal student loans, you probably should not refinance while the government forbearance is in effect. It's scheduled to expire Aug. 31, 2022. If you decide to proceed, you should have stable personal finances and emergency savings before taking that risk.

If you have private student loans and qualify for refinancing, the answer is almost certainly yes. Refinancing carries no fees or costs. For those who qualify for a lower interest rate, student loan refinancing may help you accomplish one or more of these goals:

Use a to estimate your savings.

When you refinance student loans, a private lender pays off your existing loans and replaces them with one loan with a new interest rate and repayment schedule. Going forward, you’ll make monthly payments to the new lender.

You — or your co-signer— typically need credit scores that are at least in the high 600s. Many refinance lenders seek borrowers with scores in the mid-700s. The better your (or your co-signer’s) credit, the better the rate you’ll likely qualify for. Additionally, you need enough income to comfortably cover your expenses, student loan payments and other debts.

Refinancing is a good idea if you qualify for a lower rate and you’re comfortable giving up the benefits that come with federal student loans. When you refinance federal loans, you lose access to income-driven repayment plans, loan forgiveness programs and other federal loan perks.

It depends on your situation and goals. If you have the credit and income requirements to qualify for a lower rate, refinancing can save you money and help you become debt-free faster.

If you consolidate your federal loans through the government, you won’t receive a lower interest rate, but you may qualify for loan forgiveness programs or income-driven repayment plans. won’t save you money. In fact, it may extend your loan repayment schedule, increasing the amount of interest you pay long term.

Most borrowers will want to go with the lowest interest rate they qualify for. But if rates are similar, look for lenders offering other features you value, such as the ability to refinance parent PLUS loans in the child’s name or flexible repayment options in case of an unexpected financial hardship.

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