Taking out student loans can be a necessity when it comes to funding your higher education costs. They can be costly, but they can also help you secure the career you’re looking for, not to mention the salary increase that can come with having a degree can be great. Once you’re done with college and you begin your path to repayment, it can also save you plenty of time and money if you refinance your student loans too.

However, it can be very confusing to know what the best option is for you when it comes to refinancing or consolidating your student loan debt. With so many different lenders, banks, and programs in general, it can be an overwhelming process. This article looks to answer some key questions, as well as give you a starting point on some of the best places to refinance your student loans today.

Before we begin, it’s important to understand a few key differences. First student loan refinancing is the process of getting a new private student loan to replace your existing loan or loans. Student loan consolidation, on the other hand, is simply combining multiple federal loans into a single loan. This can be beneficial so you’re not making multiple payments every month.

As you navigate this field, it can be confusing to know what you should do. In general, you should not refinance federal student loans unless you can afford paying off your loans on the standard 10-year repayment plan. However, if you can afford it, refinancing can make a lot of sense financially.

Best Student Loan Refinance & Consolidation Companies

1. Credible

Credible isn’t necessarily a place to refinance your student loans, but it tops our list because you can use Credible to get rate quotes from several different lenders at once to compare real quotes in real time so you know you’re getting the best rates available to you. Even though you can do this one at a time on your own, Credible makes it simple to review all of the biggest and best lenders on the market.

When you use their service, you submit your information just once and get your quotes from multiple lenders without affecting your credit score. You can then compare everything from interest rates to loan terms for up to ten different lenders and ultimately decide on the best one for you. Once you figure out which loan this is, you can complete your application online.

Credible can get you quotes to refinance federal loans, private loans, and even Parent PLUS loans, so it’s truly a one stop shop for all of your refinancing needs. Credible also offers a best rate guarantee, so if you receive an offer for a better rate from a lender not on the credible website and refinance with that lender at the lower rate, you will get a $200 best rate reward from Credible. That is how confident they are in their service.

Best of all, Credible is a completely free service to its users. Instead of charging their users fees, Credible makes their money through referral commissions if you get a through its website.

2. Earnest

Earnest is one of the most flexible student loan refinancing companies, which is why that landed a spot on this list. Earnest offers the ability to pick any monthly payment and term between 5 and 20 years, which can save you more money than standard rates and terms. You just have to make sure that your payment terms actually pay off your loan in the timeframe you choose at the rate you chose.

Earnest also gives you the ability to change your loan as you go, so if your situation changes you can change the payments as well. You can refinance your loan for free, change the payment dates, and even skip a payment once a year and make that payment up later. Earnest is a fee-free lender and has no set income requirements for their borrowers.

3. Citizens Bank

Citizens Bank is one of the few banks on this list for places to refinance. They make this list because Citizens Bank offers many great loan options with the backing of a stable bank. They offer a variety of fixed and variable rate loan options, and you can choose your repayment term options anywhere from 5, 10, 15, and 20 years. There is no application or disbursement fees, and you can get interest rate discounts through their Citizens Bank loyalty programs.

Citizens Bank also has a release program where a co-signer can be taken off of the loan after 36 consecutive, on time payments are made against the loan. The only big drawback is that there is a $10,000 minimum loan amount, so if you don’t need this amount, Citizens Bank might not work for you as a borrower with a lower loan balance.

4. College Ave

College Ave offers a few unique student loan products that can be viable consolidation and refinancing options. College Ave is a reliable lender to who just recently started offering fixed rate and variable rate student loans alike. College Ave can also allow some interesting repayment options. Things like an interest-only payment, a deferred payment, and a fixed rate payment are all options as you work to pay off your loan. 

With College Ave, you can refinance a single loan to get better terms, and you can refinance a loan as low as $5,000 or as much as $250,000.

5. CommonBond

CommonBond is one of the original student loan refinancing companies. CommonBond is a no fee lender that offers both fixed and variable rate loans while offering a unique unemployment protection program. This program can protect you by pausing loan payments if you’re unemployed and looking for work. It also helps eligible graduates find new jobs, even if it’s just hiring them for short-term roles.

CommonBond also takes a unique giving approach to its lending. They help fund Pencils of Promise, a non-profit organization that builds schools and increases educational opportunities in the developing world, with every loan that the company refinances.

6. ELFI

ELFI (Education Loan Finance) is one of the best lenders out there. It doesn’t matter if you’re looking to refinance an existing student loan at lower rates, or if you’re a parent looking to refinance a Parent PLUS loan into your child’s name, ELFI can help get it done.

ELFI has a borrowing minimum of $15,000 for refinances, with the maximum being your outstanding loan balance. If you have a high student loan amount, this can really help you out. ELFI doesn’t have specific credit minimums posted anywhere on their website, but they do require the borrower to be deemed creditworthy, or at least have a creditworthy cosigner on the loan.

7. Laurel Road

Laurel Road is an established student loan lender that is formally known as DRB Student Loans. Laurel Road is best suited for medical and dental graduates; however they have loan options for any borrower of any amount.  The reason we stay that they’re great for medical and dental graduates is because they are one of the few lenders that allow people to refinance for more than $300,000 in student loans. Anything above this amount gets broken into a second loan, but at least they offer the service unlike most places.

8. LendKey

LendKey has a unique approach for their borrowers. The company has a refinancing tool that pools money from community banks and credit unions to offer well-priced student loans to their borrowers. They offer loans at amounts anywhere from $5,000 to $300,000, but the maximum amount that can qualify for depends on the degree that you earned. For example, the lowest amount is for undergraduate degrees caps at $125,000.

LendKey bases their rates upon your credit worthiness. They also offer discounts on their rates if you sign up for their auto-pay feature. They also keep fees down to minimum, which is great for the borrowers. It is worth noting, however, that LendKey does not allow refinancing for borrowers who didn’t graduate from the program that they have their loan for.

9. PenFed

PenFed is a new addition to the list because it is now one of the best places to consolidate your student loans. The reason is because they have some of the lowest student loan consolidation rates on the markets, and they’ve continued to get lower and lower in recent years. PenFed is also now on Credible, so you can easily see how they compare to the other top lenders out there.

PenFed offers loans up to $150,000, but you normally have to show strong earnings in your career or have a cosigned that meets their requirements. They are also the only lender that does allow for spousal loan consolidation, which is an extremely rare and unique option that some people might want to consider.

10. SoFi

SoFi is another one of the original student loan refinancing lenders, and one of my personal favorites. SoFi is one of the most well-known. The company offers a wide variety of both fixed rate and variable rate loans, with repayment terms running for 5,7, 19,15, and 20 years. As a side note, SoFI now even offers mortgages. 

SoFi loans have no origination fees, and don’t have a prepayment penalty, so if you decide to pay your loan off early there is no penalty to you. On top of this, the company offers unemployment protection for borrowers, and also has a career support program to help you if you come across a hard time and find yourself looking for work.

To get the best rates, you’ll need to have excellent credit, or you’ll need to have a cosigned that has excellent credit for the loan. SoFi also offers a cosigner release program, so once you make a number of payments, the cosigner can be taken off of the loan. Like many major refinancers, SoFi is on the Credible platform, so you can compare their rates to other top lenders to make sure you’re getting the best deal for you.

11. Splash Financial

Splash Financial is a newer student loan refinance lender, but they do offer great things when it comes to student loan financing. Splash Financial offers student loans with no original fees, and offer some unique repayment plans. For example, Splash Financial allows spouses to refinance together, which is extremely rare for student loan lenders. They offer loans starting at a minimum of $5,000 and don’t have a maximum amount set, but the maximum loan amount can vary depending on your credit worthiness as determined by the company.

12. Discover

Discover might not be a name you think of when you think about student loan refinancing, but they do offer some great perks for their borrowers. Discover doesn’t charge you any fees, even if you miss a payment. With no additional fees, the only charges that you need to worry about is the interest that accrues over the life of your loan. With Discover, you can also qualify for a loan without the use of a cosigner. Their rates are as competitive as anywhere else, with variable rates ranging from 2.37% – 6.12% and fixed rates ranging from 3.99%-7.74%.

You can refinance for loans anywhere from $5,000 to $150,000, and you can choose to refinance your loans while you’re still in school. To qualify for a loan through Discover, you must be at least 18, pass their credit check, and have a verified income that meets Discover’s standards.

Best Student Loan Refinancing Rates

Student loan refinancing rates can vary quite a bit as time goes on. You could see a rate quoted, but that doesn’t necessarily mean you’ll qualify for the top rate that’s available. 

To get the best rate, you normally have to have an amazing credit score, typically over 800 You also need to have a great debt to income ratio and looking to refinance a loan for a period of 3 years. You can sometimes get a better interest rate by doing other things through your refinance lender like signing up for autopay or taking out a variable rate loan instead of a fixed rate loan. Right now, the best student loan rates can go as low as 1.99% APR if you meet all of the criteria.

The Requirements to Refinance Student Loans

The requirements to refinance student loans are different compared to taking out the loans to begin with. For federal loans, all you had to do was fill out the FAFSA forms online and the government told you what you qualified for. For graduate school loans like medical school loans, you might have to need a credit check beyond just the FAFSA. With private student loan refinancing, however, the requirements are closer to those of getting a personal loan, car loan, or taking out a mortgage.

Keeping this in mind, lenders will typically look at things like your credit score, annual income, any savings or other assets, and the degree that you obtained. If you don’t meet all of the lender’s requirements by yourself, you should consider getting a cosigner for your loan so you can still refinance if you feel that’s best.

What to Consider When Refinancing

When you’re looking to refinance your student loans, there can be a number of considerations that you’ll want to keep in mind. Every different lender is going to have their own perks, and you have to take each of these into consideration when weighing your different options.

In general, there are some big things to consider when you refinance, such as variable rates versus fixed rates, the length of the loan, any fees associated with the lender, any lending minimums or maximums, credit score and income requirements, and if you’ll need a cosigner.

This might all seem like a lot, but it’s better to be overly prepared than underprepared, especially when making such a large decision.

Is It A Good Idea to Refinance A Student Loan?

This is going to depend from person to person, as there isn’t a definitive right or wrong loan to take out when it comes to student loan refinancing. A few good points to keep in mind is that most borrowers would benefit from a student loan refinance that only is 5 or 6 years in length. As a borrower, you should also look for any type of loans that have little to no fees. Also, if a cosigner is required, you should look for a cosigner release process for later on in the loan term.

These are just guidelines, however, and you should take your own considerations into account here as well.

More Student Loan Refinancing FAQs

What is student loan refinancing?

Student loan refinancing is the process of taking your existing federal student loan or private student loan and taking out a new loan to replace the existing ones.

How can I refinance my student loans?

You have to refinance your loans first by applying and being approved by the bank or lender that you’ve chosen to go with. You typically need to meet a number of different criteria, including things like having a good credit score and debt to income ratio.

When does it make sense to refinance?

As a general rule of thumb, it makes the most sense to refinance your student loans if you expect to pay them off in 6 years or less. It also makes sense if you aren’t able to capitalize on any type of loan forgiveness programs or income driven repayment plan and can save a considerable amount of money on interest or by shortening your loan term.

How can I lower my student loan interest rate?

When you refinance your student loan or loans, you can possibly lower your interest rate if you qualify for it. The lowest interest rates are typically on variable rate loans, but you should keep in mind that they’re called variable loans for a reason. These interest rates can vary over time, hence the name, so just because you have a lower rate today doesn’t mean you’ll have the same low rate in a year from now.

What credit score do you need to refinance your student loans?

This will vary from lender to lender based on their own specific requirements, but you’ll most likely need a credit score of 660 or higher to even potentially qualify. However, for the best rates and terms, you’ll likely need well into the 700s if not the 800s.

What’s the difference between student loan consolidation and refinancing?

Student loan consolidation is a free service provided by the government that allows you to combine all of your federal loans into a new, single loan. However, this consolidation doesn’t change anything on the actual loans itself, so you will still have the same weighted interest rates and payments. It will just make it easier to keep track of and pay off.

Student loan refinancing will be a new private loan that replaces your federal/private loans that you currently have and can typically be at a lower interest rate or a different payment term.

What are the risks of student loan refinancing?

The biggest risk of refinancing is that you lose access to any programs that you may have been eligible for with your original loans. This is especially true for federal loans. For example, if you were eligible for a student loan forgiveness program with any federal loans you have, refinancing these to a new private loan will take away this option for you.

Final Thoughts

Student loans in general are a tricky area to navigate. Trying to figure out if you should even refinance your student loans is difficult, but it should be said that refinancing doesn’t necessarily make sense for everyone. However, if you’re able to afford your loans on what’s considered to be the standard 10-year repayment plan but don’t plan on taking advantage of any type of forgiveness programs, then you should definitely consider looking into student loan refinancing.

This list looks to highlight some of the top student loan refinancing companies, as well as different comparison companies like Credible so you can shop around in a more efficient and effective manner. You will truly benefit from comparing your options amongst these lenders, as they’re some of the best out there today.

If after reading this and doing your homework you’re still not sure of where to start or even if you should refinance at all, you should consider hiring a Certified Financial Planner or a Chartered Financial Analyst to help you with your student loan journey. Since they’re financial experts, they can give you more clear and concise advice on the matter.