12 Best Refinance Student Loans of April 2024
Updated April 11, 2024 at 11:46 am
Student loan debt can be a major financial burden. As of the fourth quarter of 2023, Americans owe $1.6 trillion in outstanding student debt, according to the Federal Reserve Bank of New York. If you’re struggling with high interest rates or unaffordable monthly payments, student loan refinancing could offer a solution.
When you refinance, you exchange one or more of your current loans for a new loan. Getting a better rate and new terms could save you thousands of dollars in interest over the life of your loan—and may help you pay it off faster.
To find the best deal, check out our picks for the best student loan refinance lenders that offer competitive rates, flexible repayment terms and other perks.
Our Methodology Newsweek Vault’s loan experts evaluated multiple data points to help our readers make sense of their borrowing options across student loans and personal loans. To narrow down the best available offers, we weigh the product pros and cons across five core categories, including:
- Application process
- Eligibility requirements
- Interest rates
- Loan amounts (minimum and maximum)
- Repayment flexibility
Our Picks - Best perks: SoFi
- Best for large loan amounts: Citizens Bank
- Best income-based options: RISLA
- Best co-signer release: Lendkey
- Best for parents: Education Loan Finance (ELFI)
- Best for no fees: EDvestinU
- Best term length options: College Ave
- Best for no degree: INvestEd
- Best rates: Laurel Road
- Best for Customized Loan Terms: Earnest
- Best for Fixed Rates: ISL Lending
- Best for International Students: MPOWER
Compare Student Loans
Our Picks for the Best Student Loan Refinance Rates
Best Perks
SoFi Student Loan
Vault Verified
Why We Chose It
When you sign up with SoFi, you’re eligible to use their member benefits, which include financial planning and unemployment protection. If you find yourself laid off, you may be able to apply for a hardship forbearance. Read our SoFi student loans review.
Pros
- Prequalify with no effect on your credit
- Low starting minimum loan amount
- No fees
Cons
- Limited co-signer release
- Must be employed, have offer of employment, or have sufficient income from other sources
- Must have an associate’s degree or higher
Best for Large Loan Amounts
Citizens Bank Private Student Loan
on Credible’s website
Why We Chose It
Citizens Bank offers student loan refinancing for up to $750,000 if you have a professional degree, $500,000 if you have your graduate degree and $300,000 if you have your bachelor’s degree. That makes it a lot easier to consolidate your loans even if you’ve borrowed a large amount for your education. And while the upper ranges of Citizens’ student loan refinancing rates are higher than other lenders, a substantial 0.50% rate reduction is available if you’re already an account holder and sign up for autopay. Read our Citizens Bank student loans review.
Pros
- Refinancing available even if you don’t have a degree
- No loan fees or prepayment penalties
- Repayment terms range from five to 20 years
Cons
- No co-signer release for the first three years
- Must have at least $10,000 in loans to refinance
- Best rates reserved for existing Citizens customers
Best for Income-Driven Repayment
RISLA Private Student Loan
Vault Verified
Why We Chose It
The Rhode Island Student Loan Authority (RISLA) lets you borrow between $7,500 and $250,000 per year for refinancing with a set repayment term of 5, 10 or 15 years, depending on whether or not you defer payments while in school. RISLA is also one of the few private lenders offering an income-driven repayment plan to borrowers with financial hardship.
Pros
- Payment forbearance options
- Zero interest for qualifying nurses
- No origination, application, insufficient funds or late fees
Cons
- Limited repayment term options
- No variable interest rate options
- Minimum annual income requirement of $40,000
Best Co-signer Release
LendKey Student Loans
on Credible’s website
Why We Chose It
For many students, post-graduation independence means becoming responsible for their own student loans. Some of LendKey’s bank and credit union partners offer a short co-signer release period of just 12 months (others require 36 months of payments). Read our LendKey student loans review.
Pros
- No origination or application fees
- Fast preapproval with no hard credit check
- Variety of terms from five to 20 years
Cons
- Can’t refinance parent student loans
- Must be a graduate to refinance
- Some loans have late fees
Best for Parents
Education Loan Finance Institute (ELFI)
on Credible’s website
Why We Chose It
The Education Loan Finance Institute (ELFI) offers student loan refinancing for both students and parents, with low maximum interest rates and a variety of repayment terms. ELFI offers student loan refinancing for parent PLUS loans and will refinance a parent PLUS loan into the student’s name. Read our Education Loan Finance student loans review.
Pros
- Competitive rates
- Dedicated student loan advisor
- Prequalifying won’t hurt your credit
Cons
- No co-signer release
- High minimum refinance amount
- Must have a bachelor’s degree to refinance
Best for No Fees
EdvestinU
on Credible’s website
Why We Chose It
Based in New Hampshire, EdvestinU offers credit-based student loan refinancing with no application, origination or prepayment fees. If you’re a resident in one of the 20 states this nonprofit education loan company serves, you can apply for a student loan refinance in your name; if you live in New Hampshire, there are also additional perks, like lower rates and in-person customer service.
Pros
- No degree required to refinance
- No loan fees or prepayment penalty
- 0.25% autopay discount
Cons
- Students can’t take over parent PLUS loans
- No co-signer release until 24 months
- $50,000 minimum income required to refinance more than $100,000
Best Term Length Options
College Ave
on Credible’s website
Why We Chose It
Sometimes you need more choices. Refinancing through College Ave lets you choose your ideal repayment term, even if it’s nonstandard, with options available for any length between 5 and 20 years. College Ave’s range of fixed and variable rates plus a low minimum loan amount adds extra flexibility, and the company doesn’t charge application fees or prepayment penalties.
Pros
- Prequalify with a soft credit check
- No origination or application fees
- Up to 12 months of forbearance if needed
Cons
- Must have a degree to refinance
- Low maximum loan amount
- Students can’t refinance parent PLUS loans into their name
Best for No Degree
INvestEd
on Credible’s website
Why We Chose It
Many student loan refinancing options are only available if you’ve completed your degree, but INvestEd will refinance your loan even if you didn’t graduate. This Indiana-based nonprofit is focused on helping people find affordable ways to pay for school, regardless of their degree status. But you’ll either need to live in Indiana or have attended an Indiana school to use the program.
Pros
- Loan amounts up to $250,000
- Offers student loan forbearance if needed
- Co-signer release after just 12 months
Cons
- No prequalification with a soft credit check
- Must have an Indiana connection
- Can’t transfer parent loans to the student
Best Rates
Laurel Road
Vault Verified
Why We Chose It
When it comes to interest rates, every percentage point matters. Laurel Road offers some of the lowest interest rates around, and they drop even lower if you take advantage of discounts such as signing up for a linked checking account. Health service professionals will especially appreciate Laurel Road’s pricing options, as the company offers special perks for doctors and nurses.
Pros
- Can refinance a parent loan into student’s name
- No maximum loan amount
- Prequalify with no hard credit check
Cons
- No co-signer release for first 36 months
- Degree required to refinance
- Need a linked checking account for lowest rates
Best for Customized Loan Terms
Earnest
Vault Verified
Why We Chose It
Earnest lets you customize your repayment term down to the month so you can choose a monthly payment that fits your budget. Qualifying borrowers can also skip a payment once per year without penalty. Read our Earnest student loans review.
Pros
- Customizable repayment terms down to the month
- Skip a payment once per year without penalty
- Option to adjust payment due date
Cons
- Refinancing not available in Nevada
- Must have credit score of 665 or higher to qualify
- Variable rate not available in certain states
Best for Fixed Rates
ISL Lending
Vault Verified
Why We Chose It
ISL Lending offers competitive fixed rates on refinanced student loans with five options for repayment terms. This lender doesn’t charge any fees to refinance student loans, including origination, prepayment and late fees.
Pros
- Competitive fixed interest rates
- Refinancing options for in-school students, parents and medical and dental professionals
- No origination, prepayment, late or other fees
Cons
- No option for variable interest rate
- Can’t refinance more than $300,000
- Not available to Maine residents
Best for International Students
MPOWER
Vault Verified
Why We Chose It
MPOWER Financing caters to international students and offers refinancing without a co-signer or collateral. To qualify, you’ll have to be on a valid visa, live in the U.S. and have worked in the U.S. full-time for at least three months after graduation.
Pros
- Doesn’t require co-signer or collateral
- Available to international students
- Reports payments to the credit bureaus to help you build credit in the U.S.
Cons
- Only one repayment term option (10 years)
- Maximum refinance amount is $100,000
- Charges a 2% origination fee on top of your disbursed loan amount
What Is Student Loan Refinancing?
Student loan refinancing is when you use a new loan to pay off your current student loans. The new loan usually has a better interest rate or different repayment terms, which can save you money. Student loan refinancing can consolidate multiple loans into one new payment, and you can use it for both federal and private student loans.
When you refinance a student loan, you’ll fill out an application with a new lender. If you’re approved, the new loan will provide funds for you to pay off your existing loans. Then all you need to do is make payments on your new loan. Your new lender may even take care of paying off the old loans for you.
Student Loan Refinancing vs. Student Loan Consolidation
Although the terms refinancing and consolidation are sometimes used interchangeably, they refer to two different processes. Refinancing involves exchanging one or more of your loans for a new one with a private lender.
Both private and federal student loans are eligible for refinancing, and the main benefit is reducing your interest rate. You’ll need to meet a lender’s requirements for credit, income and debt-to-income ratio to qualify for refinancing.
Student loan consolidation, on the other hand, is a federal program for combining multiple federal loans into one new Direct Consolidation Loan. Consolidation won’t lower your interest rate, but it can simplify repayment and allow you to choose new repayment terms.
Plus, Direct Loan Consolidation can make some loans eligible for certain repayment plans — for instance, you must consolidate Parent PLUS loans to get them on the Income-Contingent Repayment plan.
Who Can Apply for Refinance Rates?
If you have existing student loans and a job, you may be able to apply for a student loan refinance.
Qualifying for a student loan refinance typically requires you to have a steady income, a good credit score and a low amount of debt. If this doesn’t sound like you, you may be able to use a co-signer to help you qualify for a refinance. Some lenders also allow refinancing a parent loan into the student’s name, which can be useful for new graduates who want to take over their student loan payments.
There are usually some requirements you’ll need to meet, which can vary by lender. When comparison shopping for the best student loan refinancing rates, check to make sure you’re eligible to apply, since each lender may have different rules. Also keep in mind that your personal situation may affect the rates you can get.
Here are some common refinancing minimum requirements you may encounter.
- Degree: Many lenders offer student loan refinancing only to graduates. If you need help refinancing but haven’t completed your degree, you’ll want to shop around to find a compatible lender.
- Income: Lenders typically want to see evidence of a steady job history. You might need to provide pay stubs or bank statements to show you receive a steady paycheck.
- Debt: You might have a tough time getting approved for a student loan refinance if you have a lot of debt already. Lenders look at your debt-to-income ratio (DTI) when deciding whether they think you can afford the payment of your new loan. This ratio shows how much debt you have compared to how much you earn. The lower your DTI, the better.
- Credit score: Your credit history shows how responsible you’ve been with credit so far. Have you missed any payments or defaulted on other loans? A high credit score shows that you’ve been a good borrower, while a low credit score might worry some lenders.
- Co-signer: The good news is that if you need help qualifying for a loan, many lenders will accept a co-signer. A co-signer is someone who agrees to sign for the loan with you, and who will also be responsible for making payments if you can’t.
How to Refinance a Student Loan
Once you’ve decided you’re ready to refinance, take the process step-by-step. Begin by getting a feel for your credit, which will help you know which lenders to target when comparison shopping. You’ll also want to check multiple lenders to find the best refinancing rates. Don’t skip this step, or you could miss out on a great rate and wind up paying too much for your new loan.
Here are six steps to follow to refinance your student loan:
- Check your credit report: Review your credit report with each of the three main credit reporting bureaus: Equifax, Experian, and TransUnion. Your credit report is free when you use annualcreditreport.com. If you find any errors, report them right away, as they could be dragging down your credit score.
- Shop for lenders: Once you have an idea of your credit, compare lenders to find the right fit. Look for lenders that offer competitive interest rates, low or no fees, and terms that work with your budget.
- Prequalify for rates: Prequalifying for a student loan refinance will let you see the rates you may qualify for—without taking a hit to your credit. Prequalifying is a “soft” credit check, and it’s a good way to compare offers before you apply.
- Fill out the application: Once you’ve chosen a student loan lender, fill out the application. Many places let you apply entirely online; just make sure you have your documents ready, such as bank statements, pay stubs, and loan servicer statements. You’ll also need proof of identity, such as a driver’s license and Social Security number.
- Sign your loan documents: After your application is approved, read and sign your loan paperwork and send it back to the lender. You may even be able to electronically sign, which speeds up the process.
- Receive your funds: Finally, you’ll receive your funds, often directly to your bank account. Make sure you keep paying your old student loans until you’ve confirmed they have been paid off with the proceeds of the new loan and don’t forget to arrange payment for your new loan as well.
Frequently Asked Questions
Is It a Good Idea to Refinance a Student Loan?
Refinancing your student loan could save you a lot of money, shrink your monthly payment, or shorten your repayment period, but you’ll need to run the numbers to know if it’s the right choice for you. You may not want to refinance your student loan if you already have a lower interest rate than what is available on the market or if you have a federal student loan. That’s because refinancing federal student loans means you’ll lose your access to federal student loan forgiveness or forbearance options.
How Do I Get a Lower Student Loan Refinance Rate?
You can get a lower rate simply by shopping around and comparing offers. Other things you can do to lower your student loan refinance rate are to work on improving your credit, ask a trusted friend or family member to co-sign with you and check for rate discounts. Many lenders offer a discount when you sign up for autopay.
Does Refinancing Hurt Your Credit?
Applying for new debt, including student loan refinancing, can ding your credit score by a few points. But this drop is only temporary. Plus, refinancing can reduce your interest rate, pay your loan down faster and actually improve your credit score as you make regular on-time payments.
Newsweek writer Rebecca Safier contributed to this post.
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
