Can You Refinance Student Loans?

Do you know what comes next for your student loan payments? Refinancing student loans is possible, but it’s not right for everyone.

Rachel Curry - Author

Aug. 24 2022, Published 1:10 p.m. ET

If student loan payments restart, borrowers may want to look at the state of their loans. Ask yourself: Do you have multiple student loans and would you benefit from refinancing?

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You don’t need to answer this question until we know whether student loan forgiveness will pan out. Still, it’s possible for eligible individuals to refinance student loans. Though it’s not right for everyone, if you can decrease your monthly and total payments, it may be worth it.

Refinancing vs. consolidating student loans

If you have federal and private student loans, you may be able to combine them into a single loan with revised terms. This is called refinancing. In contrast, consolidating student loans occurs if you only want to combine federal student loans with revised terms.

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Who can refinance student loans?

Individual borrowers may be eligible to refinance their student loans if they meet certain criteria. While the specific criteria depend on the lender, the following are typical:

  • The student loan itself must be eligible to be refinanced

  • The borrower must have a decent credit score (high 600s or above)

  • Provable income and demonstrated capability to pay debt

  • A completed education and degree from a qualifying college

How refinancing student loans works:

Before applying to refinance, you need to find out if you’re eligible. To do this, apply for pre-approval from a lender. Common student loan refinancing lenders include:

  • SoFi: Fixed annual percentage rate (APR) of 3.99–8.24 percent, variable APR of 2.24–7.99 percent, minimum credit score of 650

  • Education Loan Finance: Fixed APR of 3.99–6.99 percent, variable APR of 1.86–7.98 percent, minimum credit score of 680

  • LendKey: Fixed APR of 2.99–9.93 percent, variable APR of 3.57–6.83 percent, minimum credit score of 660

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An alternative is a direct consolidation loan through Federal Student Aid. According to, “If you currently have federal student loans that are with different loan servicers, consolidation can greatly simplify loan repayment by giving you a single loan with just one monthly bill.”

Benefits and risks of refinancing student loans

You can only refinance federal student loans through the federal government. Private lenders allow you to refinance private or federal student loans. Be careful when selecting a lender and make sure they’re reputable. Predatory loans are common and you’ll want to cross-reference all loan terms before proceeding with a refinancing agreement.

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While there is no limit on how many times you can refinance student loans, you’ll want to make sure it benefits your bottom line anytime you do it.

If a parent holds student loans for their child, refinancing can transfer the loan for the child to take over when they’re working.

Beware: If your federal student loans provide you with some sort of benefit, make sure you don’t lose them by refinancing with a private lender. For example, your federal student loans may offer you the benefit of income-driven repayment, which keeps monthly payments affordable. You could also be eligible for some sort of loan forgiveness program if you work in the public sector. Refinancing (and even federal loan consolidation, in some cases) would cause you to lose this, but the benefits outweigh the risks for some borrowers.


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