Editor’s note: We recommend waiting to refinance federal student loans until September 30, 2020 at the earliest based on the Coronavirus stimulus bill that halts all federal student loan interest and payments until that date. You should still refinance private or already refinanced student loans.
When you refinance student loans, you transfer your existing federal and/or private student loans to a private lender primarily for a lower interest rate (some borrowers also seek lower payments or fewer lenders to deal with). This post has everything you need to have a 99% chance of finding the best student loan refinance deal.
We list the top 5 lenders in the table below that most frequently offer the best deals to our readers, who refinance and consolidate an eight-figure sum through this site each month. If you want near certainty that you’ve found the best deal, then read the whole article and check all 12 refinance companies that we mention.
- Variable APR
1.99 - 6.65%
- Fixed APR
3.50 - 7.02%
- For 250k+, $300 to $500 for 50k to 249k
- Variable APR
3.50 - 8.72%
- Fixed APR
4.25 - 8.77%
- For 100k+, $300 for
50k to 99k
- Variable APR
1.76 - 6.45%
- Fixed APR
4.25 - 6.45%
- For 75k+, $300 for
40k to 74k
- Variable APR
3.50 - 6.01%
- Fixed APR
4.25 - 6.69%
- For 150k+, $300 to $575 for 50k to 149k
- Variable APR
2.39 - 8.72%
- Fixed APR
4.25 - 8.72%
- For 150k+, $100 to $400 for 5k to 149k
Student Loan Planner intentionally earns less money from our refinancing referral links to get you a significant bonus on top of a better interest rate when you refinance your student loans through our site.
Here are three components that influence lender placements and ratings on this page in order of importance:
- How many readers successfully refinanced with this lender in the past few months? If a high percentage of the people who apply through our site accept a loan, it tells us which lenders are doing a good job and which are not.
- What are we hearing from applicants? We look at weekly reader feedback and data from annual surveys we conduct. Our readers’ feedback on a lender’s website, the application process, and rates must be excellent to receive prominent placement.
- How much does a lender pay us? Unlike most other websites, we accept lower commissions to offer better bonuses for those refinancing student loans through our site.
So you’ve decided refinancing your student debt is right for you. Great! We’ll show you how to get the most out of the process so you can reach your financial goals sooner.
Refinancing During Coronavirus
As of March 13, 2020, President Trump stated that federal student loans would accrue 0% interest until the foreseeable future.
We suggest refinancing only private student loans for the duration of the Coronavirus emergency until September 30, 2020 at the earliest.
For private loans, it still makes sense to refinance as long as you can find a better rate somewhere with a payment that does not compromise your personal finances.
Remember you can refinance your student loans as many times as you want.
In some cases, you might even consider refinancing a private loan to a higher interest rate in exchange for a lower monthly payment. A 20 year fixed at 6% might be a better choice than a 10 year fixed at 5% if you’re afraid of being able to make your payments.
If you do that, then you can refinance again later, so that might be one path to preserve cash flow right now if you have to.
1. Check your credit
Private lenders base your interest rate on several factors, the most important being your credit. If your credit score isn’t strong, you won’t qualify to refinance loans.
If you have a history of paying your bills on time, you probably have nothing to worry about. If you’re not sure your credit is high enough, check your credit history to see if you have any areas for improvement.
Your credit card company or bank might also provide a free monthly update of your FICO score. You’ll need at least a 650 to be approved for refinancing in most cases.
2. Get your paperwork together
When you choose a lender, you’ll need to provide a range of documents, so you might as well get all the paperwork you need ready.
That said, many borrowers do a quick rate check within a couple minutes and come back to finish the application later.
Your lender may require the following:
- Two years’ worth of tax returns (only for business owners. Physicians and dentists only need one year of tax returns).
- Recent pay stubs from your current employer
- Statements from your existing private and federal student loans
- Valid photo ID (such as a driver’s license)
- Bank account information (routing number and account number)
Keep in mind that each lender is different and may have other requirements as well.
3. Check rates with multiple lenders
To get the best rate on refinancing, I recommend checking your rate with several lenders. Each time you check your rate, the lender does what’s called a “soft credit check,” which doesn’t show up on your credit report.
Feel free to check your rate with as many refinance companies as you want without fear that it’ll negatively affect your credit. Credit bureaus know that you’re rate shopping, which is a normal behavior.
4. Compare offers
Now that you’ve collected all of your quotes, it’s time to pick the winner.
Which lender you choose depends on what your goals are with refinancing. If you’re looking to save the most money, then pick the lender with the lowest rate quote. If you’re looking to extend your loan terms so that your monthly student loan payments are more manageable, pick the lender with the monthly payment amount that fits your budget.
When refinancing student loans, you’ll also have the option of a fixed or variable interest rate loan. We suggest choosing fixed unless you have the capacity to pay off your loan in two years or less. In that case, consider variable if the rate is at least 1% lower than the fixed rate.
5. Run the numbers
Refinancing student loans can lower your interest rate and/or lower your monthly payment, but at what cost? For example, if you extend your student loan payments to 20 years, you might owe more interest over the life of the loan compared to your existing loans.
We’ve put together a simple refinancing calculator you can use to check any potential offers out for yourself. Do not refinance your loans if you plan to receive student loan forgiveness, as you cannot reverse it.
6. Consider refinancing bonuses
At Student Loan Planner, you can get cash back when you refinance your student loan debt.
I don’t recommend choosing your lender based on a refinancing bonus. Choose a lender that has the lowest interest rate. That said, the refinancing bonus is nice to have since most other sites do not offer one.
7. Vet the lender
Do you care about getting top-notch customer service? Or would you rather just get the lowest rate possible?
Now that you’ve chosen a potential lender, it’s time to thoroughly vet the company before you sign on the dotted line. We’ve already reviewed all of these companies, so if you’re concerned just read the reviews we’ve linked to below.
Also consider any special programs or repayment options that may help you. Some lenders offer forbearance options, for example, or programs like career coaching. Many refinance companies offer a 0.25% interest rate reduction when you sign up for autopay too.
8. Submit an application
The next step is to complete a formal student loan consolidation and refinancing application with the lender.
Since you’ve already gotten your paperwork in order from the earlier steps, applying online should only take a few minutes. Each lender has slightly different application requirements, so stay tuned to your email and phone in case the lender contacts you.
After submitting the online application, the review process could take a few weeks to complete. In the meantime, keep paying your current lender until you get the green light for your new lender to start making payments to them.
Get The Best Refinancing Deal Anywhere
If you find a better student loan refinancing deal somewhere else or just have questions, please tell us in the comments. A CFA or CFP® professional will try to respond.
It’s extremely rare that a reader finds a better deal from a lender not on this site.
The paid referral relationship we have with our partners does not affect the rate you’re offered, which means that you get better deals than if you applied directly. Notice that for some of these companies, you need to refinance a minimum amount with that lender to get the bonus.
If you’ve already started an application with any of the companies above, you can still get the bonus if you apply with a new email you haven’t used before.
Why should you trust me when I say you’ll find the best student loan refinancing deal using our website?
We are the highest rated company in the entire student loan industry. Here’s the proof.
Why 2020 is the Best Time to Refinance in History
Here’s 3 reasons why you could get the best student loan refinancing deal ever in early 2020:
- Interest rates have never been lower
- The extra yield investors demand for lending to risky borrowers is among the lowest it’s ever been
- There’s more competition than ever among student loan consolidation and refinance lenders
Any 1 of these 3 factors is a positive for low rates. But all 3 are currently happening at once.
Who should refinance student loans and what banks should you start with? The quiz button below will give you our free recommendation.
Is Refinancing Right For Me? Here’s 2 Rules of Thumb
After advising hundreds of millions of dollars in student debt, here’s what I tell borrowers when they ask “should I refinance my student loans?”
- Refinance federal student loans if you work in the private sector, have a solid emergency fund, and owe federal debt less than 1.5 times your income. Note that on March 13, 2020, President Trump declared he would suspect all interest on federal student loans until further notice due to Coronavirus. You might wait until this interest freeze is over to refinance federal student loans.
- For your private student loans, shop for new interest rates and refinance student loans at least once per year if you can find a lower rate. Most borrowers do not know that you can refinance two, three, or even four or more times and get multiple cash bonuses by changing lenders if a company on this page will offer you a better deal than what you currently have.
Please be aware that refinancing federal student loans eliminates income-driven repayment, forgiveness, and the most generous forbearance options. You need to be sure that these protections are not as important as getting a lower interest rate before refinancing. After you’ve refinanced, you can’t undo it.
Many borrowers who meet the conditions above refinance and consolidate their federal and private student loans into one new loan.
Our research shows only 10% of borrowers will check more than three lenders. That’s why we created the table at the top of the page so you can focus your search on the companies that are least likely to waste your time. If you want to be assured of getting the best deal though, check all 12 companies we list below.
Some companies, like Earnest, CommonBond, ELFI and Laurel Road offer rates directly. Others, like Credible and LendKey, connect you to a huge number of lenders listed on their platforms that you probably wouldn’t check on your own.
What Are the Current Student Loan Refinancing Interest Rates?
These are examples of rates I’m seeing based on different credit scores in the national student loan refinancing market in 2020 (excluding regional lenders).
If you have an interest rate higher than those in the table, you need to get quotes from the lenders below.
Articles to Make Your Student Loan Refinance Decision Easy
All 12 Student Loan Refinancing Companies Compared
Comparing the 12 lenders below will make getting a lower rate easier. We highlight the top reasons you would consider using each lender, the cash bonus terms available (some are specific to the amount refinanced), lender specific reviews if you want to learn more, as well as a star rating reflecting feedback we receive from our readers.