Best Student Loan Refinance Lenders of May 2024

Student Loan Refinance Rate Trends

Interest rates for student loan refinancing increased last month, according to a U.S. News analysis of minimum and maximum APRs reported by private lenders. Student loan refinancing rates have trended higher during the past year, with variable rates climbing by a higher margin than fixed rates.

• Average fixed APR range: 5.53% - 10.59% (Compared to 5.35% - 10.97% the previous month).
• Average variable APR range: 5.76% - 11.09% (Compared to 5.59% - 11.40% the previous month).

The APRs on the lower end of the range are generally reserved for applicants with a high credit score and low debt-to-income ratio, while those with poor credit or limited income will see higher rates.

If you don’t have the credit history needed to qualify for a competitive student loan refinance rate, consider enlisting the help of a co-signer. Additionally, shop around with multiple student loan refinance lenders to ensure you’re getting the lowest possible rate for your financial situation.

• Could get a lower interest rate. If your credit history has improved since you took out your loans, you may be well-positioned to get a lower rate if you refinance.
• Fewer payments per month. Refinancing makes it possible to combine multiple loans into one, so you'll have fewer payments to worry about each month.
• Co-signer could be removed. Refinancing is one way to remove your co-signer if you want your student debt to be your responsibility alone.

• Won't be able to use federal loan forgiveness programs. If you are hoping to get forgiveness on a federal loan, you'll no longer be eligible for any relevant federal loan forgiveness programs if you refinance that loan.
• Lose access to federal income-driven repayment programs. If you are using a federal income-driven repayment plan for a federal loan, you'll lose access to it if you refinance that loan.

• Minimum credit score. You may need a credit score in the mid-600s or higher to qualify for refinancing. But even if you qualify for refinancing, you may not qualify for a lower interest rate than you have now.
• Credit history. The length of your credit history and any derogatory marks, such as late payments, can inform a lender's evaluation of your creditworthiness. You can order free copies of your credit reports – now weekly through the end of 2023 – at AnnualCreditReport.com to monitor for and dispute any errors.
• Proof of income. Lenders may have minimum annual income requirements.
• Debt-to-income, or DTI, ratio. This is the percentage of your total monthly income that goes toward debt payments, and it can help lenders determine if you'll have trouble making your loan payments. A lower DTI ratio is better because it indicates that you have more room in your monthly budget. You can reduce your DTI ratio by switching to longer repayment plans, which would lower your monthly debt payments.

• Complete degrees.
• Live in certain states.

• You qualify for better terms. If you have good credit and meet the loan refinance lender's minimum income and other requirements, you may qualify for a better interest rate that can decrease your monthly payment and the cost of the loan.
• You want to combine your federal and private student loans. You'll have to refinance student loans with a private lender to combine private and federal loans.
• Your income is stable. Refinancing federal student loans means you'll no longer be eligible for income-driven repayment plans or federal hardship programs.
• You don't plan to use federal student loan forgiveness options or alternative payment plans. Private loans aren't eligible for these federal loan programs.

1. Review your credit score. Since private lenders determine your interest rate and eligibility based on your credit history, you should know where you stand before you apply. The lowest rates are typically reserved for applicants with very good to excellent credit, defined by the FICO scoring model as 740 or higher. If you have fair or bad credit, you may need to refinance your student loan debt with the help of a creditworthy co-signer.
2. Check your existing loan terms. Review the loan agreement for your current student loans to find the remaining loan balance, interest rate and payoff date. If you can't find this paperwork, get in touch with your student loan servicer. Use the rate on your current student loan debt as a baseline – you'll want to find a lender that offers you a lower rate to reduce your monthly payment and overall interest charges. You'll also need to add up your existing loan balances if you plan on consolidating multiple loans.
3. Get prequalified through multiple lenders. Most lenders let you see your estimated loan terms, such as your interest rate, with a soft credit inquiry. This lets you compare student loan refinance rates across multiple private lenders before you make a decision. Also be sure to consider a lender's fees, loan discounts and economic hardship programs.
4. Fill out a formal loan application. Once you've chosen the right student loan refinancing lender for your needs, you'll need to formally apply for the loan. This requires a hard credit check, which will have a temporary but minimal impact on your credit score. The lender may also request other financial information, like proof of income and identification, as well as your current loan information.
5. Continue making payments while the disbursement is finalized. If you're approved for a new student loan at a lower rate, the refinancing process may take a few weeks to complete. Be sure to keep making payments through your current loan servicer during this time to avoid missed payments and late fees.

• Student loan refinance rates.
• Minimum and maximum loan amounts. Some lenders don't have maximum loan amounts, but this could be a concern for borrowers with high student loan balances. As for minimum loan amounts, some refinancing companies may require at least $5,000 in refinancing, so if you have a small amount of student debt, you might not be eligible for refinancing.
• Repayment terms. Refinancing lenders may offer loan repayment terms as short as five years or as long as 25 years. Choosing a shorter repayment term could increase your monthly payment but reduce the interest you pay and get you out of student debt sooner.
• Autopay discounts. Many lenders offer borrowers a 0.25-point APR discount if you sign up for automatic payments through your bank. Others may offer an interest rate discount if you already have a loan or bank account through the lender.
• Repayment and hardship options. If you need flexible repayment or want hardship options available in case of emergency, find out what lenders offer. Some student loan refinance companies may have flexible repayment options, perhaps allowing you to make interest-only payments for a certain period. Deferment, forbearance and other hardship options may be available, too.
• Fees. Interest may not be the only cost you'll face. Read the fine print to see if you'll have to pay fees, such as late or returned payment fees. But importantly, lenders don't charge upfront origination fees to refinance student loans.
• Customer service. Learn about how well a student loan refinance company does with customer service by reading reviews. You'll want to know what experts and other consumers have to say about a lender before you sign on the dotted line.

• Make bigger payments. If you are able to put more money toward your loan each month, you may pay it off faster and owe less interest over the life of the loan.
• Check for a co-signer release. You may not need to refinance your student loan to get rid of your co-signer if your lender offers a co-signer release option. However, keep in mind that it can be difficult to get a co-signer release approved.
• Take advantage of federal loan benefits. If you are considering refinancing federal loans because you can't afford monthly payments, for instance, first check to see if income-driven repayment or another option may be available and work better for you.
• Contact your lender. You can get in touch with your lender to see if it offers options such as financial hardship forbearance.
• Talk to a student loan counselor. If you're not sure how to best manage your student debt, you can look for assistance from a nonprofit financial counseling agency.