There are many reasons to refinance student loans. While securing a lower rate is the most common, you can also change your loan term, consolidate multiple loans, release a co-signer or switch from a variable to a fixed interest rate.
Refinancing typically requires good or excellent credit, with most lenders typically wanting to see a FICO Score of 670 or better, according to credit bureau Experian.
Your credit score is the main factor, but there are many other important requirements that determine your eligibility and the rate you'll receive.
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Student loan refinancing requirements
Before you apply for refinancing, ask yourself how you score on this checklist.
Good credit: Most lenders want a credit score in the mid-600s or higher for refinancing, with a 670 or better (good to excellent) for the best interest rates. There are lenders that will accept scores as low as 580, but expect higher rates and less flexible terms.
Loan minimum: A minimum of $10,000 in outstanding student loans is common among larger lenders.
A history of on-time payments. Lenders want insight into how you're handling your current student loans and the likelihood you'll pay a new one on time.
Consistent income. Applicants need to show they have a steady enough cash flow to repay their new loan in full.
A low debt-to-income (DTI) ratio. Your DTI shows how much debt you have relative to your income. A low DTI ratio indicates you have the room in your budget to make consistent payments. For student loan refinancing, lenders typically want to see a ratio below 50%, with 36% to 40% or ideal for the best interest rates.
Proof of graduation. Most lenders require that you've received a degree or certification, or have stopped attending school at least half-time, before they'll approve refinancing.
Residency status. Refinancing is usually only available to U.S. citizens or permanent residents. In addition, some banks only lend in select states.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Undergraduate and graduate students, parents, students in MBA, law, health professional and dental programs
$5,000 (or state-mandated minimum) up to the cost of attendance
5, 7, 10, 15, years; up to 20 years for refinancing loans
Terms apply.
Undergraduate and graduate students, parents
Amount varies by individual lender
Range from 5 to 20 years
Terms apply
If you can't get approved for student loan refinancing
If you don't meet the criteria above, there are still options you can explore.
Because you have bad credit
Some lenders specialize in working with applicants with weak credit: Earnest usually requires a minimum credit score of 660, but it will consider other factors, including education, savings, and career potential. Funding U makes approval decisions based on academic success and doesn't have a minimum credit score.
Actual rate and available repayment terms will vary based on your financial profile. Our lowest rates are only available for the most credit qualified existing cosigned loan borrowers who receive the 0.25% Loyalty discount and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change.
Residents of Hawaii must request a loan of at least $1,501.
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option.
To be eligible for the Loyalty Discount, applicants must have previously obtained an Earnest Private Student Loan and apply using the same email address associated with that loan. Only one Loyalty Discount may be applied per eligible Earnest Private Student Loan. Not all applicants may qualify. This offer cannot be combined with Earnest's Rate Match program. Earnest may modify or discontinue this offer at any time and without notice, however, once a Loyalty Discount is earned, it will not be taken away.
Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
Earnest clients may skip a payment through a single, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you've made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement. Please note that skipping a payment is not guaranteed and is at Earnest's discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.
Funding U
Eligible borrowers
Eligible undergraduate borrowers
Loan amounts
Up to $20,000 per school year
Loan terms
5 or 10 years
Loan types
Fixed
Borrower protections
Forbearance options available
Co-signer required?
No
Terms apply.
If you apply with a co-signer, review the release options. Many lenders allow co-signers to be removed from the loan after the primary borrower makes a certain number of on-time payments.
Because you have too much debt
To calculate your DTI ratio, divide your total recurring monthly debts (rent or mortgage, personal loans, minimum credit card payments) by your gross monthly income (before tax) and multiply by 100.
You can lower your DTI ratio by paying down your bills or boosting your income. In addition, you can request a credit limit increase from a credit card issuer. Provided you don't rack up more charges, your ratio will drop automatically.
Because your loan debt is too small
While most lenders only work with borrowers with at least $10,000 in student debt, Upgrade will approve refinancing for loans as low as $1,000.
Accepts applicants with fair credit
There are also non-refinancing options, like a personal loan, debt consolidation and debt relief. You can also ask your current lender for a loan deferment or forbearance, or to extend your term to get lower monthly payments.
Because you have a history of late or missing payments
Making current payments is important, but if you can address other factors, such as improving your credit or lowering your DTI ratio, you may get a green light. A cosigner with strong credit can also improve your chances, though they will also be responsible for the loan.
There are also lenders that may still accept you if you have a high income, stable employment or significant assets.
Because you defaulted
Yrefy is one of the only lenders that will work with applicants who have defaulted on student loans. It offers fixed rates for loans of between $5,000 and $350,000, with no credit score requirement and the option to skip one monthly payment every 6 months (up to 12 times over the life of the loan).
Applicants need a steady income and a DTI ratio of 35% or lower.
Yrefy Student Loan Refinancing
Cost
5% origination fee
Eligible loans
Federal and private graduate and undergraduate loans, parent loans, Federal Parent Plus loans
Loan types
Fixed rate only
Fixed rates (APR)
1 – 5.99%
Loan terms
3 – 10 or 15 years
Loan amounts
$5,000 to $350,000
Minimum credit score
None
Minimum income
None
Allow for a co-signer
Yes
Terms apply.
Pros
- No application, late or prepayment fees
- Refinances defaulted student loans
- Can refinance without a degree
- three-minute rate check without credit impact
- Can skip one payment every six months without penalty.
Cons
- 5% origination fee
- Repayment terms over 10 years may not be available.
- Doesn’t refinance federal student loans
Because you're not a citizen or permanent resident
If you're in the U.S. on a visa, some lenders will approve refinancing if you have a U.S. citizen as a co-borrower.
Alternatives to student loan refinancing
If you can't get approved or secure a lower interest rate through refinancing, there are more options available.
Debt consolidation
Borrowers with multiple private student loans can streamline them into a single monthly payment with a debt consolidation loan, ideally at a lower rate.
LightStream approves debt consolidation loans for up to $100,000 and its Rate Beat Program will beat any competitor's offer by 0.10 percentage points if you have good credit.
We like that LightStream offers competitive APRs, no late or origination fees and long loan term options. But you can't prequalify and the loan minimum may be too high if you only need to borrow a small amount.
- Same-day funding available.
- Loan amounts up to $100,000.
- No origination fee or late fee.
- The minimum loan amount is $5,000.
- Prequalification not available.
- No option to pay your creditors directly.
Deferment or forbearance
Deferment and forbearance are more commonly associated with federal student loans, but many private lenders do offer one or both. Sallie Mae® offers deferment if you're in school, working an internship or participating in a residency, fellowship or clerkship.
- Loans available to part-time and continuing ed students
- Co-signer release after just 12 payments
- No origination fee
- Offers loans for a wide variety of educational needs including: bar study, medical school, residency and relocation costs, dental school, residency and relocation costs, nursing school/health professions, commercial flight school, coding boot camp and professional certifications
- No student loan refinancing
- Doesn't offer parent loans
- Hard credit check to prequalify
- Late payment fee
Debt relief
If you can't seem to make any headway with your private student loans, a debt relief (or debt settlement) company may be able to negotiate to get your balance significantly lowered.
You typically need at least $7,500 in debt to qualify and companies charge up to 25% of your enrolled debt, along with other fees. (Your credit score will also take a hit)
The best debt relief companies are transparent about their fee structure and will offer a free consultation to help you determine if it's the right course of action for you.
Student loan refinancing FAQs
How does student loan refinancing work?
What are the downsides of student loan refinancing?
If you are refinancing federal student loans into private ones, the primary downside is losing access to protections like income-driven repayment plans, deferment, forbearance and forgiveness. Even refinancing private loans may extend your term, increasing the total interest you pay.
How many times can you refinance a student loan?
There's no set number of times you can refinance a student loan, but lenders look for a consistent history of on-time payments. In addition, each application will involve a hard credit pull, which will temporarily lower your score slightly.
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