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Loans

Here are the 5 best student loan refinance companies of 2021

CNBC Select rounded up our top five lenders to refinance your student loans with low interest rates, no origination fees, flexible repayment terms and economic hardship protection.

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Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

Editor's Note: The APRs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC will update as changes are made public.

While a college degree usually guarantees better career opportunities, it also comes with a high price tag. Over 43 million Americans have student loan debt, and it can take years (sometimes decades) to pay off. And the higher your interest rate, the longer it can take to make a dent in your principal balance.

Refinancing, however, allows borrowers the chance to get a lower interest rate on their loans, reduce their monthly payments and save money in the long run. When you refinance your student loans, you essentially trade in your existing loan(s) for one new loan through a private lender, such as a bank.

Average interest rates vary widely, depending on the type of student loan you have. With federal student loans, your interest rate is fixed, meaning the rate doesn't change from what it was when you took out the loan. In the case of private student loans, your rate is determined by your lender, your credit score and whether you have a fixed or variable APR.

Interest rates on federal student loans (which about 92% of borrowers have) range from 2.75% to 5.30%, at the time this article was written. Interest rates on private student loans are generally higher, the average currently ranging from 3.34% to 12.99% fixed and 1.04% to 11.98% variable.

With the pause on federal student loan payments and interest extended through at least Sept. 30, 2021 as part of the government's pandemic relief programs, now isn't the best time to be refinancing your federal loans. But those with private loans, however, may want to consider it if they are paying a high interest rate.

To help guide you, CNBC Select analyzed and compared private student loan funding from national banks, credit unions and online lenders to rank your best options.

In this roundup, we found lenders that offer a wide selection of loan terms and interest rates to choose from. They charge no application or origination fees, have zero prepayment penalties and have flexible repayment terms, economic hardship payment options and autopay interest rate reductions.

When rating our top five, we considered the variety of loans offered, their advertised interest rates and eligibility requirements, any fees, rate discounts offered and customer service reviews.

The student loan refinance companies we selected for our ranking all offer some of the lowest and most competitive refinancing rates available, and applying online is a quick and easy process. (See our methodology for more information on how we chose the best student loan refinance companies.)

Best student loan refinance companies

Student loan refinance FAQs

Best overall

SoFi Student Loan Refinancing

On SoFi's secure site
  • Cost

    No origination fees to refinance

  • Eligible loans

    Federal, private, graduate and undergraduate loans, Parent PLUS loans, medical and dental residency loans

  • Loan types

    Variable and fixed

  • Variable rates (APR)

    From 2.24%; from 2.37% for medical/dental residents (rates include a 0.25% autopay discount)

  • Fixed rates (APR)

    From 2.99%; from 3.12% for medical/dental residents (rates include a 0.25% autopay discount)

  • Loan terms

    5, 7, 10, 15, 20 years

  • Loan amounts

    From $5,000; over $10,000 for medical/dental residency loans

  • Minimum credit score

    N/A

  • Minimum income

    N/A

  • Allow for a co-signer

    Yes

See our methodology, terms apply.

Pros

  • No application or origination fees to refinance
  • 0.25% autopay discount already applied
  • Soft credit pull when you prequalify
  • No prepayment penalties
  • Protections include: Unemployment protection (forbearance offered in 3-month increments, capped at 12 months), Covid forbearance of payments for a minimum of 90 days if experiencing financial hardship, loan deferment if going back to school, SoFi honors first 6 months of pre-existing grace period on loans looking to be refinanced
  • Offers $100 monthly payments during residency
  • SoFi has its own Career Advisory Group to help members look for new employment
  • Access to live customer support 7 days a week
  • SoFi members get career coaching, financial advice from planners, plus more for free
  • Unique member benefits like receive a 0.125% interest rate discount on any additional SoFi lending product
  • Offers up to $310 bonus referral program

Cons

  • No co-signer release option available
  • Loan size minimum of $5,000; over $10,000 for medical/dental residency loans

Best for having a co-signer

CommonBond Student Loan Refinancing

On CommonBond's secure site
  • Cost

    No origination fees to refinance

  • Eligible loans

    Federal, private, graduate and undergraduate loans, previously consolidated loans, corporate-sponsored student loans and international student loans

  • Loan types

    Variable and fixed

  • Variable rates (APR)

    2.51% to 6.86% (rates include a 0.25% autopay discount)

  • Fixed rates (APR)

    2.59% to 6.74% (rates include a 0.25% autopay discount)

  • Loan terms

    5, 10, 15, 20 years

  • Loan amounts

    Up to $500,000

  • Minimum credit score

    Not disclosed

  • Minimum income

    Not disclosed

  • Allow for a co-signer

    Yes

See our methodology, terms apply.

Pros

  • No origination fees to refinance
  • 0.25% autopay discount already applied
  • Soft credit pull when you prequalify
  • No prepayment penalties
  • Protections include: Up to 24 months of financial hardship forbearance over the life of your loan, academic deferment and grace period deferment
  • Has co-signer release option after 24 consecutive, on-time monthly payments of the loan's principal and interest
  • Offers a Hybrid Loan: Interest rate is fixed for first five years and for the remainder of the loan (last five years), interest rate is variable
  • Social incentive: When you refinance, CommonBond covers the cost of a child’s education in the developing world through partnership with Pencils of Promise

Cons

  • Late payment fee of 5% of the unpaid amount of the payment due or $10.00, whichever is less
  • Return check fee of $5.00, subject to state law restrictions

Best for fair credit score

Earnest Student Loan Refinancing

On Earnest's secure site
  • Cost

    No origination fees to refinance

  • Eligible loans

    Federal, private, graduate and undergraduate loans

  • Loan types

    Variable and fixed

  • Variable rates (APR)

    Starting at 1.99% (rates include a 0.25% autopay discount)

  • Fixed rates (APR)

    Starting at 2.98% (rates include a 0.25% autopay discount)

  • Loan terms

    Flexible terms anywhere between 5-20 years

  • Loan amounts

    A minimum of $5,000, up to $500,000 (residents of California must request to refinance $10,000 or more)

  • Minimum credit score

    650

  • Minimum income

    No income requirement

  • Allow for a co-signer

    No

See our methodology, terms apply.

Pros

  • No origination fees to refinance, as well as no late fees or disbursement fees
  • 0.25% autopay discount already applied
  • Soft credit pull when you prequalify
  • No prepayment penalties
  • Protections include: 9-month grace period
  • Applicants with fair credit can qualify
  • Loan customization includes choosing preferred payment amount based on your budget, selecting biweekly or monthly payments, increasing payment and/or adjusting payment date at any time
  • Allows qualified borrowers to skip one payment every 12 months and make it up later

Cons

  • Variable rates not available in AK, IL, MN, NH, OH, TN and TX
  • No co-signer release option available
  • Loan size minimum of $5,000 (residents of California must request to refinance $10,000 or more)

Best for parent loan refinancing

Education Loan Finance Student Loan Refinancing

Information about Education Loan Finance has been collected independently by CNBC and has not been reviewed or provided by Education Loan Finance prior to publication.
  • Cost

    No origination fees to refinance

  • Eligible loans

    Federal, private, graduate and undergraduate loans, Parent PLUS loans

  • Loan types

    Variable and fixed

  • Variable rates (APR)

    From 2.39% (rates include an autopay discount)

  • Fixed rates (APR)

    From 2.79% (rates include an autopay discount)

  • Loan terms

    From 5 to 20 years for student loan refinancing; 5, 7 or 10 years for parent loan refinancing

  • Loan amounts

    From $15,000

  • Minimum credit score

    N/A

  • Minimum income

    N/A

  • Allow for a co-signer

    Yes

See our methodology, terms apply.

Pros

  • No application fees, origination fees to refinance, loan guarantee fee
  • Autopay discount already applied
  • Soft credit pull when you prequalify
  • No prepayment penalties
  • Protections include: Deferment where they align your repayment start date to the expiration of the grace period on the federal student loans that you are refinancing, financial hardship or medical difficulty forbearance for up to 12 months
  • Offers parent loan refinancing: Allows you to combine both private and Parent PLUS loans
  • Borrowers are assigned a Personal Loan Advisor to guide them
  • Website claims that customers report saving an average of $272 every month and should see an average of $13,940 in total savings
  • Get $25 in your PayPal account when you refinance using your PayPal login
  • Offers $400 bonus referral program

Cons

  • No grace period offered
  • No co-signer release option available
  • Late charge fee is the lesser of 5% of the past due amount or $50
  • Returned check or insufficient funds charge of $30
  • Loan size minimum of $15,000

Best for medical school loan refinancing

Laurel Road Student Loan Refinancing

Information about Laurel Road has been collected independently by CNBC and has not been reviewed or provided by Laurel Road prior to publication.
  • Cost

    No origination fees to refinance

  • Eligible loans

    Federal, private, graduate and undergraduate loans, Parent PLUS loans, medical and dental residency/fellowship loans, plus special pricing and reduced rates for health-care professionals (physicians, dentists, optometrists and physician assistants)

  • Loan types

    Variable and fixed

  • Variable rates (APR)

    From 1.89%; from 2.28% for resident rates (rates include a 0.25% autopay discount)

  • Fixed rates (APR)

    From 2.80%; from 3.08% for resident rates (rates include a 0.25% autopay discount)

  • Loan terms

    5, 7, 10, 15, 20 years (but also offers any term below 20 years, subject to underwriting criteria)

  • Loan amounts

    For bachelor's degrees and higher, minimum $5,000; for eligible associate degrees in the health-care field, up to $50,000 in loans for non-ParentPlus refinance loans

  • Minimum credit score

    N/A

  • Minimum income

    N/A

  • Allow for a co-signer

    Yes

See our methodology, terms apply.

Pros

  • No origination fees to refinance
  • 0.25% autopay discount already applied
  • Soft credit pull when you prequalify
  • No prepayment penalties
  • Protections include: Financial hardship (such as job loss) forbearance for one or more 3-month time periods (have to wait minimum 12 months in between periods), Covid forbearance of 3 monthly payments (and option to request longer), natural disaster forbearance of up to 2 monthly payments, deferment for medical students up to 6 months after their residency and fellowships (total loan term including residency, fellowship and grace period must not exceed 20 years)
  • Medical students pay only $100 per month while in residency program or fellowship
  • Graduates with associate degrees in the health-care field can refinance
  • Offers up to $400 bonus referral program

Cons

  • No co-signer release option available
  • Late fee may be assessed if any part of a payment is not received within 15 days of the due date: will not exceed 5% of the late payment or $28, whichever is less
  • May be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds or a closed account
  • Loan size minimum of $5,000

Student loan refinance FAQs

What is student loan refinancing?

When you refinance your student loans, you trade in your current loan(s) for one new loan through a private lender.

If you have more than one student loan, once you refinance, your payments are then grouped together so you make only one monthly payment to one lender, instead of owing multiple monthly payments to various lenders. On top of getting a lower interest rate and streamlined payments, refinancing also lets you alter the payment plan on your refinanced student loan. Terms vary by lender, but borrowers can choose how aggressive they want to be in their debt payoff, whether it's five, 10 or 20 years.

How is my student loan refinancing rate determined?

The interest rates lenders advertise for student loan refinancing may not be the rate you receive. Lenders determine your APR based on a handful of factors, including your credit score, your income, your debt-to-income (DTI) ratio, your savings, whether you choose a variable or fixed rate and the length of your loan's term.

How does refinancing affect my credit?

When you refinance your student loan, lenders will pull your report to determine if you're a risky borrower, which is considered a hard inquiry. This may lower your credit score by five or so points, but it's likely to go back up as you continue to make on-time monthly payments on your new refinanced loan.

Many lenders as well as loan marketplaces offer prequalification tools where you can quickly input your personal information and see rate quotes from lenders without actually applying and affecting your credit. You'll be able to get an idea of your interest rate, repayment term and any fees. Choose the lender that offers you an interest rate considerably lower than the one you currently pay.

Should I refinance my student loans?

The decision of whether to refinance your student loans is a big one to make. A major reason to refinance is so that you'll save money. Many of the student loan lenders advertise big savings on their websites. For example, in 2020 the average savings for customers at Education Loan Finance was $272 per month — and $13,940 in total average savings in interest costs over the life of the loan. That's a pretty significant savings.

Before applying for refinancing, shop around for the best rates to see what you prequalify for. You can also use loan marketplaces like Credible to compare lenders.

You also want to make sure you're in good financial standing before you start applying for a refinance. To get the best rates, you'll want to meet the following requirements:

  • Good credit score
  • Stable income
  • Currently paying a high interest rate — anything at or above 10% — where you would be likely to save money through refinancing

You should also ask yourself the following questions:

  • Would you like to to pay off your loans faster if you could shorten your repayment term?
  • Would you like to make your loan payments more manageable if you could extend your repayment term?

Federal student loan borrowers looking to refinance should be aware that doing so with a private lender means you lose any protections you previously had with your federal loans, like income-driven repayment, possible student loan forgiveness and any current or future Covid-19 relief measures (such as the payment and interest rate pause).

Some private lenders (like the ones we mention on this list) offer their own kinds of payment protections, such as deferment or forbearance, so make sure you know your options before taking out a refinanced loan.

Is now a good time to refinance student loans?

Generally, student loan borrowers who are paying a high interest rate on their federal or private student loans may want to consider refinancing.

However, with the current suspension of federal student loan payments and interest through at least Sept. 2021, most financial experts don't recommend refinancing your federal student loans at this time.

It may be a good idea to refinance any private student loans if your interest rate is high. With federal loan rates the lowest in over a decade, private lenders are also lowering their APRs. These companies set their own interest rates, but they're influenced by the Fed's prime rate. Rate cuts thus typically translate into a decrease in the rates that private lenders offer. APRs on refinanced student loans currently range from 2.59% to 7.63% fixed and 1.99% to 6.86% variable.

If you took out a private student loan years ago when interest rates were higher than they currently are today, you should consider refinancing, especially if your credit score is better than when you applied for your last loan. This way, you're likely to score a lower rate and save money in the long run.

Our methodology

To determine which student loan refinance companies are the best for borrowers, CNBC Select analyzed and compared private student loan funding from national banks, credit unions and online lenders. We narrowed down our ranking by only considering those that offer low student loan refinancing rates and prequalification tools that don't hurt your credit.

While the companies we chose in this article consistently rank as having some of the more competitive interest rates for refinancing, we also compared each company on the following features:

  • Broad availability: All of the companies on our list refinance both federal and private student loans, and they each offer a variable and fixed interest rate to choose from.
  • Flexible loan terms: Each company provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your student loan.
  • No origination or signup fee: None of the companies on our list charge borrowers an upfront "origination fee" for refinancing your loan.
  • No early payoff penalties: The companies on our list do not charge borrowers for paying off loans early.
  • Streamlined application process: We made sure companies offered a fast online application process.
  • Co-signer options: Each company on our list allows for a co-signer if the direct borrower does not qualify for refinancing on their own.
  • Autopay discounts: All of the companies listed already calculate autopay discounts into their advertised rates.
  • Private student loan protections: Though you lose federal student loan benefits when you refinance, each company on our list offers some type of their own financial hardship protection for borrowers.
  • Loan sizes: The above companies refinance loans in an array of sizes, from $5,000 to $500,000. Each company advertises its respective loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be.
  • Credit requirements/eligibility: We took into consideration the minimum credit scores and income levels required if this information was available.
  • Customer support: Every company on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the student loan refinancing process.

After reviewing the above features, we sorted our recommendations by best for overall refinancing needs, having a co-signer, applying with a fair credit score, refinancing parent loans and medical school loans.

Note that the rates and fee structures for private student loan refinancing are not guaranteed forever; they are subject to change without notice and they often fluctuate in accordance with the Fed rate. Choosing a fixed-rate APR when you refinance will guarantee that your interest rate and monthly payment will remain consistent throughout the entire term of the loan.

Your refinanced rate depends on your credit score, income, debt-to-income (DTI) ratio, savings, payment history and overall financial health. To refinance your student loan(s), lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.