These top student loan refinance companies can save you hundreds of dollars in interest each month

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. Select 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. Although President Biden's announcement to forgive up to $20,000 worth of federal student loan debt per borrower will help, the majority of borrowers will still carry a balance after this aid. 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 — in some cases, thousands of dollars. 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 93% of borrowers have) range from 4.99% to 7.54%, at the time this article was written. Interest rates on private student loans are generally higher, the average currently ranging from 3.22% to 13.95% fixed and 1.29% to 12.99% variable.

With the upcoming student loan forgiveness and pause on federal student loan payments and interest extended through Dec. 31, 2022 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, 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 overall: SoFi Student Loan Refinancing
• Best for fair credit score: Earnest Student Loan Refinancing
• Best for having a co-signer: Citizens Bank Student Loan Refinancing
• Best for parent loan refinancing: Education Loan Finance Student Loan Refinancing
• Best for medical school loan refinancing: Laurel Road Student Loan Refinancing

• What is student loan refinancing?
• How is my student loan refinancing rate determined?
• How does refinancing affect my credit?
• Should I refinance my student loans?
• Can I refinance my student loans multiple times?
• Is now a good time to refinance student loans?

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.

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.

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.

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, student loan forgiveness and any current or future 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.

There's no limit on how many times you can refinance your student loan. In fact, one Select reporter refinanced their student loans six times and was able to save thousands in interest this way. The process to refinance student loans is quite simple and there usually aren't any costs or penalties associated with doing so.

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 Dec. 2022, most financial experts don't recommend refinancing your federal student loans at this time. You should also wait until your up to $20,000 in student loan forgiveness is processed.

It may be a good idea to refinance any private student loans if your interest rate is high. Although back on the rise, federal loan rates are still relatively low so private lenders are offering lower 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 3.22% to 13.95% fixed and 1.29% to 12.99% 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.

If you refinance your federal student loans, they will be taken on by a new private lender. Once you have private student loans, you will not be eligible for federal protections and benefits, including student loan forgiveness and the current moratorium on loan repayment.

To determine which student loan refinance companies are the best for borrowers, 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.