Student loan refinancing is a good way to lower your interest rates which means saving possibly thousands of dollars a year, it can also let you consolidate all your debt into one more easily managed payment.  It’s a bit of a complicated process so you should read and learn as much as possible about what student loan refinancing is and what federal loan protections you could lose.

 It also makes sense to consider current interest rates, your credit score, income and chance of a successful refinancing.

Not everyone can qualify to refinance their student debt, refinancing is done by private companies not the federal government.

Most student loan refinancing lenders will only lend to those with a good credit score at least 600 and a stable recurring income. If you're not currently in employment or have a low credit score, there are things you can do (including improving your credit score with companies like Tally!) 

A co-signer with a good income and strong credit profile can help you get the best student loan refinancing rates.

If you have a federal student loan you could lose certain protections and benefits (like repayment relief through Covid.) Federal student loans can provide debt forgiveness and income related repayment plans that private lenders won't offer. So be mindful of that before refinancing.

It depends a lot on your credit score and your income and interest rates in general change which are based on economic conditions. 

Refinance rates will also vary based on whether they are variable or fixed rates and the kind of lender. Variable rates start at 1.89% and fixed rates can start around 2.1% as of 2021 March, although these constantly change, so keep an eye on our tool above to find the best rates.

A variable rate is a rate that is subject to change as Fed and other interest rates get more expensive. So through Covid we've seen record low interest rates but as the economy recovers interest rates can bounce back. A variable rate is a risk and only makes sense if you don't have long till you've paid back your loan or if you're expecting a pay rise and want to reapply for a fixed rate loan soon.

A fixed rate loan is a safer option for refinancing, they offer fixed rates for a number of years typically 5-15 years so you can always know what you're going to pay. Fixed rates are typically more than variable rates.

The lowest we've seen accepted is 580 (check our lists to see the lenders that work with credit scores of this amount.)

However the average needed is 650, most institutions will do soft checks (meaning their checking of your credit won't affect your credit score.)

If you'd like to check your credit You can also check your credit score at Credit Karma, Equifax, or Credit Sesame.

It depends hugely on your annual income and credit score, if they don't meet a lenders requirements you can always try and get a close friend or family member to help you.

The co-signer is taking on a big risk , but the better their credit profile the better deal you can get.

Even if you don't need a co-signer it can help you get a lower interest than you'd be able to get alone.

In most cases yes lenders usually have a minimum income requirement, of course you can lower this amount with a co-signer who is willing to be responsible for the loan if you default.

Most lenders will allow cosigners to be released from financial responsibility for a student loan after certain number requirements are satisfied. For example, after you make regular, on-time student loan payments, the cosigner may be able to be released from the student loan. Most lenders permit the student loan borrower to apply for student loan refinance in their names only, which then releases the cosigner from financial responsibility.You can check with your lender to determine if they offer a cosigner release option and the requirements.

Some lenders may charge an origination fee which is essentially a fee to offer the new loan. They may also charge early repayment fees, but not all lenders charge these so it can be a telling sign your new lender may not be a top notch lender.

Most lenders will have degree requirements and or restrictions on which universities they recognise. Many of the Credit Unions who offer refinancing also have jurisdictional or employer requirements (ie you must work for a named employer or go to a named school.)

Yes in most cases lenders will have a minimum from about $2000-$5000 and a maximum too, usually dependent on the degree (medical degrees have a higher maximum than others.)

Additionally, some lenders could enforce maximum refinancing levels at their own discretion, and these maximum limits are essentially determined by the student borrower's debt-to-income ratio, credit score, and education level. Each lender will be different with their minimum and maximum allowances.
 

There is no limit to how many applications you can make to refinance your student loan.

The terms are dependent on the lender you go for, but typically range from 5-20 years fixed or variable. Usually the longer term refinancing has smaller loan repayment amounts but higher interests rates, so you pay more over a longer time.

The option to delay or defer student loans payments rests with the individual lender. With many lenders, the answer is yes: you can delay student loan payments if you lose your job. Some lenders offer 12 months of forbearance, while other lenders offer forbearance on a case-by-case basis.

Loan consolidation lets you bundle together multiple loans into one with a fixed rate, so you only pay one monthly payment instead of multiple payments.

You can consolidate most federal loans at StudentLoans.gov or if you have private loans you can find private lenders who offer a similar service. You can't consolidate private and public loans together though.

It can be as fast a two weeks or can take up to 2 months depending on if you're consolidating federal debt or private debt. It also depends alot on the lender.

You can transfer student loans to another lender if you have the requisite salary and credit score. But be sure to understand the benefits of a public loan before transferring  a public loan to another lender.

You can see all the lenders you can transfer to here.

There are a number of lenders that will refinance your student loan if you're from Minnesota, live or work there or studied there.

SELF Refi is a lender that works exclusively with Minnesota based residents. Novation Credit Union also works with borrowers in certain Minnesota counties.

See the full list of student loan refinancing offers for Minnesota.

Will consolidating student loans hurt my credit?

In most cases consolidating itself won't hurt your credit score, and could improve it if you're making it easier and cheaper to pay your loans. The only case it could hurt your credit is if you apply to 5-10 lenders and they all do hard credit checks. You should definitely shop around for loans but make sure when you do, you ask the lender to do a soft credit pull which won't affect your credit score.

Will my credit score increase after student loan consolidation?

Maybe, being able to pay consistent payments with a lower interest rate will help your credit score! Having fewer debts open certainty will improve your credit.

How many times can you refinance your student debt is a good question to ask, because as you get further into the work force your situation continues to improve and thus you'll get access to cheaper loans.

The answer is as much as you like,but there are two caveats. Firstly you need to make sure you aren't doing it so much that your credit is suffering (each lender you look to work with that does a hard credit pull which has a temporary negative affect on your credit for about a year, that doesn't mean you can't refinance more than every year but to get a better rate you'd need to have more salary or a better credit score.)

You should also check that:

a) Is your credit score better than it was when you first refinanced?
b) Are interest rates lower? (you can check our list here to answer this.)
c) Is your salary higher than it was when you refinanced?
d) Do you have  co-signer, if so will they re co-sign your new loan?

If your answers here are yes and interest rates are lower then go ahead and refinance!

There are many lenders that also refinance medical school loans, check out:

College Ave Loans
Citizens Bank
Common Bond
Elfi
Mefa
Penfed
and many more check out our full list here and find medical school loan refinance lenders.

Earnest and SoFi both have very good ratings but lets dive deeper into the differences between them.

SoFi requires a credit score of 680 and has a minimum loan amount of $10,000 and maximum of $500,000. There fixed rates as of Feb 2021 are 2.25 - 5.59% and their variable rates are 2.25 - 5.59% their maximum loans terms are 20 years. SoFi has no minimum income.

Earnest requires a credit score of 650 and has a minimum loan amount of $5,000 and maximum of $500,000. There fixed rates as of Feb 2021 are 2.98 - 5.89% and their variable rates are 1.99- 5.74% their maximum loans terms are 20 years. Their minimum income is $35,000.

Both Earnest and SoFi let you postpone them for 12 months.

Earnest Cons

Earnest Pros

SoFi Cons

SoFi Pros