- When you refinance student loans, your old loans are paid off and combined into one, single loan with a new lender.
- Your new loan will have a new interest rate, length of repayment (e.g., 10 years), and terms (e.g., deferment during grad school.
- You might consider refinancing if you want to lower your interest rate, decrease your monthly payments, or switch from a fixed rate to a variable rate loan.
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Snowball’s Top Picks for Refinancing
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How to refinance in 3 steps
Is refinancing for you?
See how much you could save with our calculator
Schedule a free 15min consult with a refinancing expert
Discover ways to improve your application for a better rate
Evaluate lenders and check rates
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With recommended lenders, you can check rates without affecting your credit score
Pick the best lender for you based on rates and other benefits
A few days
Apply for a loan and wait for approval
Upload your documents
Once you close, make sure to celebrate!
You can refinance again if rates go down
Answers to your frequently asked questions
What is refinancing?
The first step is to understand the student loan refinancing process, and whether it makes sense for you.
Yes, and it’s often beneficial to do so if your interest rate is high, your monthly payments are unmanageable, or you have less favorable terms (e.g., no deferment during grad school).
Yes, but it might not make sense if you are taking advantage of the COVID-19 relief, public service loan forgiveness, income-based repayment plans, or deferment and forbearance.
Pros and cons of refinancing
Whether or not you should refinance your student loans depends entirely on your financial situation and on the type of loans you have.
By refinancing, you can take advantage of these options:
- Lowering your interest rate. You’ll be paying less interest month to month, which can add to large savings.
- Simplifying your monthly payments to a lender of your choice with one payment amount
- Lowering your monthly payment by choosing a longer term
- Changing from a variable to a fixed interest rate, so your interest will not change
- Having a more flexible lender if you go back to school or need to stop payments
You may not want to refinance because of these potential disadvantages:
- If you have federal loans, you will lose federal repayment protections, including the ability to stop payments if you can’t afford them for a longer period of time
- You lose the flexibility to change your payment plan, particularly if you can’t afford your payments
- If you are on a loan forgiveness program, you will no longer be eligible for the program
How much you will save on refinancing will depend on a number of factors including your current interest rate, your specific loans, and what offer you can get with refinancing lenders. You can check out our recommendation to see what refinancing could look like for you.