Category: Student Loan Refinancing

A great way to reduce your student loan debt is to refinance. An important part of that is looking for a good lender that will offer you good terms. In fact, the best refinance companies are going to give you the best terms. But, what do you even look for? And where do you start?

What to Look for in a Student Loan Refinancing Company 

The purpose of refinancing your student loan(s) is to secure a better interest rate or terms.

So, when looking for a student loan refinancing company, you first want to look at their terms and policies. This includes their requirements for approval, the loan terms, cosigner policies, and fees. Here’s a couple things to consider:

• Is the interest rate on the loan lower than what you currently have?
• Does the lender offer more favorable terms (ie. a longer repayment period) than what you currently have?

Additionally, find out what kind of benefits they offer if any. Do they offer help in the event of financial hardship like the loss of a job? This includes things like forbearance and deferment options.

Make sure the new loan you select offers you a better interest rate or more favorable terms than what you currently have. If it does neither, then refinancing is not an advantageous decision.

Best Student Loan Refinancing Companies

To help you in your search, we’ve made a list of the best student loan refinancing companies.

Arkansas Student Loan Authority (ASLA)

The Arkansas Student Loan Authority offers loans to Arkansas residents or students who have attended a school in the state. They offer competitive rates and flexible terms to those who qualify. ASLA is best if you either live in or attended school in Arkansas and want competitive interest rates and flexible loan terms. 

Brazos 

Brazos is a nonprofit lender that provides student loan refinancing to Texas residents. Students must have at least an undergraduate degree in order to take out a refinance loan with them. Brazos offers competitive interest rates and flexible terms to those who qualify. Brazos is best if you are a Texas resident and have at least an undergraduate degree, though the degree does not have to be from a Texas school.

College Ave

College Ave offers student loan refinancing and is known for their strong customer service, competitive interest rates, and flexible loan terms. For example, College Ave offers nonstandard 6- or 9-year loans, which is unlike many other private lenders. College Ave is best if you want access to good customer service and a flexible repayment term that better matches your budget.

Earnest

Earnest offers student loan refinancing with customizable repayment plans where you can choose your repayment term down to the month. Earnest also has forward-looking eligibility criteria and offers competitive interest rates. Earnest is best if you don’t have a cosigner and want a repayment plan customized to your situation. 

INvestED

INvestED offers student loan refinancing to Indiana residents and students who attended school in Indiana. They offer a variety of repayment options, competitive interest rates, and flexible terms. INvestED is best if you are an Indiana resident or attended school in Indiana and want access to different repayment options.

ISL Education Lending

ISL Education Lending is a nonprofit student lender offering both private student loans and student loan refinancing. ISL Education Lending is best for borrowers who want to work with a nonprofit lender, want competitive interest rates, or want to refinance without having a degree.

LendKey

LendKey’s student loan refinancing is a good option if you have graduated, have a strong credit score, and have stable income. A great feature of LendKey is that they will connect you with a network of 100+ lesser known credit unions and community banks so you can work with and take out loans from smaller institutions. LendKey is best if you are a creditworthy borrower and want to work with smaller lenders with low rates and good customer service.

Nelnet Bank

Nelnet Bank offers student loan refinancing for both private and federal student loans, including parent PLUS loans. Nelnet Bank also offers a flexible forbearance policy and competitive interest rates. Nelnet Bank is best if you are looking for competitive rates and want the ability to refinance student loans, including parent PLUS loans. 

SoFi

SoFi is one of the biggest student loan refinancing companies in the industry. You have to have an associate’s degree or higher to qualify, but if you do qualify, you’ll have access to a wide variety of repayment options and exclusive member benefits. SoFi is best if you have at least an associate’s degree, are a creditworthy borrower, and want to take advantage of their benefits. 

Final Thoughts from the Nest 

While there are a variety of factors that make a lender or refinance loan good, the best loan will always be the one that works best for you. To discover the best refinancing companies and which option is best for you, complete the Sparrow application.

In just a few minutes, we’ll show you what refinance loans you qualify for with 15+ top lenders. Then, we’ll help guide you through the process of selecting the best refinance loan so you can be confident in your lending decision.

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Refinancing your student loans can save you thousands over the life of your loan. By refinancing, you can swap your current student loan(s) for a new loan with a better interest rate or terms.

If you have excellent credit or stable income, or a cosigner who does, you may benefit from refinancing your student debt. To begin the process of refinancing, explore the best student loan refinancing options from our lending partners below.

Compare Student Loan Refinancing Rates

Finding the right refinancing option should be a simple. Use Sparrow to find the best student loan refinance option for you. Sparrow shows you the most important information and simplifies the entire process.

>> MORE: Compare your personalized student loan refinance options

Arkansas Student Loan Authority (ASLA)

The Arkansas Student Loan Authority offers student loan refinancing to Arkansas residents or students who have attended a school in the state. They offer competitive rates and flexible terms to those who qualify. ASLA is best if you either live in or attended school in Arkansas and want competitive interest rates and flexible loan terms. 

Check your rate with ASLA.

Brazos 

Brazos is a nonprofit lender that provides student loan refinancing to Texas residents. While you do need to have at least an undergraduate degree to refinance with Brazos, you will receive competitive interest rates and flexible terms if you qualify. Brazos is best if you are a Texas resident and have at least an undergraduate degree, though the degree does not have to be from a Texas school.

Check your rate with Brazos.

College Ave

College Ave offers student loan refinancing and is known for their strong customer service, competitive interest rates, and flexible loan terms. For example, College Ave offers 6- or 9-year loans, which is unlike many other private lenders. College Ave is best if you want access to good customer service and a flexible repayment term that better matches your budget.

Check your rate with College Ave.

Earnest

Earnest offers student loan refinancing with customizable repayment plans, allowing you to choose your repayment term down to the month. Earnest also has forward-looking eligibility requirements and offers competitive interest rates. Earnest is best if you don’t have a cosigner and want a repayment plan customized to your situation. 

Check your rate with Earnest.

INvestED

INvestED offers student loan refinancing to Indiana residents and students who attended school in Indiana. They offer a variety of repayment options, competitive interest rates, and flexible terms. INvestED is best if you live in Indiana or attended school in Indiana and want access to different repayment options.

Check your rate with INvestED.

ISL Education Lending

ISL Education Lending is a nonprofit student lender offering both private student loans and student loan refinancing. ISL Education Lending is best if you want to work with a nonprofit lender, want competitive interest rates, or want to refinance without having a degree.

Check your rate with ISL Education Lending.

LendKey

LendKey’s student loan refinancing is a good option if you have graduated, have a strong credit score, and have stable income. A great feature of LendKey is that they will connect you with a network of 100+ lesser known credit unions and community banks so you can work with and take out loans from smaller institutions. LendKey is best if you are a creditworthy borrower and want to work with smaller lenders with low rates and good customer service.

Check your rate with LendKey.

Nelnet Bank

Nelnet Bank offers student loan refinancing for both private and federal student loans, including Parent PLUS loans. Nelnet Bank also offers a flexible forbearance policy and competitive interest rates. Nelnet Bank is best if you are looking for competitive rates and want the ability to refinance Parent PLUS loans. 

Check your rate with Nelnet Bank.

SoFi

SoFi is one of the biggest student loan refinancing companies in the industry. You have to have an associate’s degree or higher to qualify, but if you do qualify, you’ll have access to a wide variety of repayment options and exclusive member benefits. SoFi is best if you have at least an associate’s degree, are a creditworthy borrower, and want to take advantage of their borrower benefits.

Check your rate with SoFi.

Frequently Asked Questions About Student Loan Refinancing

Can I refinance just my private student loans?

Yes. You can refinance just your private student loans.

Is it a good time to refinance private student loans?

Yes. You can refinance private student loans at any time. If you have federal student loans, however, we recommend waiting until the federal student loan forbearance is over.

>> MORE: When should I refinance my student loan?

Can you refinance a private student loan into a federal one?

No. Because private student loans are provided by private financial institutions, you cannot transfer them to federal student lenders. However, you can refinance a federal student loan into a private student loan.

What is a good interest rate for student loan refinancing?

The goal of student loan refinancing is to secure a lower interest rate or better terms than what you currently have. So, any interest rate lower than what you currently have would be a good interest rate.

>> MORE: What is the average student loan interest rate?

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products shown here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

According to Forbes, the median total cost of becoming a doctor in 2020 was between $255,517 to $337,584, leaving many with hefty student debt totals.

If you’re looking to lower the costs of your medical school loans, consider loan refinancing. Refinancing is the process of taking out a new loan with better terms to repay your current debt. By scoring a lower interest rate or monthly payment, you may be able to alleviate some of the financial burden your medical school loans are causing you.

Keep reading for the complete guide on how, when, and where to refinance medical school loans.

When Can You Refinance Medical School Loans?

You can refinance medical school loans during residency or early in your career as an attending physician. However, the timeline of when you can refinance ultimately depends on your lender. 

While refinancing as early as possible will be the most advantageous thing to do, the most important thing is that you refinance when you are in the financial standing to do so. 

If you can get more competitive terms by refinancing during residency but it puts you in a tough financial spot, it may not be the optimal thing to do. It’s better to hold off on refinancing if doing so would cause you to miss a payment or wind up in loan default. 

Who Should Refinance Medical School Loans?

You should refinance your medical school loans if:

• You borrowed private student loans.
• You are not/will not use your federal loan benefits.
• You have better, improved credit from when you first borrowed your loans. 

If you are a federal borrower, keep in mind that refinancing will convert your loans from federal to private loans. This means you will lose any federal benefits you have, such as an income-driven repayment plan, potential loan forgiveness, or flexible loan deferment/forbearance.

The Process of Refinancing

If you decide you want to refinance your medical school loans, you’ll want to take the following steps.

Determine If It Makes Sense for You

First and foremost, you should only refinance medical school loans if it will benefit you. 

If you have federal loans, note that you will lose your federal benefits if you decide to refinance. If you don’t plan to use them, refinancing your loans for a better interest rate or monthly payment may outweigh any federal benefits you have. 

If you have private loans, consider your current financial standing. If you have a better credit score from when you last applied and can qualify for better loan terms, refinancing may be the way to go. If you do not qualify for better loan terms, there may be no point in refinancing. 

Compare Prequalification Offers

To be sure refinancing makes sense for you, see what you qualify for before submitting a formal loan refinance application with a lender. You can do this by completing Sparrow’s free, 3-minute prequalification application.

We’ll show you what loan refinancing options you qualify for across 15+ private lenders — without damaging your credit score. 

Submit a Formal Loan Application

After determining which lender you’d like to refinance with, submit your formal loan application. 

You’ll want to gather the following information for a speedy application process:

• Your Social Security Number 
• Optional: Your cosigner’s Social Security Number (You do not need this information if you are not borrowing with a cosigner.)
• Tax Information
  • Tax Returns
  • IRS W-2
  • Optional: Cosigner’s tax information (Again, you do not need this information if you are not borrowing with a cosigner.)
• Personal Income Information
• Information on any financial assets you have, including:
  • Cash in your checking and/or savings account
  • Investments (stocks, bonds, etc.)
  • Business assets
  • Mortgages

Start Making Loan Payments After Your New Loan Is Approved

Once your new loan is approved and you’ve signed your promissory note, your new lender will pay off your old lender. Then, you can start making loan payments on your new loan as outlined in your loan contract. 

Best Lenders to Refinance Medical School Loans

Arkansas Student Loan Authority (ASLA)

If you’re an Arkansas resident looking to refinance your medical loans, consider the Arkansas Student Loan Authority. ASLA is a state entity that offers loan refinancing for Arkansas residents. 

Fixed APR range: 3.50% to 7.48%
Variable APR range: N/A
Refinancing amount: $5,000 to $250,000 

Apply with ASLA.

Brazos

Brazos is a non-profit lender that offers competitive loan refinancing terms for Texas residents. To qualify with Brazos, it is recommended that you have a strong credit score, a steady income, and at least a bachelor’s degree. 

Fixed APR range: 4.90% to 6.99%
Variable APR range: 5.32% to 9.12%
Refinancing amount: $10,000 to $400,000

Apply with Brazos.

College Ave

College Ave is a non-profit that offers competitive interest rates, zero fees, and a cosigner release option for qualifying borrowers. A highlight about College Ave is that they do not require borrowers to have a degree or qualify for financial aid. So, if you did not complete your medical degree but still have your loans, College Ave will be a great option for you.

Fixed APR range: 6.99% to 11.99%
Variable APR range: 6.99% to 11.99%
Refinancing amount: $5,000 to $300,000, depending on degree type

Apply with College Ave.

Earnest

Refinancing with Earnest gives you access to merit-based rates, customizable payment, and loan terms, as well as the option to skip one monthly payment every year. 

Fixed APR range: 4.96% to 9.79% (including 0.25% auto-pay discount)
Variable APR range: 5.49 % to 9.74% (including 0.25% auto-pay discount)
Refinancing amount: $5,000 ($10,000 for California residents) to $500,000

Apply with Earnest.

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EdvestinU

EdvestinU is a student loan program under the New Hampshire Higher Education Loan Corp, a non-profit based in New Hampshire. You can refinance your student loans with EdvestinU without a degree and have access to special perks if you are a New Hampshire resident. You must be a U.S. citizen or permanent resident who qualifies for financial aid.

Fixed APR range: 4.41% to 7.78%
Variable APR range: 8.04% to 9.79%
Refinancing amount: $7,500 to $200,000

Apply with EdvestinU.

INvestED

INvestED is best for students who are Indiana residents or attend school in Indiana. You must be a U.S. citizen or qualifying resident who receives financial aid at your academic institution. The lender offers competitive interest rates, 36 months of academic deferment, and does not require a degree to qualify. 

Fixed APR range: 5.85% to 9.48%
Variable APR range: 8.63% to 12.27%
Refinancing amount: $5,000 to $250,000

Apply with INvestED.

ISL Education Lending

ISL Education Lending is a non-profit that offers loan refinancing options with competitive interest rates, zero fees, and a cosigner release option. You also do not need a degree to qualify, which is a perk. 

You must be a U.S. citizen or permanent resident who is not based in Maine or Oregon to qualify.

Fixed APR range: 3.94% to 8.48%
Variable APR range: N/A
Refinancing amount: $5,000 ($10,000 for California residents) to $300,000

Apply with ISL Education.

LendKey

LendKey connects borrowers with small lenders, credit unions, and community banks. You can refinance with LendKey if you’re a graduate student with a steady income and strong credit history.

Fixed APR range: 7.11% to 11.18%
Variable APR range: N/A
Refinancing amount: $5,000 to $300,000 (depending on degree type)

Apply with LendKey.

MPOWER

MPOWER is a great lender that refinances loans for domestic, international, and DACA undergraduate and graduate students. To refinance with MPOWER, your loan(s) must not be cosigned. 

Fixed APR range: 11.74% (12.69% APR)
Variable APR range: N/A
Refinancing amount: $2,001 to $100,000

Apply with MPOWER.

Nelnet Bank

Nelnet Bank offers competitive terms, including flexible repayment options, a cosigner release option, 12 months of forbearance, and the ability to refinance your parent PLUS loan in your name. 

To refinance your student loans with Nelnet Bank, you must be a U.S. citizen or a permanent resident with a Social Security Number. You also must have obtained at least a bachelor’s degree. 

Fixed APR range: 7.12% to 11.19%
Variable APR range: 7.60% to 14.50%
Refinancing amount: $5,000 to $225,000

Apply with Nelnet Bank.

SoFi

SoFi is a well-established name in the student loan industry that offers one of the most competitive rates for loan refinancing. To qualify, you must have an associate’s degree or higher. 

SoFi also allows borrowers to refinance parent PLUS loans in their own name, offers loan forbearance and deferment, and doesn’t have any origination fees.

Fixed APR range: 4.49% to 8.99%
Variable APR range: 4.49% to 8.99%
Refinancing amount: $5,000 to your total outstanding balance

Apply with SoFi.

Closing Thoughts From the Nest

Refinancing medical school loans is a great way to save money in the long run. Like all things, doing your due diligence is crucial. Look into all of your refinancing options so you know you are getting the best offer on the market.

Student loan refinancing is one of the best ways to save money when paying off your student loans. By refinancing, you’d take out a new loan with more favorable terms to repay your current debt. Ideally, this new loan will have a lower interest rate or monthly payment (or both). Although you may be wondering what credit score is needed to refinance your student loan.

Unfortunately, not everyone is eligible. Oftentimes, you need a strong credit score to refinance student loans, along with other qualifications to prove that you are a creditworthy borrower. Here’s what you need to know.

Do You Need Good Credit to Refinance Student Loans?

Yes, student loan lenders will generally require borrowers to have good credit to qualify for loan refinancing. This usually means a credit score of 700 or higher.

Good credit not only determines whether you are eligible for loan refinancing, but can influence how competitive your interest rate is. Certain lenders will refinance student loans for borrowers with weak credit, but the interest rates on these loans are usually higher. 

If you want to refinance your loans, it’s crucial to look across multiple lenders to make sure you’re getting the most competitive terms. 

>> MORE: Find what student loan refinance rates you qualify for if you have bad credit

Credit Requirements of Top Lenders

Each lender will have its own unique credit requirements for refinancing. We’ve compiled a list of top lenders to make the search easier for you.

>> MORE: Compare credit score requirements to refinance your student loans

Arkansas Student Loan Authority (ASLA)

If you’re an Arkansas resident looking to refinance your medical loans, consider the Arkansas Student Loan Authority. ASLA is a state entity that offers loan refinancing for Arkansas residents. 

Fixed APR range: 3.50% to 7.48%
Variable APR range: N/A
Refinancing amount: $5,000 to $250,000 

Apply with ASLA.

Brazos

Brazos is a non-profit lender that offers competitive loan refinancing terms for Texas residents. To qualify with Brazos, it is recommended that you have a strong credit score, a steady income, and at least a bachelor’s degree. 

Fixed APR range: 4.90% to 6.99%
Variable APR range: 5.32% to 9.12%
Refinancing amount: $10,000 to $400,000

Apply with Brazos.

College Ave

College Ave offers competitive interest rates, zero fees, on-site loan servicing, and a cosigner release option for qualifying borrowers. A highlight about College Ave is that they do not require borrowers to have a degree or qualify for financial aid.

You must be a U.S. citizen or a permanent resident who is not based in Maine or Oregon to qualify for loan refinancing with College Ave.

Fixed APR range: 6.99% to 11.99%
Variable APR range: 6.99% to 11.99%
Refinancing amount: $5,000 to $300,000, depending on degree type

Apply with College Ave.

Earnest

Earnest is well-known in the student loan industry and is backed by competitive refinancing terms and student loans. By refinancing your student loans with Earnest, you have access to merit-based rates, customizable payments and loan terms, as well as the option to skip one monthly payment every year. 

Refinancing is not available in Kentucky and Nevada, and you will not have the option to add a cosigner to your application.

Fixed APR range: 4.96% to 9.79% (including 0.25% auto-pay discount)
Variable APR range: 5.49% to 7.94% (including 0.25% auto-pay discount)
Refinancing amount: $5,000 ($10,000 for California residents) to $500,000

Apply with Earnest.

EdvestinU

EdvestinU is a student loan program under the New Hampshire Higher Education Loan Corp, a non-profit based in New Hampshire. You can refinance your student loans with EdvestinU without a degree and have access to special perks if you are a New Hampshire resident. You must be a U.S. citizen or permanent resident who qualifies for financial aid.

Fixed APR range: 4.41% to 7.78%
Variable APR range: 8.04% to 9.79%
Refinancing amount: $7,500 to $200,000

Apply with EdvestinU.

INvestED

INvestED is best for students who are Indiana residents or attend school in Indiana. You must be a U.S. citizen or qualifying resident who receives financial aid at your academic institution. The lender offers competitive interest rates, 36 months of academic deferment, and does not require a degree to qualify. 

Fixed APR range: 5.85% to 9.48%
Variable APR range: 8.63% to 12.27%
Refinancing amount: $5,000 to $250,000

Apply with INvestED.

ISL Education Lending

ISL Education Lending is a non-profit that offers loan refinancing options with competitive interest rates, zero fees, and a cosigner release option. You also do not need a degree to qualify, which is a perk. 

You must be a U.S. citizen or permanent resident who is not based in Maine or Oregon to qualify.

Fixed APR range: 3.94% to 8.48%
Variable APR range: N/A
Refinancing amount: $5,000 ($10,000 for California residents) to $300,000

Apply with ISL Education.

LendKey

LendKey connects borrowers with small lenders, credit unions, and community banks. You can refinance with LendKey if you’re a graduate student with a steady income and strong credit history.

Fixed APR range: 4.99% to 10.68%
Variable APR range: 4.54% to 7.39%
Refinancing amount: $5,000 to $300,000 (depending on degree type)

Apply with LendKey.

MPOWER

MPOWER is a great lender that refinances loans for domestic, international, and DACA undergraduate and graduate students. To refinance with MPOWER, your loan(s) must not be cosigned. 

Fixed APR range: 11.74% (12.69% APR)
Variable APR range: N/A
Refinancing amount: $2,001 to $100,000

Apply with MPOWER.

Nelnet Bank

Nelnet Bank is an online bank that provides loan refinancing for qualifying borrowers. They offer competitive terms, including flexible repayment options, a cosigner release option, 12 months of forbearance, and the ability to refinance your parent PLUS loan in your name. 

To refinance your student loans with Nelnet Bank, you must be a U.S. citizen or a permanent resident with a Social Security Number. You also must have at least a bachelor’s degree. 

Fixed APR range: 7.12% to 11.19%
Variable APR range: 7.60% to 14.50%
Refinancing amount: $5,000 to $225,000

Apply with Nelnet Bank.

SoFi

SoFi is a well-established name in the student loan industry that offers one of the most competitive rates for loan refinancing. To qualify, you must have an associate’s degree or higher. 

SoFi also allows borrowers to refinance parent PLUS loans in their own name, offers loan forbearance and deferment, and doesn’t have any origination fees.

Fixed APR range: 4.49% to 8.99%
Variable APR range: 4.49% to 8.99%
Refinancing amount: $5,000 to your total outstanding balance

Apply with SoFi.

Eligibility Requirements to Refinance Student Loans

While there is a minimum credit score to refinance student loans for many lenders, your credit score isn’t the only consideration. Here are a few other factors that impact your eligibility:

A Strong Credit History

A strong credit history generally consists of the following:

• On-time and in-full loan payments
• No history of default 
• No history of bankruptcy
• No history of delinquency

Your credit history shows your reliability as a borrower. The stronger your credit history is, the easier it is for you to secure competitive interest rates and loan terms. 

>> MORE: Refinance my student loan today

Consistent Income

Having a steady, consistent income will show lenders that you have a stream of capital you can use to make loan payments. 

A Low Debt-to-Income (DTI) Ratio

Your debt-to-Income (DTI) ratio shows the proportion of debt and income that you have. To calculate your DTI, divide your monthly debt payments by your gross monthly income. 

For example, let’s say you have $2,000 in monthly payments for outstanding debt and make a monthly income of $5,000. If you divide $2,000 by $5,000, you get .4, which is a DTI of 40%.

If you have a lower DTI, this demonstrates that you make more money than you owe. However, if you have a high DTI, this shows lenders that you owe more than you make. A DTI of 35% or less is considered a good DTI.

Proof of Graduation

Generally, lenders will require borrowers to have a degree to be eligible for loan refinancing. However, there are a few lenders that don’t have this requirement.

What is the Credit Score Requirement to Refinance Student Loans?

It depends. For example, based on the lenders above, the required credit score to refinance student loans varies from 640 to 720. However, the better your score, the better terms you are likely to receive.

What to Do If You Don’t Have the Credit Score to Refinance Your Student Loans?

If you don’t meet the credit requirements to be eligible for student loan refinancing, don’t fret. You may still be able to qualify by adding a cosigner to your application. 

A cosigner is an individual who agrees to take responsibility for your loan if you fail to make payments on it. Generally, a cosigner is an immediate family member, relative, or close friend. 

Once you identify an individual who is willing to be a cosigner for you, you’ll want to compare the options that allow you to add a cosigner. Look at terms such as interest rate, cosigner release options, repayment terms, and more. Consider using Sparrow as a tool to compare your options and see how different cosigners impact the loan terms. 

>> MORE: What is a student loan cosigner?

Closing Thoughts From the Nest

As you explore your loan refinancing options, remember to compare your options across interest rates, repayment plans, borrower protections, and other important considerations. Loan refinancing is a beneficial thing to do, but you’ll want to find the best option for your personal and financial circumstances.

You don’t have to make this decision alone. Sparrow’s form allows you to find the best student loans with the best interest rates for you. The platform makes it easy for you to compare real pre-qualified rates without having to apply with lenders one-by-one. Save time by finding the ideal interest rate for you with Sparrow!

Sparrow aims to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

As a borrower, refinancing your student loans can be beneficial. For example, borrowers who use Sparrow to refinance save, on average, $17,000 over the life of their loan. 

That said, the savings can vary greatly depending on the borrower. With that in mind, you might be wondering, “Is refinancing student loans worth it?.”

It’s always a good choice to explore your options to make a financially sound decision for yourself. To determine whether refinancing is worth it for you, here’s what you should know.

How Student Loan Refinancing Works

Loan refinancing is the process of taking out a new loan to pay for your current debt. The new loan should have more favorable terms, such as a lower interest rate or monthly loan payment.

For example, let’s say you currently have a student loan of $80,000 with an 8% interest rate and a 10-year repayment plan. You decide to refinance and qualify for a new loan of $80,000 with a 5% interest rate, with a 15-year repayment plan.

Through refinancing, you have a new loan with a lower interest and longer repayment period.

To refinance your student loans, you need to submit a formal application to the lender of your choice. Generally, lenders are looking for borrowers who have a strong credit history and a low debt-to-income (DTI) ratio.

The Pros and Cons of Refinancing

To better understand if refinancing student loans is worth it for you, consider the pros and cons:

Pros of Refinancing

You Can Have Lower Monthly Payments

If your student loan payments are too high, refinancing can help relieve the financial strain. You can extend your repayment plan to reduce monthly payments and pay the loan over a longer period of time.

You Can Save More Money

By refinancing to a lower interest rate, you can save more money in the long run.

For example, let’s say you currently have a student loan of $80,000 with an 8% interest rate and a 10-year repayment plan. You decide to refinance and qualify for a new loan of $80,000 with a 5% interest rate.

After refinancing, instead of paying $36,474.49 in interest with a 8% interest rate, you’d only need to pay $21,822.89, saving you roughly $15,000.

You Can Pay Off The Loan Quicker

Just like you can extend your repayment period through refinancing, you can shorten it if you want to pay off the loan quicker. This will mean that your monthly payments will be higher, but if your financial situation allows for this increase, it may be desirable for some borrowers.

You Don’t Qualify for Student Loan Forgiveness

Refinancing may be the way to go if:

• You have private student loans, which do not qualify for loan forgiveness.
• You do not have an income-driven repayment plan for your federal loans.
• You do not work in a qualifying public service position for Public Service Loan Forgiveness. 

Refinancing is done through private student loans. If you opt to refinance a federal student loan into a private student loan, you will lose the benefits that come with federal student loans. However, if you plan to refinance a private student loan, these benefits are not at risk.

Cons of Refinancing

You Can Lose Federal Borrower Protections

If you refinance your federal student loans, they will become private loans. This means that you’ll lose out on federal borrower protections, including the opportunity for loan forgiveness, more flexible repayment plans, and loan deferment and forbearance options.

You Can’t Get a Lower Interest Rate And/Or Monthly Payment

If you don’t have a high enough credit score or a cosigner with a strong credit history, you may not qualify for a lower interest rate and/or monthly payment. If this is the case, you shouldn’t refinance your student loans because you wouldn’t be gaining anything from doing so. 

You’re Almost Done Paying Off Your Student Loans

If you only have a few more payments left on your student loans, it may be better to not refinance your loans. When you refinance your loans, you have to choose a new repayment plan that can extend the life of the loan, increasing the amount you have to pay.

Instead of refinancing, pay off your loan with your current plan. 

Is Refinancing Student Loans Worth It? It Depends.

You should consider refinancing if:

• You qualify for a lower interest rate or monthly payment.
• You do not qualify for federal loan forgiveness.
• It will save you money in the long run.

You should not consider refinancing if:

• You are almost done with paying off your loans.
• You do not qualify for more competitive terms than the ones you already have.
• You are eligible for federal student loan forgiveness.

Closing Thoughts From the Nest

Consider the pros and cons of student loan refinancing to determine whether the decision is worth it for you in the long run.

If refinancing your student loans is beneficial to you, consider using Sparrow as a tool to see your loan refinancing options. You can compare personalized offers across 15+ different lenders, all for free.

If you’ve already refinanced your student debt once, you know just how much it can save you. For example, borrowers that use Sparrow to refinance save, on average, $17,000 over the life of their loan.

With that in mind, you may be curious if you can refinance more than once. And if so, how many times can you do it? Here’s what you need to know.

Can You Refinance Student Loans Twice?

You can refinance your student loan debt as many times as you’d like. While common to do it once, you may be able to save even more by refinancing again.

For example, let’s say you started with a $30,000 student loan balance at a 6.8% interest rate with a 10-year repayment term. You refinance when you’re fresh out of college to a loan with the same balance and repayment term, but a 4.25% interest rate instead. Your new loan will save you $38 per month, or around $4,551 over the life of the loan.

Now, let’s say you opted to refinance again one year into paying off that loan. Your balance is now $26,029.05, and there are 9 years left in your repayment term. You refinance to a new loan with a 3.5% interest rate and a 5-year repayment term. While your monthly payment would increase, you would save another $2,958 over the life of your loan.

By the time you refinance a second time, you will have already paid $3,684 toward your loan ($307 monthly payment x 12 months). However, including that amount, you will only pay $32,095 total after refinancing twice. Compared with your initial loan terms, you will save $9,334 over the life of the loan.

When to Consider Refinancing Multiple Times

While refinancing more than once can make for considerable savings, it’s important to consider a variety of factors before doing so. Here are a few instances in which it does make sense to refinance multiple times:

1. If the savings will be significant. Refinancing is intended to make repaying your debt more manageable or less expensive. If you can save a decent chunk of cash by refinancing again, it likely makes sense to do so. However, consider whether the savings is worth going through the refinancing process again.
2. If your credit score has increased. If your credit score has improved since the last time you refinanced, you will likely qualify for better terms or a more attractive interest rate. If it has not, however, it may be challenging to qualify for a better offer than what you currently have.
3. If the origination fees are either low or nonexistent. While the majority of student loan lenders don’t have origination fees, some do. If the origination fee is so high that it equals, or outweighs, what you will save by refinancing, it may not make sense to do so. However, if the origination fees are low, or if there is no origination fee at all, refinancing again will likely save you money.
4. If you want to release a cosigner. If your current loan has a cosigner, and does not allow for cosigner release, you may want to refinance again to release them from their cosigner obligations.

Is It a Bad Idea to Refinance Multiple Times?

Refinancing your student loans multiple times isn’t a bad idea if you are in fact receiving a better interest rate or terms.

Submitting a formal loan application will result in a hard credit check, however, which will temporarily hurt your credit score. If your credit score isn’t in a good place, refinancing again may not be in your best interest.

How Long Do You Have to Wait to Refinance Again?

Legally, there is no limit to the number of times you can refinance within a certain period of time. So, theoretically, you could refinance a million times if you wanted to.

However, most refinance lenders cap the number of times you can refinance with them. For example, some may limit you to one refinance per month or per quarter.

What to Consider Before Refinancing Your Student Loans

Before refinancing your student loans, consider the following:

1. The type of loan you have. If you have federal student loans, be sure to weigh the pros and cons of refinancing them prior to doing so. If you do, you will lose access to all federal loan benefits such as income-driven repayment plans and federal loan forgiveness. 
2. Your interest rate. While you can score a lower interest rate by refinancing, you may have already hit the lowest possible rate you can get. To see if it’s even possible to qualify for a lower rate, complete the Sparrow application. This will allow you to compare prequalified rates side-by-side, giving you insight into what you may qualify for.
3. Think about your current financial situation. Refinancing to a shorter repayment term will likely cause your monthly payment to increase. Make sure you’re able to afford that payment prior to refinancing again.
4. The credit impact. Submitting a formal loan application will result in a hard credit inquiry, which will temporarily hurt your credit score. While your credit score will recover from the hit over time, it’s important to make sure refinancing makes sense before clicking “submit” on a formal loan application. Minimize the number of applications you submit, or do so within the recommended FICO and VantageScore timeframes so the inquiries are recognized as rate-shopping.
5. The overall economy. Interest rates are impacted by macroeconomic factors, such as the market. If the market is in good shape, you may qualify for a better interest rate. If the market is not, however, it may be better to postpone refinancing until it is.
6. If your loan is within a grace period or forbearance. Refinancing while your student loan is within a grace period or a forbearance, such as the federal forbearance, will cause loan payments to begin. If your loan is within either of these periods, it’s best to hold off on refinancing.

FAQ About Student Loan Refinancing

How soon is too soon to refinance a student loan?

You can refinance your student debt as early as you’d like. There is no specific timeframe in which refinancing is considered “too early.”

How often is too often to refinance student loans?

You can refinance your student loans as often as you’d like. However, you may reach a point in which you can no longer qualify for a better interest rate or terms, simply because you’ve already landed the most advantageous option available.

Does refinancing your student loans hurt your credit?

Refinancing your student loans will cause a hard credit inquiry which will temporarily impact your credit score.

Final Thoughts from the Nest

Refinancing your student loans more than once can save you some serious cash over time. Before deciding if it’s right for you, see what you prequalify for with Sparrow. Then, compare your current loan with your new loan offers to see how much you can save.

Choosing to refinance your student loan can be a difficult decision. You must consider your loan type, interest rate, and income. The decision is not easy, so here’s what you need to know before moving forward with it:

What is Student Loan Refinancing?

When you refinance your student loans, you’re allowing the lender pay off your current loans. You’ll then get a new private loan to pay your new lender back. This new loan often comes with better terms than your first loan (such as a lower interest rate or monthly payment).

Reasons to Refinance Your Student Loans

• Lower monthly payments: Refinancing lets you alter your payment plan. Accordingly, you can choose to extend the repayment term and lower monthly payment.

• Pay off loans faster: If you’re in a better financial position and now want to pay off your loans faster, refinancing can let you shorten the payment period. Although this may result in higher monthly payments, it can save you a significant amount in the long run

• Lower interest rates: If you believe you now qualify for a lower interest rate than before, refinancing can help you save thousands of dollars over the loan’s lifetime. Factors such as improved credit score, more stable income, or better macroeconomic conditions can help you secure better rates for your new loan.

• Simplified payments: Refinancing lets you group all payments into one (instead of owing multiple monthly payments to various different lenders).

Reasons NOT to Refinance Your Student Loans

Refinancing may not be the best choice in certain situations:

• Loss of Federal Loan Benefits: Federal student loans provide benefits and protections not available with private loans. These include student loan forgiveness, income-driven repayment plans, and the suspension of payments and interest accrual. Refinancing results in the loss of these benefits. If you plan to utilize these benefits, it’s best to hold off on refinancing.

• Bad Loan Timing: If you are near the end of repaying an existing loan, refinancing may be a bad decision. Doing so would subject you to new terms and longer repayment periods.

How to Find the Best Student Loan Refinance Option

Finding the right refinancing option should be a simple. Use Sparrow to find the best student loan refinance option for you. Sparrow shows you the most important information and simplifies the entire process.

Refinancing your student loan can be an excellent way to save money and improve your finances. By refinancing, you can take advantage of your improved credit score, higher income, and other positive financial changes to secure a better interest rate or more favorable terms.

However, it’s important to note that refinancing your student loans can also have a temporary negative impact on your credit score. We’ll explore why this happens, whether the benefits of refinancing outweigh the costs, and what you can do to minimize the impact on your credit score.

How Student Loan Refinancing Works

Student loan refinancing is the process of swapping your current student loan(s) for one with a lower interest rate or better terms, like a shorter repayment term or better monthly payments. Refinancing can occur with both federal and private student loans whereas the federal loan consolidation program only considers federal loans. 

Does Refinancing Hurt Your Credit?

When you apply for a student loan refinance, you will have to go through a process which involves a hard credit inquiry. Generally, credit inquiries occur when there is a legally permitted request to see your credit report from either a company or person. This check could adversely affect your overall credit score, as the more checks that happen, the higher probability a credit bureau would think that you may be “over-extending.” 

The key difference with credit inquiries are the version of check they are. A credit inquiry can either be a hard or soft credit check. Soft inquiries don’t impact your credit score, are done by creditors to provide “pre-approved” offers, and can be done without your consent. Contrary to that, hard inquiries do impact your score, are done by creditors and lenders when you apply for a credit or loan, and require written consent.

Although the impact varies drastically for everyone, rarely is it significant.

To further understand how refinancing your student loans will impact your credit, it’s important to understand how your credit score is determined in the first place. Here are the factors that contribute to your credit rating:

• Payment history
• Amounts owed
• Credit history length
• Credit mix
• New credit

Let’s examine the 3 most influential factors in regards to a FICO credit score.

Payment History

According to FICO, your credit score consists of 35% payment history, ranking this as the most important factor in the score. This means that even while refinancing, you should ensure that your income can support any payments that need to be made so you don’t end up with an inconsistent payment history which would affect your credit score. 

If, for any reason, there is an outstanding unpaid balance for more than 30 days, it will get dinged in your credit report and will stay on the report for several years. Fundamentally however, paying your loans or credit cards on time is a strict practice that should be adhered to whenever possible. This will improve your credit score and will allow you to better manage your financial situation.

Amount Owed

This element refers to the total amount of money owed and is the second largest component of a credit score, exactly 30%. One thing many borrowers get confused about is that when refinancing, your total amount of money owed does not change.

Credit History

Your credit history is about 15% of your FICO score, and it speaks to how long you have been using credit as well as the average age of all your credit accounts. This is why it is important to start using credit early, to build a solid foundation. Also, some key things to remember are that whenever you open a new line of credit, that counts as a “0” age, which reduces your overall average age for existing credit. 

How to Minimize the Credit Impact of Refinancing

Despite the fact that student loan refinancing will impact your credit score, there are ways to minimize the impact.

First, pay close attention to the application quantity and timing. When you are looking around for loan options, many lenders will allow you to see what you qualify for without incurring a hard credit check, which would impact your credit rating. This means that you should only send off formal applications to lenders where you believe there is a great chance that you will end up using their product. At the end of the day, the more formal applications you submit, the more hard credit checks occur, and the more your credit can degrade

Additionally, you should be aware of the different timing rules with FICO and Vantage credit scores. While applying to loans, if done in a certain time period, multiple applications may not harm your score. For FICO, this period is 30 days, and for Vantage, it is 2 weeks. 

The next two tips are quite straightforward. Continue making payments on your existing student loans before the refinance, and make payments for your refinance loan on time. Many students often forget to pay their student loan payments on time as they are in the process of having it refinanced. Even during this process, it is vital you stick with your schedule and pay off the loan, otherwise you will have an impact on your credit history. The same applies for the refinanced loan. Be sure you know the exact terms of the loan and adhere to the schedule for the payments, ensuring never to miss a payment. 

Using Sparrow

Finally, you could use Sparrow! When using Sparrow to compare student loan refinancing offers, your credit score won’t be impacted. Sparrow aggregates all the available options in one centralized location where you will be able to see the details of each loan. Then, you can decide which one to submit a formal application with. This reduces the number of applications necessary and thus protects your credit score!

Is Refinancing a Student Loan Worth It?

Knowing when to refinance is tricky. Additionally, many borrowers can’t, or shouldn’t, refinance their student loans. Passing the credit check and showing stable income are generally known criteria that are used to determine eligibility. Without them, you may need a cosigner to qualify. If you are already halfway through repaying your loans, refinancing may only prolong the duration of the term, albeit with lower monthly payments.

A checklist that you could use to figure out if refinancing is worth it can be found here. Essentially, you should refinance your student loans if you are in a better financial position now than when you originally got the student loans or if you have a private student loan. Also, if the current economic conditions are favorable — this happens when the Federal Reserve cuts interest rates — then it may be beneficial to refinance to obtain a student loan with a lower interest rate.

Final Thoughts from the Nest

After understanding the complexities of student loan refinancing and if it is worth the potential impact on your credit rating, it’s important to know that everyone will be in a different situation. Contextualize and understand if your personal landscape will benefit from a refinance. And lastly, be sure to know the best rates that are out there and compare from several lenders. Using tools like Sparrow will speed up this process and make it much easier to navigate.

As a parent, it’s your job to make sure your kids are okay. That’s why back when they needed help with money for college, you gladly took out loans. But, the loans are getting harder to manage so you’re thinking about refinancing. You wonder: How can I refinance my parent PLUS loans? Can I refinance my child’s student loans? 

Here’s everything you need to know about refinancing your child’s student loans.   

Refresher on Refinancing

When you refinance a loan, you’re allowing a lender to pay off your current loan. They’ll then give you a new loan, oftentimes with better loan terms, to pay them back. Better terms like lower interest rates can save you a lot of money in the long run. Take a look at the table below to see what we mean. 

Notice how the total interest paid keeps going down. New Loan A has a lower interest rate and saves you around $7,000. New Loan B has a lower interest rate and a shorter repayment term. This not only lowers the interest even more but also helps you pay off the loan faster. As you can see, refinancing can translate into big savings. That’s why it can be a great move for you. 

How to Refinance Parent PLUS Loans 

Decide if Refinancing Is Right for You

Before you begin the process of refinancing, you need to make sure that refinancing is right for you. Consider the types of loans you have. Are they private or federal loans? Think about your financial goals. Will refinancing now help you meet them? Finally, make sure you’re in a position where you’ll get better loan terms. It’s not worth it if you get similar or worse terms than before. 

Compare Parent Loan Refinance Rates

Use Sparrow to help you find the best parent PLUS loan refinance rates. The Sparrow application matches you with what you qualify for from our 17+ partnering lenders. You can then compare refinance rates side-by-side, helping you narrow down your options to see which is best for you. 

Choose Which Lender You Want to Work With

When it comes to choosing a refinance lender, think about what you want in your new loan. Do you want a shorter term? Who offers the best student loan refinance interest rate? Do they offer any benefits? These are just some questions you should ask yourself to figure out which lender you want to work with. 

Complete a Formal Application With the Lender

Once you’re ready, fill out and submit a formal application with the lender. You’ll also have to submit additional documents with your application. These include: 

1. Loan statements 
2. Proof of income/employment 
3. Proof of residency 
4. Proof that your child graduated and from what school 

Can I Refinance Private Parent Loans? 

Yes, you can refinance private parent loans. As long as you can get better loan terms, there are few downsides to refinancing your private loans. To qualify, you’ll need at least a good credit score and a stable income. A typical credit score that qualifies is at least in the high 600s, and the higher that score is, the better. Each lender will also have additional requirements that you must meet, so be sure to check on that. 

Can I Refinance Parent PLUS Loans? 

Yes, you can refinance your Parent PLUS Loans. It’s not much different from refinancing private student loans, so all of the information above still applies. However, when you refinance a federal student loan, you’ll lose out on federal benefits. This includes benefits like income-driven repayment plans and possible loan forgiveness. For this reason, you’ll want to weigh the pros and cons to decide whether refinancing is worth it to you. 

Can I Refinance a Student Loan as the Cosigner? 

While refinancing may take you off as a cosigner, you cannot refinance the loan. As a cosigner, you’re there more to vouch for the primary borrower. Even though you also take on responsibility for the loan, only the primary borrower is fully in charge of it. So, only they can start the refinancing process. 

If you’re not looking to be a cosigner anymore, some lenders offer cosigner release options. Lenders will release cosigners after borrowers have made a number of on-time payments. Have your child check with their lender to see if they offer this.

Benefits of Refinancing Parent Loans 

Regardless of your loan situation, refinancing your parent loans has great benefits. For one, you can save a lot of money on your loans. The earlier table showed how that was true. Yet, that isn’t the only benefit.

If you have multiple private student loans, you have the option to consolidate them when you refinance. That way, instead of making many monthly payments, you’ll only make one. Refinancing can also transfer the loan to your child. This will help them build a credit history and release you from the debt. 

Final Thoughts from the Nest

Refinancing can be a challenging process, but it pays off in the end. It can be good for both you and your child. When you’re ready to start the process, use Sparrow to help you. All you have to do is fill out the application, which won’t take long. Fill out the application now, and let us support you so you can focus on the other goals you have.

In a very simple sense, student loan refinancing allows you to swap your current student loan for one with a better interest rate or terms. By doing so, you can save thousands of dollars over the life of your loan. In fact, borrowers who used Sparrow to refinance reduced their interest rate by 2.29 percentage points, saving them around $17,000 over the life of their new loan, on average. 

While the prospect of saving $17,000 may have you ready to jump straight into refinancing, there are several things to consider beforehand. Let’s break down the process of refinancing your student loans, including everything you should consider before signing the dotted line.

How to Refinance Student Loans in 7 Steps

To make the process of refinancing your student loans simple, follow these 7 steps.

#1: Decide if Refinancing Makes Sense for You

Before you refinance your student loan debt, it’s important to consider whether refinancing is a good idea in the first place. You should consider refinancing under the following circumstances:

Your financial situation is sound. Most lenders will require you to have a strong credit score, typically of at least 650, to refinance. Lenders will also expect you to have a stable income as it confirms to them your ability to make loan payments. If your credit score is low, or if your income is unstable, you should consider refinancing when both are in check.

You know you can qualify for a lower interest rate or better terms. If your interest rate is high, and you are confident you can qualify for a lower interest rate, it makes sense to refinance. Likewise, if you are unsatisfied with your current loan terms, and are confident you could qualify for better ones, refinancing your student loans makes sense.

You have a federal student loan but don’t plan on using any of the federal protections. Federal student loans have certain advantages that private student loans do not, such as student loan forgiveness and income-driven repayment plans. If you don’t plan on using either, however, refinancing to a private student loan may make sense for you.

On the flip side, you should not consider refinancing if any of the following circumstances apply to you:

You plan to use federal student loan protections. As soon as you refinance federal student loans to private student loans, you lose federal student loan benefits such as loan forgiveness opportunities and income-driven repayment plans. If you plan to use either of those benefits, it’s better to hold off on refinancing.

You are pursuing loan forgiveness. If you have federal student loans and are currently pursuing a loan forgiveness program, you should not refinance. By doing so, you will lose the opportunity to have your loans forgiven.

You recently declared bankruptcy. The purpose of refinancing your student loans is to secure a better interest rate or terms. Many private lenders will not allow you to refinance if you have declared bankruptcy within the last 4-10 years. If they do allow you to refinance with them, they will likely give you less favorable terms given your financial situation. If you have filed bankruptcy in the last 10 years, consider seeing if you qualify for a refinance loan, but understand that it is unlikely.

Your financial situation hasn’t improved since you borrowed the loan. To secure more favorable terms, you will almost always need a better credit score or income than when you initially borrowed the loan. If your credit score has dropped or if your income has dwindled since you initially borrowed the loan, however, you may not qualify for a better loan.

With that all said, you should explore your student loan refinance options to see if you qualify for a more favorable loan. There is absolutely no harm in exploring your options on Sparrow, as it doesn’t hurt your credit score, and you never know what refinance loan you may qualify for.

#2: Fill Out the Sparrow Application

After you’ve decided if refinancing is right for you, complete the Sparrow application. By completing the Sparrow application, you will be able to see what student loan refinance options are available to you at our 15+ partnering student loan lenders.

Completing the application will not hurt your credit score in any way.

To complete the application, you will need the following information:

• Personal information
  • First and last name
  • Email address
  • Phone number
  • Date of birth
  • Citizenship status
  • Social security number
• Address
  • Permanent address
  • Mailing address
• Loan information
  • Amount needed
  • When you need funds disbursed
• Financial information
  • Income
  • Housing expenses
• School information
  • Where you currently are/previously studied
    • Enrollment status
    • Graduation date
    • GPA

#3: Compare Loan Offers

After filling out the application, offers will appear on the screen, showing you what refinance loans you qualify for at our 15+ partnering student loan lenders. The rates and terms shown are prequalification offers, meaning they are estimates of what you will qualify for at each given lender. If you have multiple offers, compare them to ensure you’re selecting the best refinance loan for you. 

Generally speaking, the loan with the lowest interest rate will save you the most money over the life of the loan. However, you should consider other factors such as:

• Whether the interest rate is fixed or variable
• The repayment terms
• The repayment plans available to you
• Member benefits
• Cosigner release policies (if applicable)
• The total cost of the loan

Fixed vs variable interest rate. Fixed interest rates will remain the same throughout the life of the loan. Variable interest rates will change as the market fluctuates. If you prefer one over the other, make sure the refinance loan you choose provides that.

Repayment terms. Repayment terms include all the conditions involved in borrowing money from that lender. Make sure you are reading the fine print before agreeing to borrow a loan — there may be fees noted in the repayment terms that you don’t want to miss.

Repayment plans. Each individual lender will offer a different set of repayment options. Most, however, will have a standard repayment plan, which gives you fixed payments for the duration of your repayment period. If you are looking for a specific repayment option, double check that the lender you select has it.

Member benefits. Some lenders have additional benefits for borrowers such as free career assistance, autopay discounts, or the ability to skip one payment per year. While you shouldn’t put member benefits ahead of other factors such as the interest rate, they’re a nice bonus to consider if deciding between two near-identical loan offers.

Cosigner release policies. If you plan to include a cosigner on your refinance loan, you should consider the lender’s cosigner release policies. While some lenders do not offer a cosigner release option, meaning the cosigner must remain on the loan until it is paid off, other lenders do offer the option for the cosigner to be released from their responsibility, typically after the primary borrower makes a certain number of payments on the loan. Make sure to read the lender’s cosigner release policy if your cosigner prefers to be removed from the loan down the line.

Total cost of the loan. The purpose of refinancing, in a very simple sense, is to pay less on your student loan over time. Consider the total cost of the refinance loan in comparison to the loan you currently have. Does it save you money in the long run? If so, refinancing makes sense. If it costs you more in the long run, however, reconsider the decision to refinance.

Use these factors to compare loan offers and choose the one that is best for you.

#4: Complete the Formal Application

Once you’ve decided which refinance loan offer is best for you, it’s time to complete the lender’s formal loan application. Remember, the loan offers you see on Sparrow are prequalification offers, or estimates of the loan terms you will receive after submitting the lender’s formal application. To officially apply and borrow with a lender, you must complete their formal application.

To do so, find the loan offer you’d like to move forward with and click “Explore,” then “Get approved with [lender].” The application will then reroute you to the lender’s website to complete their formal application. To complete the lender’s formal application, you will need the same information you used to complete the Sparrow application. 

After the lender processes your request, you may need to provide additional information such as proof of your income or official identification. While you wait to hear back from the lender, gather the necessary documents you may need to prove your income or identity such as:

• Recent pay stubs
• Proof of employment
• W-2s
• Bank statements
• Valid driver’s license
• Passport
• Social security number 

#5: Accept the Loan

Once you’ve received a formal refinance loan offer from the lender, review the offer to be sure it still suits you. Because loan terms can fluctuate with the market, they may not be identical to what you prequalified for through the Sparrow application, although they should be fairly similar.

Once you’ve double checked the loan terms, go through the lender’s process to accept the loan.

#6: Verify That the Loan Was Paid Off

After accepting the loan, the lender will use the amount of your new loan to pay off your initial loan. The length of this process will vary depending on the lender(s) involved.

Ask your new lender directly how long they estimate the process will take. After that timeline passes, check in with the lender to verify that your initial loan was completely paid off.

#7: Begin Making Payments on Your New Loan

Once your initial loan is paid off, you will begin making payments on your new loan. Be sure to check in with the lender to find out when your monthly payments will be due. If you have concerns about making the payments on time, consider opting in to automatic payments.

Commonly Asked Questions About Student Loan Refinancing

While the process of refinancing with Sparrow is fairly simple, it’s common to still have questions about whether refinancing is right for you. Below are some of the most commonly asked questions about student loan refinancing.

Is It Worth It to Refinance Student Loans?

Refinancing your student loan(s) is worth it if you will be able to secure more favorable terms, and thus, save money over the life of the loan. Whether it is worth it is ultimately subjective and highly dependent on the amount you are able to save by refinancing.

Can I Refinance My Student Loans at Any Time?

Generally speaking, you can refinance your student loans at any time. While some student loan lenders may require you to have graduated, others will allow you to refinance while still in school.

Can I Refinance My Student Loans More Than Once?

Yes. You can refinance your student loans as many times as you’d like.

Does Refinancing Hurt Your Credit?

Submitting a formal loan application with a lender will result in a hard credit inquiry, which will temporarily hurt your credit. However, according to FICO, a hard inquiry typically only decreases your credit score by less than 5 points.

Can Student Loans Be Forgiven if Refinanced?

If you refinance federal student loans, they will no longer be eligible for federal student loan forgiveness programs. 

What Credit Score Do You Need to Refinance Student Loans?

The credit score requirements for refinancing will vary depending on the lender. In general, most lenders will require you to have a credit score of at least 650 to qualify. The higher your credit score, however, the more likely you are to receive a better interest rate and terms.

What is the Best Student Loan Refinancing Company?

There is no single best student loan refinancing company. The best lender will always be the one that offers you the best interest rate and terms, which will vary from person to person. To find the best student loan refinancing company for you, complete the Sparrow application.

Final Thoughts from the Nest

The idea of swapping around your student loans may feel overwhelming. However, following these 7 steps can help guide you through the process. To what rates you qualify for with our 15+ partnering student loan lenders, complete the Sparrow application.

The purpose of student loan refinancing is to score a better interest rate or terms. And landing a better interest rate could quite literally save you thousands. So, before choosing just any refinance loan, make sure you’re getting the best rate possible. 

Here are the best rates for student loan refinancing.

September 2024’s Best Rates for Student Loan Refinance

Rather than searching for lenders one-by-one, we recommend starting the process with an automated student loan refinance search tool. With the free Sparrow application, you can see the rates and terms you’d qualify for with 17+ premier lenders. 

Arkansas Student Loan Authority (ASLA)

Fixed Interest Rate: 3.50% to 7.48%
Variable Interest Rate: N/A
Maximum Borrowing Limit: $250,000
Minimum Credit Score: 670

Best for: Residents of, or students in, Arkansas.

Apply with ASLA.

View disclosure.

Brazos

Fixed APR range: 4.90% to 6.99%
Variable APR range: 5.32% to 9.12%
Maximum Borrowing Limit: $400,000
Minimum Credit Score: 720, or 690 with a qualified cosigner

Best for: Residents of, or student in, Texas.

Apply with Brazos.

View disclosure.

College Ave 

Fixed APR range: 6.99% to 11.99%
Variable APR range: 6.99% to 11.99%
Maximum Borrowing Limit: $300,000
Minimum Credit Score: Upper 600s

Best for: Borrowers looking for a repayment term that matches their budget.

Apply with College Ave.

View disclosure.

Earnest

Fixed APR range: 4.96% to 9.79% (including 0.25% auto-pay discount)
Variable APR range: 5.49% to 9.74% (including 0.25% auto-pay discount)
Maximum Borrowing Limit: $500,000
Minimum Credit Score: 650

Best for: Borrowers who want a competitive interest rate and flexible repayment options.

Apply with Earnest.

View disclosure.
*Rates include autopay discount.

EDvestinU

Fixed APR range: 4.41% to 7.78%
Variable APR range: 8.04% to 9.79%
Maximum Borrowing Limit: $200,000
Minimum Credit Score: 700

Best for: Borrowers who do not have a degree.

Apply with EDvestinU.

View disclosure.

INvestED

Fixed APR range: 5.85% to 9.48%
Variable APR range: 8.63% to 12.27%
Maximum Borrowing Limit: $250,000
Minimum Credit Score: 670

Best for: Borrowers who are residents of or students in Indiana.

Apply with INvestED.

View disclosure.

ISL Education Lending

Fixed APR range: 3.94% to 8.48%
Variable APR range: N/A
Maximum Borrowing Limit: $5,000 ($10,000 for California residents)  to $300,000
Minimum Credit Score: 670

Best for: Borrowers who want to work with a non-profit lender.

Apply with ISL Education.

View disclosure.

LendKey

Fixed APR range: 5.24% to 10.68%
Variable APR range: N/A
Maximum Borrowing Limit: $300,000
Minimum Credit Score: 680

Best for: Borrowers that want to work with a credit union or community bank.

Apply with LendKey.

View disclosure.

MPOWER

Fixed APR range: 11.74% (12.69% APR)
Variable APR range:
Maximum Borrowing Limit:  $100,000
Minimum Credit Score: N/A

Best for: Borrowers who want competitive interest rates and a flexible forbearance policy.

Apply with MPOWER.

View disclosure.

Nelnet Bank

Fixed APR range: 7.12% to 11.19%*
Variable APR range: 7.60% to 14.50%*
Maximum Borrowing Limit: $225,000
Minimum Credit Score: 640

Best for: Borrowers who want competitive interest rates and the ability to refinance PLUS loans.

Apply with Nelnet Bank.

View disclosure.
*Student loan refinance rates listed have an autopay discount only on the lower boundary.

SoFi

Fixed APR range: 4.49% to 8.99%
Variable APR range: 4.49% to 8.99%
Maximum Borrowing Limit: Up to your total outstanding balance
Minimum Credit Score: Does not disclose

Best for: Borrowers with a strong credit score or a creditworthy cosigner.

Apply with SoFi.

View disclosure.

When Should You Refinance Student Loans?

Before you refinance your student loan(s), you should consider a few factors.

Loan Type

If you have federal student loans, refinancing will eliminate a variety of benefits unique to federal student loans. If you plan on utilizing any of those benefits, such as income-driven repayment and potential forgiveness, hold off on refinancing.

>> MORE: When should I refinance my student loans?

Income and Credit

The purpose of refinancing is to score a lower interest rate or better terms than the loan(s) you currently have. You will need to have a steady income and a good credit score to receive competitive loan offers. If your income and/or credit score isn’t in a better place than when you originally borrowed the loan, it’s best to wait until it is to refinance.

>> MORE: What credit score do I need to refinance my student loan?

Payment History

Lenders may examine your repayment history before agreeing to lend to you. If your repayment history is full of late payments, it may be challenging to qualify for a competitive refinance loan. On the other hand, if your repayment history shows consistent on-time payments, you may qualify for a solid refinance loan.

>> MORE: Check which student loan refinance options you qualify for

How to Get the Lowest Student Loan Refinance Rate

The key to finding the lowest student loan refinance rate is comparing your options side-by-side. Without the transparency to see all of your loan options in one place, it can be challenging to decipher which is the best option.

To see which student loan refinance options you qualify for, and at what rates, submit the Sparrow application. The Sparrow process will allow you to explore the best student loan refinance rates in one place.

>> MORE: Compare personalized student loan refinance rates

Does Refinancing your Student Loan Hurt Your Credit?

When you inquire about a potential refinance loan, you may go through a prequalification process which will allow the lender to give you an estimate of the interest rate and terms you would qualify for. The prequalification process does not hurt your credit.

If you decide to move forward with a loan option, you will need to submit a formal application which will hurt your credit score. A formal refinance loan application results in a hard credit check inquiry, although this will only hurt your credit score temporarily.

>> MORE: Check your refinance student loan rates without hurting your credit score

Is Now the Time to Refinance Student Loans?

If you have federal student loans, now might not be the best time to refinance your student debt. Federal student loans are currently scheduled to remain in forbearance until June 30th, 2023 or 60 days after student loan forgiveness litigation is resolved or debt is forgiven. During this time, federal student loans will not be accruing interest, and making minimum monthly payments is not required. Refinancing your federal student loans during this time would make interest start to accrue, and minimum monthly payments would be required.

If you have private student loans, however, there are no time limits on refinancing.

>> MORE: Compare your options: student loan refinance rates

Final Thoughts from the Nest

Before refinancing your student loans, consider whether now is the appropriate time to refinance. If so, start the process with Sparrow to be sure you receive the best rates for student loan refinancing.

Sparrow aims to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

While the average 4-year dental program could run you around $400,000 with all expenses included, the career trajectory is promising. Average dentist salaries outrank various other industries, putting newly graduated dentists in a fairly sound financial position.

Despite competitive salaries, the average dental student graduates with around $300,000 in student debt. While daunting, the significant earning potential makes you a great candidate for student loan refinancing.

Student loan refinancing can save you thousands, sometimes even tens of thousands, of dollars over the life of your loan, while also helping you pay off your student debt faster.

Let’s learn more about the average dentist salary, both by state and speciality, and how you save thousands by refinancing your dental school loans.

Jump ahead > Average Dentist Salaries by State • Average Dentist Salaries by Specialty • Is Being a Dentist Worth It? • Why Dentists Should Consider Refinancing • Best Student Loan Refinancing Options for Dentists

Average Dentist Salaries By State in 2022

According to ZipRecruiter, the average dentist salary is $172,328 in the United States. However, similar to many other industries, the average salary varies significantly by state. 

Average Dentist Salaries By Specialty in 2022

Similarly to state discrepancies, dentist salaries vary significantly by specialty. For example, while public health dentists make an average $102,320 per year, periodontists make a whopping $374,400 per year.

Keep in mind that these numbers are simply averages — there are dental professionals who make significantly more and significantly less.

Data from the U.S. Bureau of Labor Statistics and Comparably.

Is Being a Dentist Worth It?

Whether a career in dentistry is worth it is ultimately up to you. However, being a dentist is both a high-paying and growing career — two factors many job seekers heavily consider.

In fact, the U.S. Bureau of Labor Statistics says that employment of dentists is expected to rise 8% between 2020 and 2030. This is on par with the average for all occupations.

Here’s a few other statistics to consider:

1. Only 29% of dentists plan to look for a new job this year.*
2. Only 18% of dentists work more than 40 hours per week.*
3. Nearly 22% of dentists work less than 21 hours per week.*

*Data from DentalPost.

Why Dentists Should Consider Student Loan Refinancing

The average dental student takes on nearly $300,000 in dental school debt. Combine that with the average private student loan interest rate of around 7% and a 15-year repayment term, and you’re looking at monthly payments of around $2,696. By the end of the repayment term, you will have paid roughly $485,367 — nearly $200,000 more than what you initially borrowed.

With such a large balance, the amount owed will grow fairly quickly, making your interest rate that much more important. This is precisely why dentists should consider student loan refinancing. Refinancing can help lower that interest rate, saving you thousands over the life of your loan.

Borrowers who use Sparrow to refinance reduce their interest rate by 2.29 percentage points, on average. In this same scenario, a 2.29 percent interest rate reduction would save you $369 on your monthly payments and $66,451 over the life of the loan.

Note that this interest rate reduction is only the average. As a dentist, your salary makes you a more competitive candidate for refinancing as lenders will view you as financially able to pay off your debt. Thus, you may score an even greater interest rate reduction when you refinance your dental school debt with Sparrow.

What Dentists Should Look for in a Refinance Loan

When looking for a lender to refinance your dental school debt with, you should consider the following factors:

1. Interest rate
2. Borrowing limit
3. Loan terms

Interest Rate

The purpose of refinancing is to save money, which is primarily done through a lower interest rate. Before agreeing to a refinance loan, be sure to compare loan options to see what interest rates you qualify for.

To compare refinance loans with 15+ lenders in one application, complete the Sparrow application.

Borrowing Limit

Due to the amount of student loan debt you may hold as a dentist, you’ll need to find a lender with a higher borrowing limit. For example, some lenders may allow you to refinance up to $500,000 while others may only allow up to $100,000. 

If you plan to refinance the entirety of what you owe, make sure the lender you decide to work with will allow you to refinance your whole outstanding balance.

Loan Terms

Oftentimes, refinancing will allow you to extend your loan term. Extending your loan term will often lead you to pay more over the life of your loan, however, it can lower your monthly payments. 

If your goal with refinancing is to lower your monthly payment, look for a lender that allows for a longer repayment term than what you currently have.

Best Student Loan Refinancing Options for Dentists

The best refinance loan will ultimately be the one that provides you with the best interest rate and terms. However, the following are our top picks for refinance loans for dentists, in order of borrowing limit from highest to lowest.

SoFi

SoFi is one of the largest student loan refinance companies in the industry. With competitive interest rates, a diverse set of repayment options, and exclusive member benefits, SoFi is a good fit if you have an associate’s degree or higher, a high income, and a strong credit score.

Borrowing Limit: Up to your total outstanding balance

Minimum Credit Score: Does not disclose

Earnest

Earnest offers both private student loans and student loan refinancing. With competitive interest rates, customizable repayment plans, and forward-looking eligibility criteria, Earnest is a good fit if you don’t have a cosigner but have a strong credit score. 

Borrowing Limit: $500,000

Minimum Credit Score: 650

Brazos

Brazos is a non-profit lender that offers private student loans and student loan refinancing for Texas residents. While Brazos student loan refinancing is only available to Texas residents, the non-profit lender offers competitive rates and flexible terms to those who qualify. It’s best if you are a Texas resident with at least a bachelor’s degree and have an established income and strong credit.

Note: You are not required to have graduated from a Texas school in order to qualify.

Borrowing Limit: $400,000

Minimum Credit Score: 720, or 690 with a qualified cosigner

College Ave

College Ave offers both private student loans and student loan refinancing with competitive rates, flexible repayment terms, and strong customer service. College Ave’s student loan refinance offering is best if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget. 

Borrowing Limit: $300,000

Minimum Credit Score: Upper 600s

ISL Education Lending

ISL Education Lending is a nonprofit student lender offering both private student loans and student loan refinancing. ISL Education Lending refinance loans are best if you want to work with a nonprofit lender, want competitive interest rates, or want to refinance if you did not finish your dental degree. 

Borrowing Limit: $300,000

Minimum Credit Score: 670

LendKey

LendKey offers both private student loans and student loan refinancing. By connecting you with a network of 100+ lesser-known credit unions and community banks, LendKey allows you to work with smaller lenders with low rates and good customer service, rather than traditional lending institutions. LendKey’s student loan refinance offering is best if you want to work with a credit union or community bank to access loan offers you otherwise might have overlooked. 

Borrowing Limit: $300,000

Minimum Credit Score: 680

Arkansas Student Loan Authority (ASLA)

The Arkansas Student Loan Authority (ASLA) is an Arkansas state entity that provides both private student loans and student loan refinancing for Arkansas students and graduates.

While ASLA’s student loan refinancing is only available to Arkansas residents or students who attended a school in Arkansas, they do offer competitive interest rates and flexible terms to those who qualify. ASLA is best if you are an Arkansas resident or attended a school in Arkansas and want flexible repayment options.

Borrowing Limit: $250,000

Minimum Credit Score: 670

INvestED

INvestED offers private student loans, parent loans, and student loan refinancing for residents of Indiana and students who attended a school in Indiana. INvestED’s student loan refinance offering is best if you are a resident of Indiana or student who attended school in Indiana seeking competitive interest rates, a variety of repayment options, and a flexible repayment option.

Borrowing Limit: $250,000

Minimum Credit Score: 670

Nelnet Bank

Nelnet Bank offers both private student loans and student loan refinancing. Nelnet Bank’s student loan refinance offering is best if you are seeking competitive rates, a flexible forbearance policy, and the ability to refinance both private and/or federal student loans, including parent PLUS Loans. 

Borrowing Limit: $225,000

Minimum Credit Score: 640

Final Thoughts from the Nest

As a dentist, it’s fairly common to wind up with $300,000 in student loan debt. While it may feel overwhelming, the average dentist salary is high, which can help you pay off your student debt more easily.

Finding a state and specialty that provides you with a solid salary is a good start. If you find that your loan debt is still overwhelming, consider student loan refinancing with Sparrow. With Sparrow, you can see what rates you qualify for with 15+ premier lenders ready to help you.

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.