Earn $20 when you view your rate on a personal loan *
Bonus deposited into a SoFi Money® account. See terms.

Does it Cost Money to Refinance Student Loans?

March 30, 2020 · 4 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Does it Cost Money to Refinance Student Loans?

In the right circumstances, refinancing your student loans can help you save both time and money as you work to pay down your student debt. As you compare refinance lenders, however, it’s important to keep an eye on the fees they charge.

Student Loan Refinancing Recap

Student loan refinancing is the process of paying off one or more existing student loans with one new one through a private lender. You can typically refinance both federal and private student loans, and depending on the terms of your current loans and your creditworthiness, you may be able to get a lower interest rate or lower monthly payment.

This process is different from federal student loan consolidation, which involves combining several eligible federal loans into one new loan with a federal loan servicer. While that process can simplify your repayment plan and help you maintain federal loan protections, it typically doesn’t help you save money.

Every situation is different, but with the right refinance loan, you could save hundreds or even thousands of dollars as you pay down your student debt.

That said, there are both benefits and drawbacks to consider before you pull the trigger.

Pros of Student Loan Refinancing

Can Save You Money

If you qualify for a lower interest rate than what you’re currently paying, refinancing your student loans could save you money on interest over the life of the loan.

If you don’t qualify for a lower rate on your own, you may be able to add a co-signer with solid creditworthiness to help improve your chances.

Can Give You More Flexibility

Student loan refinance lenders typically offer a range of repayment terms, allowing you to shorten or lengthen the amount of time you have to pay off your debt.

Simplifies Your Repayment Plan

If you have multiple student loans across more than one servicer or lender, refinancing them all into one new loan can make repayment a little easier.

Cons of Student Loan Refinancing

You’ll Lose Federal Benefits and Protections

If you have federal student loans, refinancing with a private lender will cause you to lose certain benefits and protections, such as access to income-driven repayment plans, federal loan forgiveness programs, and more.

It May Not Save You Money

If your current interest rates are already low, it may be tough to qualify for something even lower. Also, applying for a longer repayment period than what you already have could end up costing you more in interest over the life of the loan.

You May Get Less Help When You’re Struggling

Deferment and forbearance options can vary by lender. With SoFi, for instance, you may qualify for a deferment if you return to graduate school on a half-time or full-time basis, undergo disability rehabilitation, or serve on active duty in the military.

There’s also an unemployment protection program that provides forbearance in three-month increments and up to 12 months total for those members who qualify. Other lenders, however, may not offer these same benefits.

Common Fees When Refinancing Your Student Loans

Depending on the lender you choose, you may run into some fees when refinancing your loans, as well as fees going forward. Here are some to watch out for:

•   Application fee: This fee covers the cost of processing the application and is typically due when you submit your application.
•   Origination fee: Some lenders charge this fee to help cover the costs of processing your loan and disbursing the funds.
•   Late fee: Many lenders charge this fee if you miss a payment. Depending on the lender, you may get a grace period between your due date and when the fee is assessed.
•   Returned payment fee: If you try to make a payment but don’t have enough money in your checking account to cover it and no overdraft protection, some lenders may charge you a fee for the failed transaction.

In most cases, you won’t have to pay anything up front to refinance your student loans. With SoFi, for instance, there are no application fees, and no origination fees.

So as you’re shopping around, make sure you read the fine print to understand the cost of refinancing student loans with that particular lender.

Serious savings. Save thousands of dollars
thanks to flexible terms and low fixed or variable rates.

Reducing the Cost of Refinancing Student Loans

Because many student loan refinance lenders don’t charge upfront fees, shopping around with those costs in mind can help you improve your chances of finding a low- or no-costs lender.

Keep in mind, though, that some lenders may charge what are called “hidden fees.”

Instead of showing up in marketing material, these fees are often buried deep in the terms and conditions of the loan and can be tough to find if you’re not looking for them.

Taking the time to thoroughly read the terms and conditions before refinancing could help you avoid unexpected fees down the line.

If you get approved for the new loan, you might consider setting up automatic payments to help avoid missing a payment and getting charged a late fee. Some lenders, including SoFi, offer an interest rate discount to qualified borrowers using autopay.

Then, you might make it a goal to always have a buffer in your checking account or overdraft protection to ensure a payment doesn’t get returned.

Considering SoFi to Avoid Upfront and Hidden Costs

If you’re considering refinancing your student loans, shopping around can take time. When refinancing with SoFi, you don’t have to worry about paying upfront or hidden fees.

What’s more, you can find your rate with SoFi with just a soft credit check.

Simply register and share a little information about yourself, and you can view what rates you might qualify for.

Use a student loan refinancing calculator to get an idea of how much you could save before you apply.

Ready to refinance your student loans? Check your rate with SoFi.

*Guaranteed Rate Match Offer: Your pre-qualified rate, and the rate match program itself, are conditional upon our verification of your application information, including verification of sufficient income to support an ability to repay. Eligible documentation of a competitor’s rate offer, issued within 30 days of your SoFi pre-qualified rate, will be determined at SoFi’s sole discretion and must be for the same loan amount and term. SoFi will only match rate offers for private student loan refinance products. The match will be on the rate, exclusive of all discounts. The $100 Rate Match Bonus is not available to residents of Ohio. To receive the $100 Rate Match Bonus, you must: (1) register and/or apply for a student loan refinance (2) provide documentation of an eligible competitive rate offer; (3) call at (855) 456-SOFI (7634) or chat on SoFi.com and follow the instructions to send in your proof of lower rate; (4) have and provide a valid US bank account to receive bonus; (5) complete Form W-9; (6) and meet SoFi’s underwriting criteria and book a student loan refinance with SoFi. Once conditions are met and the loan has been disbursed, you will receive your Rate Match bonus via automated clearing house (ACH) into your checking account within 30 calendar days. Bonuses that are not redeemed within 180 calendar days of the date they were made available to the recipient may be subject to forfeit. Bonus amounts of $600 or greater in a single calendar year may be reported to the Internal Revenue Service (IRS) as miscellaneous income to the recipient on Form 1099-MISC in the year received as required by applicable law. Recipient is responsible for any applicable federal, state or local taxes associated with receiving the bonus offer; consult your tax advisor to determine applicable tax consequences. Additional terms and conditions may apply. SoFi may discontinue this program at any time.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Student Loan Refinance
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender