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Tips for When to Consider Refinancing Your Student Loans

April 09, 2020 · 3 minute read

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Tips for When to Consider Refinancing Your Student Loans

When was the last time you took a close look at your student debt? If you’re like most borrowers, particularly those with six figures of student loan debt from graduate school or MBA programs, you probably shudder at the thought.

Chances are, you set up a student loan repayment plan after graduation and figured you’d revisit it “later”—say, when you’re making more money, when your career is more secure, when you have more time.

This approach is understandable, since after receiving your undergraduate or graduate degree your focus is on other things (like building a career that will help you pay off your loan balance).

But if you let that nebulous “later” date turn into “never,” the repercussions can be costly. At some point, refinancing your student loans could potentially save you a significant amount of money. You just need to figure out if it is the right move for you.

So how do you know when it’s time for a student loan debt check-in? Here are four factors that could prompt a second look:

1. Your current student loans have high interest rates.

The first thing you should look at is the interest rate that you’re paying on your student loans, particularly federal (Direct) Unsubsidized Loans (grad or professional), federal Graduate PLUS Loans and/or private loans.

These loans tend to have higher interest rates than federal subsidized student loans, and you may be able to find a lower interest rate private student loan option.

Depending on how high your loan balance is and how much you can cut that interest rate, your cost savings when refinancing may be significant.

2. Your financial situation has improved since you took out the loans.

Maybe you were a starving student when you first applied for your student loans, but ideally your financial situation has improved with time. This is great news for your bottom line, because a higher credit score and income level (among other factors) are typically key to helping you qualify for a lower interest rate.

And if you expect to stay on an upward financial trajectory, you might even consider refinancing with a variable rate student loan. Variable rate student loans typically offer lower interest rates than fixed rate loans; however, variable rates are tied to market fluctuations, which means rates that are very low today are likely to go up at some point.

The upshot is that these loans could be a solid option for qualified borrowers who intend to pay off their loans at a relatively fast pace.

3. You don’t get any advantages from federal student loan benefits.

Certain types of federal student loans offer perks that should not be overlooked before considering refinancing. Borrowers who are teachers, enter the military, or go to work in the public sector may qualify for federal student loan benefits (such as potential student loan forgiveness) before considering refinancing with a private lender.

Some federal loans also offer relief for borrowers that experience financial hardships (such as loan deferment and graduated/income-driven repayment plans).

If you expect your income to be unpredictable, or you’re looking into qualifying public service employment, it’s usually a safer bet not to refinance federal student loans that are eligible for these benefits. But if you aren’t able to take advantage of any of these federal student loan benefits listed above, refinancing could make sense.

Recommended: Looking for more guidance on your student loans? Explore SoFi’s Student Loan Help Center for tips, resources, guides, and more!

If you find a lower rate for student loan refinancing –
SoFi will match it AND give you $100.*


4. You’re about to take out a loan for a mortgage or other large purchase.

For loans like mortgage loans, lenders typically take a look at your credit report to see what type of mortgage a borrower may qualify for.

Buying a new home or taking out another loan for a large purchase could be a good time to refinance your student loans for a lower interest rate, because it could help you get into better financial standing to get a good rate on loans like a mortgage, too.

If you think that student loan refinancing may be a good option for you, the next step is to do a little research by checking out several private loan providers to compare interest rates and other features.

You can also consolidate federal and private loans with SoFi, whereas many lenders do not. On top of that, refinancing your student loans with SoFi is easy.

Simply go to SoFi’s student loan refinancing page to get started. You only need to give a little information about yourself to find out your new rate.

Additionally, SoFi also offers personalized career services and job search assistance, and access to our extensive member network through complementary member experiences like happy hours and dinners.

Which means you could gain more than cost savings when you refinance student loans.

Want to learn more about refinancing your student loans? See your rates in just two minutes.



*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.
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.
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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
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF JANUARY 2022 DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
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.

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