Guide to Student Loan Refinancing Options
Updated: September 21, 2026
On the fence about refinancing student loans? We’re here to help you understand how refinancing works and whether it can lower your monthly payment, help you pay off your debt sooner, or save you money over the long term.
When you refinance student loans, your new loan may come with a different interest rate, monthly payment, repayment timeline, and borrower benefits. Understanding your primary goal for refinancing can help you evaluate whether it’s right for you.
Explore the potential benefits and tradeoffs, compare your options, and use our tools and resources to learn more before making a decision.
What Is Student Loan Refinancing?
Student loan Refinancing replaces one or more existing student loans with one private student loan. The new loan has its own interest rate, repayment term, and monthly payment.
Both federal and private student loans may be eligible for refinancing. Depending on the interest rate and repayment term of the new loan, refinancing could change how much you pay each month, how long it takes to repay your debt, and how much interest you pay over the life of the loan.
Refinancing federal student loans converts them into a private student loan, which means federal borrower benefits and protections no longer apply.
What May Change If You Refinance Student Loans?
Refinancing doesn’t have the same outcome for every borrower. A new loan can change several parts of your repayment strategy.
Some common changes include:
Interest Rate
A refinanced loan comes with a new interest rate. Depending on your credit score and economic conditions, that rate may be different from the rate you’re currently paying.
Monthly Payment
Your monthly payment can increase or decrease depending on your new interest rate, loan balance, and repayment term.
Repayment Timeline
These have fixed interest rates, so you’ll know upfront what your monthly payments and total interest charges will be.
Number of Loans and Payments
Refinancing multiple student loans will combine them into one new private loan with a single monthly payment.
Borrower Benefits
If federal student loans are refinanced with a private lender, they are no longer federal loans. That means federal benefits and protections associated with those loans are no longer available.
Total Interest Cost
The total interest you pay may change based on your new interest rate and repayment term. A lower rate or shorter repayment term may reduce total interest costs, while a longer term may increase them.
Compare Your Current Student Loans With a Potential Refinance
One way to evaluate refinancing is to compare your existing loans with the potential terms of a new loan.
When evaluating loan offers, look at more than the interest rate. Your monthly payment, repayment term, and estimated total interest can all affect the overall cost of borrowing.
For example, extending your repayment term can reduce your monthly payment but may result in your paying more interest over the life of the loan. A shorter term can increase your monthly payment but may reduce total interest costs.
A student loan refinancing calculator can help you compare these potential outcomes before you decide whether to apply.
Federal vs Private Student Loans: What Could Refinancing Mean?
Whether you have federal loans, private loans, or a combination of both is an important part of evaluating refinancing.
Refinancing Private Student Loans
Private student loans may be refinanced into a new private student loan. The new loan can have a different interest rate, repayment term, and monthly payment.
The loan offers available to you depend on factors such as your credit history, income, and debt balance, and lender requirements.
Refinancing Federal Student Loans
Federal student loans may also be refinanced through a private lender. However, refinancing them means replacing the federal loans with a private loan.
As a result, federal borrower benefits and protections associated with those loans are no longer available. This distinction is particularly important for borrowers who might use federal repayment or forgiveness programs.
Helpful tools and articles:
Student Loan Consolidation vs Refinancing
Student loan consolidation and refinancing can both involve combining loans, but they aren’t the same.
• Federal Direct Consolidation combines eligible federal student loans into a new federal loan. The new interest rate is based on the weighted average of the loans being consolidated, rounded up to the nearest one-eighth of a percentage point. Federal benefits remain available.
• Student loan refinancing replaces eligible federal and/or private student loans with a new private student loan. The new loan has a new interest rate and repayment terms based on the lender’s criteria and the borrower’s financial profile.
Refinancing federal loans means those loans are no longer eligible for federal benefits and protections.
| Factor | Refinancing | Federal Consolidation |
|---|---|---|
| Federal loans | May be eligible | Eligible federal loans |
| Private loans | May be eligible | Not eligible |
| Loan type afterward | Private | Federal |
| Interest rate | New rate based on lender criteria | Weighted average methodology |
| Repayment term | New term | New federal repayment term |
| Federal benefits | No longer available for refinanced federal loans | May remain available |
What Factors Affect a Student Loan Refinance Rate?
The available interest rate when refinancing isn’t the same for every borrower. Private lenders generally consider a combination of financial and economic factors when determining rates.
Those factors may include:
• Credit profile: Credit history and score may factor into the rate a lender offers.
• Income: Income helps a lender evaluate a borrower’s ability to repay the new loan.
• Existing debt: Existing financial obligations can also factor into a lender’s assessment.
• Repayment term: Rates may differ depending on the length of the term selected.
• Economic conditions: Broader interest-rate conditions can affect the rates lenders offer.
Understanding these factors may help provide context when comparing potential refinance offers.
How Does Your Repayment Term Affect the Decision?
The length of a refinance loan can affect both the monthly payment and the total cost of borrowing.
A Shorter Repayment Term
A shorter term can result in a higher monthly payment. If paired with a lower interest rate, however, it can reduce the amount of interest paid over the life of the loan.
A Longer Repayment Term
A longer term can reduce the required monthly payment by spreading repayment over a longer period. However, extending repayment may result in paying more interest over the life of the loan.
Comparing both monthly and lifetime costs can provide a more complete picture than evaluating the monthly payment alone.
Are You Eligible to Refinance Student Loans?
Eligibility requirements vary by lender. Lenders may consider factors such as your credit score and history, income, debt-to-income ratio, student loan balance, and the types of student loans you have. Lenders typically require a minimum credit score of 650 or higher, while SoFi requires a minimum credit score of 700.
For SoFi Student Loan Refinancing specifically, borrowers must meet certain requirements. SoFi’s criteria include requirements related to residency, eligible types of student loans, eligible schools, degree status, and minimum loan amount.
Explore Student Loan Refinancing Topics
Explore topics and resources that may help you better understand your student loan refinancing options.
I want to understand the potential numbers
Compare estimated monthly payments and lifetime interest under different refinance scenarios.
Explore: Student Loan Refinancing Calculator
I have federal student loans
Learn what may change when federal student loans are refinanced with a private lender.
Explore: Refinancing Federal Student Loans
I’m comparing consolidation and refinancing
See how federal consolidation and private student loan refinancing differ.
Explore: Consolidation vs. Refinancing
I want to understand refinance interest rates
Explore some of the factors lenders may consider when determining a refinance rate.
Explore: Student Loan Refinance Rates
I want to understand the refinancing process
See the steps involved in refinancing, from comparing potential rates through repayment of the new loan.
Explore: How to Refinance Student Loans
I want to explore a potential SoFi interest rate
Learn about the factors that may affect the rate and terms available to you.
Explore: SoFi’s Student Loan Refinance Rates
The Takeaway
Student loan refinancing can give borrowers an opportunity to replace one or more existing student loans with a new private loan. Depending on the new loan’s interest rate and terms, refinancing may change your monthly payment, repayment timeline, and total interest costs. Before refinancing, it’s important to consider your current loans and the potential tradeoffs, particularly if you have federal student loans and would be giving up federal benefits and protections.
SoFi allows eligible borrowers to refinance student loans. Even if you’re not quite ready to apply, now may be a good time to compare rates. And remember: A student loan refinancing calculator can help you run the numbers so you know what to expect before you refinance.
FAQs
What happens when you refinance student loans?
Refinancing replaces one or more existing student loans with a new private student loan. The new loan has its own interest rate, repayment term, and monthly payment.
Can federal student loans be refinanced?
Federal student loans can be refinanced through a private lender. However, doing so converts the federal loans into a private loan, meaning federal borrower benefits and protections no longer apply.
Can private student loans be refinanced?
Private student loans may be eligible for refinancing with another private lender, subject to the lender's requirements.
Could refinancing lower a student loan payment?
A refinanced loan could have a lower monthly payment depending on the interest rate and repayment term. Just be aware that extending the repayment term may lower the monthly payment but could increase the total interest paid over the life of the loan.
Could refinancing lower a student loan interest rate?
A borrower may qualify for a different interest rate when refinancing. The rate offered can depend on factors such as credit history, income, debt, loan term, and prevailing rates.
Is refinancing the same as student loan consolidation?
No. Federal Direct Consolidation combines eligible federal student loans into a federal consolidation loan. Refinancing replaces eligible student loans with a new private loan.
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