Should you refinance your student loans? Compare rates, terms, and calculate total interest savings side-by-side.
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Best rates: 4-5.5% for 720+ credit
60, 84, 120, or 180 months
Based on your inputs
Over the life of the loan
New payment: $518
| Current Monthly Payment | $677 |
|---|---|
| New Monthly Payment | $518 |
| Monthly Savings | $159 |
| Current Total Interest | $14,965 |
| Refinanced Total Interest | $12,183 |
| Interest Saved | $2,782 |
| Current Total Paid | $64,965 |
| Refinanced Total Paid | $62,183 |
| Total Saved | $2,782 |
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Refinancing means a private lender pays off your existing student loans and issues you a new loan with new terms. You can potentially get a lower interest rate, change your repayment term, or consolidate multiple loans into one payment.
The key variable is your interest rate. If you originally borrowed at 6.8% (common federal rate for grad loans) and can refinance at 4.5%, you save 2.3% annually on your balance. On $80,000 in loans, that's $1,840/year in interest savings.
Refinance if: You have stable income, good credit (720+), no plans for PSLF, your current rate is above 5.5%, and you don't need IDR plans.
Don't refinance if: You're pursuing PSLF (10 years of qualified payments = forgiveness), you might need income-driven repayment flexibility, your income is unstable, or you can't qualify for a meaningfully lower rate.
The PSLF trap: If you refinance federal loans into private loans, you permanently lose PSLF eligibility. On $100K in loans, PSLF could save $50K+. Calculate both scenarios before deciding.
Fixed rates stay the same. Variable rates start lower but can increase. In a rising rate environment, fixed is safer. Variable makes sense only if you'll pay off the loan within 3-5 years (before rates can climb significantly).
A hard inquiry drops your score 5-10 points temporarily. On-time payments on the new loan build credit over time. Net effect is usually positive.
Yes — many lenders let you consolidate both federal and private loans into one refinanced loan. But you lose federal protections on the federal portions.
Most lenders require 670+. For the best rates, you need 720+. Some lenders also consider income, debt-to-income ratio, and degree type.
As many times as you qualify. If rates drop further, refinancing again is free (no prepayment penalties). Shop annually.
Fixed rates provide payment stability for the life of the loan. Variable rates start lower but can increase over time. Choose variable only if you plan to pay off the loan within three to five years before rates can climb significantly.
You permanently lose access to income-driven repayment plans, Public Service Loan Forgiveness, federal forbearance and deferment options, and any remaining federal loan subsidies. Evaluate these benefits carefully before refinancing.
A 2 percent rate reduction on $50,000 over 10 years saves approximately $5,500 in total interest. The exact savings depend on your current rate, new rate, loan balance, and repayment term you choose.
Shorter terms like 5 or 7 years have higher monthly payments but save the most in total interest. Longer terms of 15 to 20 years reduce monthly payments but cost more overall. Choose based on your cash flow needs.
Yes. Refinancing creates a brand-new loan, effectively releasing your original cosigner. Some lenders also offer cosigner release options on the refinanced loan after a set number of on-time payments.
Refinance when your credit score has improved since borrowing, your income is stable and documented, interest rates have dropped below your current rate, or you no longer need federal repayment protections.
Monthly Payment = P × [r(1+r)^n] / [(1+r)^n − 1]
Interest Saved = Current Total Interest − Refinanced Total Interest. Assumes fixed rates for both scenarios.
Every formula on this page traces to a federal agency, central bank, or peer-reviewed institution. We cite the rule-makers, not secondhand blogs.
Found an error in a formula or source? Report it →
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.