The Best Student Loan Refinancing Options


Student loan debt is a tricky beast.

Not only do student loans now account for $1.6 trillion, but student debt is also the second biggest source of personal debt after mortgages.

The big difference between a mortgage and a student loan, however, is the fact that refinancing a mortgage is a (relatively) simple and well-known process, whereas student loan refinancing is a new and confusing option.

Thankfully, many new banks and other types of lenders have been popping up to fill this very real need for student loan refinancing. However, not all refinancers are made equal, and it is important to understand what costs are associated with your decision to refinance.

Student Loan Consolidation vs. Refinancing

The first issue to understand on your journey to student loan relief is the difference between federal loan consolidation and student loan refinancing. The two options are similar and the terms refinance and consolidate are sometimes used interchangeably, but all borrowers ought to know the difference between them.

Federal Student Loan Consolidation

This option is just what it sounds like. Borrowers may consolidate multiple federal student loans into a single loan with a single repayment schedule. This kind of consolidation is only available for federal loans–you may not consolidate a private loan.

In general, federal student loan consolidation does not save you money, since you are charged the weighted average interest rate of all the loans being combined. However, consolidation can switch out a variable rate loan for a fixed loan, and it may lower monthly payments (although that usually means a longer payment term).

The main reason to consider a federal student loan consolidation is to maintain the benefits available to federal borrowers, such as Public Service Loan Forgiveness, income-driven repayment plans, and deferral and forbearance options.

Private Student Loan Refinancing

Refinancing a loan allows a borrower to apply for a new loan that is used to pay off one or more existing loans–which is remarkably similar to consolidation. The difference is the fact that you may refinance both federal and private loans, and you can potentially improve your interest rate and/or your monthly payment through refinancing.

Refinancing federal student loans does mean you are no longer eligible for the federal benefits. Also, refinancing could increase your monthly payment, depending on your repayment term.

Student Loan Refinancing Comparison Tools

The following tools offer a marketplace for student loan options. The benefits of using a marketplace: you can quickly compare real offers from multiple lenders, they have the widest eligibility criteria, and you can compare rates before finishing the application process. A marketplace also compares a wide range of financial histories with some lenders accepting lower credit scores with a co-signer. Before getting started, you may want to check out Experian Boost to see how your credit score could be improved.

Highlighted Marketplace: Credible



Credible offers a marketplace of student lenders for borrowers looking to refinance. Credible’s unique dashboard allows for side-by-side comparison of refinanced loans, which you can then sort by and compare by APR, monthly payment, or total repayment amount. 

How Credible Works

Credible has a simple application process that gives you results in two minutes that are easy to understand. Here are the steps to get started with Credible.

  1. Complete your application: You will need to provide details on your education, income, and your personal contact information.
  2. Compare your results: Credible will give you up to 10 prequalified personalized results to compare.
  3. Pick your option: Review your results and determine the best choice for your current situation.

Credible works with a selection of lenders that provide competitive interest rates and a range of loan terms. You can find a list of lenders and read each of their reviews here.

To prove they are offering the lowest interest rates on the market, Credible offers a Best Rate Guarantee. If you find a better interest rate somewhere else, they will give you $200.

Is Credible Legit?

Yes, Credible is a legitimate marketplace for consumers to make side-by-side comparisons of financial products. Credible is not a lender or a bank. They make money by referring borrowers (you) to their lender partners for which the lenders pay them a fee. Credible does not charge you for using their service.

With over 3,000 reviews, Credible’s customer satisfaction earns top honors on the consumer review website, Trustpilot. Their “excellent” ranking is the result of reviews completed about their service. More than 86% of reviewers place Credible’s customer and business service at five stars. 

The benefits of using Credible have been featured in numerous news outlets. According to USA Today, Fidelity is connecting borrowers to Credible through their Student Debt Tool to help them pay off student loan debt. And in a video segment, NBC Nightly News shares how Credible is helping parents and students lower their interest rates by an average of 37% just by using their competitive marketplace.

Borrowers must have at least $5,000 in federal or private student loans they want to refinance. Credible’s site lets you know immediately if the interest rate offered to you is competitive, which will help you determine if you are a good candidate for refinancing.

  • Fees: None
  • Pros: In less than two minutes, Credible lets you see whether you qualify for student loan refinancing and exactly what rates your qualify for. Credible’s dashboard does an excellent job of helping you sort and compare each offer without having to go through multiple applications.
  • Cons: Credible works with a larger group of lenders, but not all are represented. That said, their platform contains a wide range of rates and products available so users will have an opportunity to find a loan that is right for them.
  • Compare Offers with Credible


Lending Tree

LendingTree is an aggregation of the top loan companies. LendingTree gives multiple companies the opportunity to vie for your business and give you the best offer they can. If you are looking for a loan for your undergrad or even your Ph.D., this is a great place to start. 

LendingTree will do the research for you and give you the best results based on your location and loan amount. You don’t have to have credit in order to apply.

  • Loan Repayment Terms:5, 10, 15, and 20 years
  • Rates: Rates depend on when you apply and if you choose a federal or private student loan. If you choose a federal loan, Congress adds 2.05 percentage points to the rate of the new 10-year Treasury notes.
  • Fees: None
  • Pros: You will receive multiple loan offers. It is a one-stop-shop. LendingTree also provides a lot of tools and resources to help you with your financing needs. This includes financial calculators, interactive coaching tools, monthly newsletters, and lender ratings and reviews.
  • Cons: You could potentially receive unwanted phone calls or emails. To prevent this from happening have LendingTree put you on their DNC list by contacting

Best Student Loan Refinancing Options

Each of the following refinancing options has different requirements and alternatives for student loan borrowers. Read on to see which one will work best for you:


SoFi logo

SoFi is a non-traditional lender that uses a novel underwriting process. Their approach focuses on only lending to financially responsible borrowers, and they analyze “forward-looking” factors to determine each applicant’s future potential and ability to pay. For instance, as of early last year, SoFi no longer uses FICO credit score in underwriting but instead takes employment history and other factors into consideration. 

SoFi offers borrowers competitive rates, as well as other services such as unemployment protection, career counseling, and startup mentoring. You must borrow a minimum of $5,000.

  • Loan Repayment Terms: 5, 10, 15, and 20 years
  • Rates: Variable as low as 2.31% and fixed as low as 3.46%
  • Fees: None
  • Pros: Unemployment protection, career counseling, startup mentor, 0.25% savings if you pay through AutoPay.
  • Cons: SoFi’s underwriting process makes it more difficult for borrowers to qualify, meaning you are less likely to be approved with SoFi compared to other private lenders.



This peer-to-peer style platform offers refinancing for graduate and undergraduate students for graduates of over 2,000 universities. According to CommonBond’s promotional literature, borrowers save over $14,000 over the life of the loan by refinancing with them. 

The product that really makes CommonBond stand out is their “hybrid” loan. This is a loan that carries an initial fixed rate that switches to a variable rate after a set period. For borrowers who anticipate paying off their loan quickly, the hybrid loan can be a major money-saving option.

In addition, CommonBond offers high-touch customer service, and a community of students, graduates, and alumni, which allows for networking. CommonBond also offers CommonBridge, a service matching out-of-work borrowers with consulting opportunities until they find a new job, as well as financial hardship forbearance.

Finally, CommonBond offers something they call their Social Promise: for every degree that is fully funded through their platform, they fund the tuition of a student in need through Pencils of Promise.

  • Loan Repayment Terms: 5, 10, 15, and 20 years
  • Rates: As low as 1.85%
  • Fees: None
  • Pros: Financial hardship forbearance, networking opportunities, consulting service for borrowers between jobs, Social Promise, 0.25% savings if you pay through AutoPay
  • Cons: The list of eligible schools may not include your alma mater.
  • Get Started with CommonBond


Upstart is geared toward recent and upcoming college graduates, so it evaluates your potential based on factors that include what college you attended, your GPA, and even your SAT scores. This means borrowers who have not had the time to build a credit history can use their academic history and other proof of financial responsibility to qualify for a refinance. However, if you do have a credit score, it must be at least 640 in order for you to be eligible for an Upstart loan. 

Upstart is a peer-to-peer lending platform that connects borrowers with accredited investors who fund their loans. The platform charges an origination fee that varies based upon the borrower’s history and underwriting. In addition, all loans are either for a term of three or five years, and there is a minimum of $1,000 and a maximum of $50,000 on loans.

  • Loan Repayment Terms: 3 years
  • Rates: 6.14% – 35.99% APR
  • Fees: Origination fee between 1% and 6%. This fee is rolled into your APR.
  • Pros: Young adults who have not built up a credit history can qualify for refinancing with Upstart.
  • Cons: The loan term is relatively short, and the maximum amount to borrow is relatively low, making this a poor choice for a graduate with a lot of student debt. In addition, because of the unusual underwriting, qualifying for an Upstart loan may take longer than it would with other lenders.


Like Upstart, Earnest is a lender created for individuals without a long credit history. Instead of focusing on credit scores, Earnest looks at other markers of financial responsibility, such as employment history and salary, savings, income-to-expense ratio, and retirement savings. Earnest analyzes more than 80,000 data points for each prospective borrower, which means you must be comfortable giving the lender permission to scan your bank account. 

Earnest is also committed to flexibility for its borrowers. Unlike any other lender, Earnest allows clients to choose their exact term, rather than just from a set year range, which can lead to significant savings. Once you have been approved for a loan, you can easily alter your monthly payment amount or payment schedule. There are no late fees if you miss a payment. Instead, Earnests’ Client Happiness team will work with you to avoid default by adjusting terms or setting up payment plans. You can refinance an existing student loan starting at $5,000.

  • Loan Repayment Terms: 5 years to 20 years
  • Rates: Variable (with autopay) start at 1.99% and fixed (with autopay) start at 3.19%.
  • Fees: None
  • Pros: Student loan borrowers who otherwise try to avoid debt can get a much better APR with Earnest than they could with a traditional refinanced loan. The flexibility can be a boon to any responsible borrower with a non-traditional job or irregular income.
  • Cons: You must be willing to offer Earnest a very intimate look at your finances to qualify.

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  1. Avatar Nate Matherson says:

    Nice summary article! There are 43 million Americans with some form of student debt, yet not many even know that refinancing is an option. We did a survey of current college students and we found that less than 5% of current college students know that student loan refinancing is even an option! As more students realize the benefits of refinancing, I believe the $1.2 trillion student loan problem will shrink dramatically.

    Glad to see that we were included. Wishing you all the best!

  2. Avatar John Stevens says:

    I am not anxious to refinance my Parent Plus loans taken out for my daughter. My fear is that I will lose some of the advantages of having the loan forgiven if my daughter or myself, the signer of the Master Promissory Note either becomes fully disabled or die and the repayment obligation doesn’t transfer to the estate. When the loan is forgiven, it will appear as a taxable gift but my estate and final income tax return will only pay a much lower tax on the principal forgiven, not repay the principal.

    I approached some of the student loan refinance companies and I would lose that benefit, along with the others such as forgiveness after 20 to 25 years if the loan is in income based repayment (IBR). Also, if my daughter goes to graduate school, the loan returns to deferred with no payments due until the deferment ends and although interest accrues during deferment, again IBR will limit the exposure. Payments may be continued voluntarily.

    Refinancing for a parent is something that should be considered carefully. Having automatic payments does reduce the interest rate by 0.25% and Obama dropped the 7.9 % rate to 6.41% which I do appreciate. Signing up for IBR (income based repayment) limits the monthly payment to no more than 20% of one’s income and starts the clock towards general (as opposed to Public Service) forgiveness, something that a person approaching retirement can really take advantage of.

    Young married couples with loans in their own name may choose to refinance but it would be wise to cover the loan with a term life / disability insurance policy so as not to burden the surviving spouse with a huge loan in the case of demise.

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