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Student Loan Refinancing Interest Rates

Student Loan Refinancing Interest Rates

Living with Student Loans
ELFI | February 27, 2023
Student Loan Refinancing Interest Rates

 

For borrowers with federal or private student loans, student loan refinancing can effectively save money, pay off their debt faster and simplify their payments. 

While refinancing rates are higher than previously — they reached historic lows in 2020 — refinancing may still be advantageous if you have high-interest student loan debt. Continue reading to learn about current interest rates and what you can do to secure the best student loan refinance rates. 

What Is Student Loan Refinancing?

Student loan refinancing is a term that refers to a process where you combine your existing student loans into one loan with a new lender. Student loan refinancing can be a smart way to save money and pay off debt faster, particularly for borrowers with high-interest debt. 

You can refinance both federal and private debt, including the following types of student loans

Tip: By refinancing your loans, you transfer them to a private lender. So while you can refinance federal loans, carefully consider whether you may need federal loan benefits in the future; once you refinance, the process cannot be undone.

How To Compare Student Loan Refinance Providers

To find the best refinancing option for you, consider the following factors when researching lenders: 

Benefits Of Student Loan Refinancing

There are four major benefits to student loan refinancing

1. Lower Your Interest Rate

Refinancing loans are credit-based, so the lender looks at your credit history, current debt, and income to determine your eligibility for a loan and what rates you’ll receive. If you’re employed and have good credit, you could qualify for a lower interest rate than you have now. With a lower rate, you could save a substantial amount of money. 

2. Reduce Monthly Payments

 When you refinance, you may qualify for a lower rate or change your loan term to a longer repayment period. With either approach, you could reduce your monthly payments and improve your cash flow. 

3. Combine Multiple Loans

You likely took out several student loans to pay for your education, and they all may belong to different lenders and loan servicers. By refinancing your debt, you combine all of your loans into one easy-to-manage account, and you’ll only have to remember to make one monthly payment. 

4. Remove Co-Signers

The majority of private student loans are co-signed. Co-signing a loan is a big responsibility, so refinancing is one way to remove a co-signer from the loan. If you meet the refinancing lender’s requirements on your own, you can remove the co-signer from the loan. 

What Credit Score Do You Need to Refinance Student Loans?

When refinancing student loans, lenders will require a specific minimum credit score along with other eligibility requirements to qualify. The minimum credit score to refinance student loans can vary by lender. For ELFI, you must have a credit score of at least 680 to refinance. Learn more about the eligibility requirements to refinance student loans.

Pre-Qualify and Get Your Student Loan Refinance Rate With ELFI

If you’re interested in taking advantage of low student loan refinancing rates, ELFI has a quick application and approval process for refinancing your student loans. Best of all, you can pre-qualify to see your estimated rate in minutes without affecting your credit score. Some benefits of student loan refinancing with ELFI* include:

Find out what student loan refinance rate options best suit you by exploring ELFI’s student loan refinancing calculator and Check My Rate tool.