Best Options to Refinance Student Loans In 2022

refinance student loans

You can save hundreds or even thousands of dollars if you refinance student loans in the right situation. Here’s how the whole process works. First, a new private company, usually an online lender, bank, or credit union, pays off the debt you decide to refinance. 

You get a new loan with an interest rate linked to your credit history, income, and other factors when you do that. So think about refinancing your student loan if you have a steady income and a good credit score. 

You can even refinance federal PLUS loans. That can relieve your parents of payment responsibilities. 

We’ll explore everything you need to know about various options to refinance student loans. We’ll also show you some perks you need to know to make your student loan refinance successful. 

With that said, let’s begin. 

What is Student Loan Refinance? 

When you refinance student loans, you take out a new loan to clear off an existing one. You may be eligible for a reduced interest rate and a different repayment duration if you refinance your student loans, which might help you save money on interest or cut your monthly payments.

Refinancing is a smart choice if you have a large monthly payment or a high-interest rate. That’s because it can make loans more manageable in the short and long term.

Borrowers with excellent credit will be eligible for the best conditions and rates. You can refinance both federal and private student loans. However, it’s usually advisable to avoid federal loans because they come with several benefits private lenders don’t offer.

How To Refinance Student Loans

Here’s how to get started if you’re thinking about refinancing your student loans:

  • Examine your credit report. Many lenders will only refinance your loans if you have decent credit. However, if you notice that your credit score is low (below 650), you can find a qualified co-signer or take steps to raise it.
  • Take a look around. One of the most critical things you can do when refinancing private or federal student loans is shop around. Talk to many loan lenders and look into student loan refinancing rates to ensure you’re getting the best price.
  • Select a financing option. Lenders who approve you should provide you with various repayment options, which will affect your monthly payment and the total amount you pay back on your loan. Choose a loan that fits your budget and objectives.
  • Send your application. While some lenders will allow you to examine rates using a simplified application form, you will eventually be required to submit a complete application. You’ll need information on your current loans and paperwork proving your income, and other financial information. You’ll be subjected to a rigorous credit inquiry at this time.

Refinance Student Loans: 5 Best Companies Of January 2022

refinance student loans

1. Splash Financial 

Splash Financial is one of the best online marketplaces that work with loan servicers to find the best repayment options and student loan refinance rates for medical students. Fixed-rate loans have five to 20 years, whereas variable-rate loans have a term of 25 years. 

There’s no maximum student loan amount, but you need a minimum of $5,000 to refinance. 

For residents in the dental and medical fields:

  • You can refinance student loans with Splash to help you cut your monthly payments. It can be as low as $100 per month for the period of your fellowship or residency, including an additional six months afterward.
  • Splash allows students with associate degrees in specified medical disciplines to refinance up to $50,000 in student debt.

The firm provides a simple pre-qualification and loan application process for Parent PLUS loans and undergraduate loans. In addition, spouses can save money by refinancing and consolidating their student debts, as the company allows you to “take over” your spouse’s loans. 

Parental loans might be passed down to the child.


  • You can compare multiple student loan lenders in one place.
  • You can also check your eligibility without a hard credit check 


  • Splash isn’t a financial institution
  • Do your research for each loan lender before you apply. 

2. PenFed 

Pentagon Federal Credit Union is the second-largest student debt refinancing credit union in the United States. Purefy, an online lender, is the sole provider of student loan products for PenFed.

 You can refinance up to $300,000 in federal or private student loan debt. In addition, PenFed offers variable- and fixed-rate alternatives with loan payment durations ranging from five to 15 years.

If you’re married, you and your partner can use PenFed to apply for a loan to refinance your student loans.

  • The spouse with the highest degree should apply as the principal candidate to get the best prices.
  • Unlike standard refinancing, PenFed’s Couple Loan requires one person to have finished a bachelor’s degree or higher.
  • Depending on the loan size and whether or not a co-signer is present, the yearly income requirement varies from $42,000 to $50,000.

You will have access to member rate savings, an assistance center, and financial offers as a PenFed member.


  • Borrowers who are married can consolidate their college loans into a single loan.
  • Parent PLUS loans can be refinanced in your name.


  • You must deposit $5 to start a membership account.
  • To apply, you must first join PenFed.

3. Credible 

Credible is an online marketplace that offers individualized estimates from banks, fintech firms, and state loan agencies like the Massachusetts Educational Financing Authority (MEFA) and the Rhode Island Student Loan Authority (RISLA).

Student loan refinancing is available through the marketplace for Parent PLUS loans, undergraduate and graduate. However, not all Credible partners offer reduced interest rates, especially when comparing them to other lenders on this list. 

But the Credible’s: 

  • Acceptance rates are high.
  • Repayment arrangements based on income (particular to RISLA)


  • Compare numerous loan lenders in one place.
  • Find out if you’re eligible for a loan without a credit check.


  • Credible is not a loan lender. 
  • Before applying, do your research on each loan lender individually.

4. Earnest 

Earnest, backed by Navient, provides parents and students with various loan repayment alternatives, including cheap loan refinancing rates.

In addition, the organization uses an extraordinary underwriting approach that considers your earning potential when determining your payments and interest rate. Your earning potential is determined by your educational background, payment history, and credit score.

Earnest also has a “precision pricing” option, which includes the following:

  • Allows you to set a loan repayment period based on the amount of money you want to pay each month.
  • The option benefits recent graduates or borrowers who may not have enough credit history to qualify for other types of refinancing.
  • Offers term lengths ranging from five to 20 years in one to 3-month increments.

Your minimum student loan balance must be $5,000, or $10,000 if you live in California. Only then can you refinance student loans with Earnest. 

Once you’ve been authorized, you’ll be approved for the total amount of the loan. But you can choose to refinance for less.


  • Payments and loan conditions can be customized.
  • Every 12 months, you have the option of skipping one payment.
  • Discounts for autopay are available.
  • You may be able to refinance your entire student loan debt.


  • You won’t be able to apply if you have a co-signer.
  • Kentucky and Nevada’s residents are not eligible.

5. Laurel Road 

Medical residents or fellows who want to refinance student loans can use Laurel Road’s loan service. During your residency, interest won’t compound, and the company will allow you to make payments as low as $100 per month for up to four years before beginning conventional repayments.

As a resident, you must meet the following requirements:

  • Credit history
  • Debt payments each month
  • Estimated earnings when your training session ends. 

If you’re a medical resident with an associate degree in approved healthcare disciplines, Laurel Road will offer a $50,000 refinancing option. 

Parents borrowing for their children earning an associate degree won’t be subject to the $50,000 limit.


  • Student loan refinancing rates are lower for nurses, physicians, dentists, optometrists, or physician’s assistants.
  • There are no costs for origination, application, or payout.
  • You can choose a period that is less than 20 years.


  • Compared to other loan lenders, Laurel Road has a shorter grace period.
  • Because the loans are intended for persons working in the healthcare industry, not all graduate programs are eligible.

Should You Refinance Student Loans? 

refinance student loans

If the loan you want has a lower interest rate than your current student loan interest rate, refinancing makes financial sense. You can compare your current monthly payment to the loan you want to refinance using a loan calculator. 

While you may choose to refinance to a longer-term to reduce your monthly payments, keep in mind that both a higher interest rate and longer-term will raise the entire cost of the loan.

The sort of debts you have will also influence whether or not you should refinance. If you have private loans, refinancing might be a smart option, but you’ll forfeit benefits if you refinance federal loans. These benefits include:

Should You Refinance Student Loans During COVID-19? 

It’s not a good idea to refinance your federal loans right now. And that’s because payments and interest on federal student loans are now waived until May 1, 2022. So when you refinance student loans, you’ll be forced to make interest payments and lose access to any future federal forgiveness programs.

However, because the Department of Education has announced that this is the final extension of the forbearance period, it could be good to use the next few months as a trial period. 

You can keep your monthly loan payments aside and observe how it affects your budget. And it doesn’t matter if you don’t make payments. 

If your current financial circumstances don’t help your federal loan payments, you can review whether to refinance once payments roll again in February.

If you have private student loans and can qualify for a lower interest rate, refinancing is good. However, interest rates are now at all-time lows, and they’re only expected to rise when the economy recovers, so checking for a fixed rate now could be a smart move.

Refinance Student Loans: Pros & Cons To Look Out For 


  • You can combine many student loans into one, allowing you to make a single monthly payment.
  • You may be able to get a reduced interest rate.
  • You can lower your monthly cost by refinancing to a longer repayment period.


  • Private lenders typically require strong or excellent credit (or a co-signer) to qualify for a new loan with the best rates and terms.
  • When you refinance federal student loans with a private lender, you give up federal safeguards, including forbearance, deferment, and income-driven repayment plans.
  • You’re committing to yet another repayment plan.

Choosing Between Variable-Rate And Fixed-Rate Loan 

You can refinance with a variable or fixed interest rate from most private lenders. Your interest rate will never vary with a fixed rate, so your monthly payment will remain steady. However, your interest rate will fluctuate month to month depending on market conditions if you have a variable interest rate.

The decision between a fixed and variable rate is mainly based on your risk appetite. A fixed rate is a preferable option if you value financial certainty, especially if you can get a low-interest rate. 

You can save more money with a variable interest rate if interest rates decrease, but the contrary is also true. If interest rates increase throughout your repayment term, you’ll pay more money unless you clear off your student debts early.

How To Refinance Student Loans With Bad Credit 

If you have terrible credit, you can refinance your loan, but the process will be pretty complicated. You’ll need a credit score around 600 by most lenders, and even if you qualify, your interest rates will almost certainly be higher. 

If this is the case, refinancing may not be worthwhile in the long run. Check your credit score before you apply for a student loan refinance to see where you stand and compare it to the credit standards provided by lenders.

Keep the following points in mind if you want to refinance your student loan with bad credit:

  1. Shop around: Getting quotes from at least three loan lenders is the best way to determine which one is right for you. Of course, if you have bad credit, your rates will be higher. But specific lenders are more tolerant than others.
  1. Improve your credit score: Before submitting your application, work on boosting your credit score if possible. In addition, before applying for your refinance loan, try to pay off your student and on time. Finally, try to do your best and avoid using any credit cards or new loans.
  2. Apply with a co-signer: If you have a relative or friend who’s prepared to co-sign your loan, you may be eligible for a lower interest rate – especially if that person has good credit.
  1. Improve your cash flow: When lenders evaluate your application, they look at your debt-to-income ratio. So pay off a significant amount of debt before applying. Another way is to increase your income to improve your chances of qualifying.

Requirements To Refinance Student Loans 

refinance student loans

If you want to know how to refinance student loans, check the exact refinancing requirements once you’ve found a lender that best suits your financial condition. Of course, these can differ from one lender to the next. However, there are a few common ones to keep in mind:

  • Debt-to-income ratio: This is the calculation that compares your monthly earnings to your accumulated debt. If your debt-to-income ratio is less than 43 percent, you have a better chance of getting accepted.
  • Credit score: When applying for a loan, your credit score plays a significant role. Before using it, make sure you know your lender’s credit score criteria. If your credit score is around 600 or lower, you may have to ask a co-signer for help. 
  • Income: Lenders may set a minimum income requirement, and they’ll almost certainly want to see proof of work, which shows that you’ll be able to make your monthly payments.
  • Refinancing amount: You’ll probably need at least $5,000 in outstanding student loans if you want to refinance. Most lenders won’t work with you if you have less than that.

Final Thoughts 

If you want to refinance student loans, you should search for the best interest rate. You may discover rates as low as 2% or 3% if you have a strong credit score. But each loan lender evaluates qualifying requirements differently. 

That’s why it’s good to find out from at least three loan lenders if you’re qualified before you proceed. Use this guide to show you how to refinance student loans. If you need any assistance, contact us, and we’ll gladly help you out.