Refinancing your student loans can help you pay off debt quicker, saving you money in the long run.
Check out our best student loan refinancing companies of 2021 below, along with industry insights and the latest CARES Act information.
Our Top Picks for the Best Student Loan Refinance Companies
Credible – Best Student Loan Marketplace
Splash Financial – Most Affordable Loan Payment Options for Medical Students
PenFed – Best Credit Union
Laurel Road – Best Loan Consolidation for Medical Students
Earnest – Best for Customizing Loan Payment
Best Student Loan Refinance Reviews
ProsCompare multiple lenders in one placeCheck if you qualify without a hard credit check
ConsNot a lenderYou must research each lender individually before applying
Prepayment Penalty
Varies by lender
Cosigner Release
Varies by lender, but several offer it
Loan Amount
Varies by lender
Loan Types
Private undergraduate, graduate and Parent PLUS
Credible is an online marketplace that provides personalized quotes from banks, fintech companies and state loan authorities such as Massachusetts Educational Financing Authority (MEFA) and Rhode Island Student Loan Authority (RISLA).
The marketplace offers student loan refinancing through undergraduate, graduate and Parent PLUS loans. While not all credible partners may offer the lowest interest rates compared to other lenders on this list, the marketplace boasts:
High approval rates
Income-driven repayment plans (particular to RISLA)
Other credible partner lenders include Advantage Education Loan, Brazos, Citizens Bank, College Ave, EdvestinU, ELFI, PenFed and SoFi.
ProsCompare multiple lenders in one placeCheck if you qualify without a hard credit pull
ConsNot a lenderYou must research each lender individually before applying
Prepayment penalty
Varies by lender
Cosigner release
Loan amount
Loan amount
Varies by lender
Loan types
Undergraduate, healthcare graduate and Parent PLUS
Splash Financial is an online marketplace that partners with loan servicers to provide medical students with the lowest student loan refinance rates and affordable repayment options. Loan terms range from 5 to 20 years for fixed-rate loans and 25 years for variable interest loans. While there is no maximum loan amount the minimum needed to refinance is $5,000.
For medical and dental residents:
Refinancing medical school loans with Splash could help you lower payments to as little as $100 a month for the duration of your residency, plus an additional six months after the end of the residency or fellowship.
Students with associate degrees in specific medical fields are allowed to refinance up to a maximum of $50,000 with Splash.
The company offers an easy loan application and pre-qualification process for undergraduate and Parent PLUS loans. Spouses can benefit from student loan consolidation and refinance their loans together, as the company offers the option to “take over” your spouse’s loans. Parent loans can also be transferred to the child.
Pros
Married borrowers can refinance their student loans into a single loan
Refinance parent PLUS loans under your name
Deposit $5 to open a membership account
Cons
Must become a PenFed member to apply
Prepayment penalty
None
Cosigner release
After 1 year of consecutive on-time payments
Loan amount
Up to $300,000
Loan types
Graduate, undergraduate and Parent PLUS
Pentagon Federal Credit Union is the second-largest credit union in the nation that offers student loan refinancing. PenFed’s student loan products are provided exclusively by online lender Purefy. The company offers fixed- and variable-rate options for borrowers — students, parents and couples — refinancing up to $300,000 in private or federal student loan debt, with loan payment terms ranging from five to 15 years.
With PenFed, married couples can file a loan application to refinance their student loans together.
The spouse with the highest degree should apply as the primary applicant to ensure the lowest interest rates.
Unlike traditional refinancing, only one person needs to have completed a bachelor’s degree or higher to refinance through PenFed’s Couple Loan.
The annual income requirement ranges from $42,000 to $50,000, depending on the loan amount and whether there is a cosigner or not.
As a member of PenFed, you will gain access to member discounts, an advice center and financial offers.
ProsReduced student loan refinancing rates for optometrists, nurses, dentists, physicians or physician’s assistantsNo application, origination or disbursement feesCan choose a term under 20 years
ConsShorter grace period (6 months) when compared to other lendersLoans are designed for people in the healthcare field, so not all graduate programs qualify
Prepayment penalty
None
Cosigner release
No, you must reapply for a loan to remove a cosigner
Loan amount
Min: $5,000 for bachelor’s degree and higher. Max: $50,000 for all non-parent PLUS refinance loans
Loan types
Undergraduate, healthcare graduate and Parent PLUS
Laurel Road’s medical school loan program is available for medical residents or fellows who want to consolidate their federal and private loans to have a single loan payment. Interest will not compound during your residency, and the company also allows you to reduce payments to as little as $100 per month for up to four years before you start standard repayments.
Your eligibility requirements as a resident are based on your:
Credit profile
Monthly debt payments
Income projections at the end of your training period
Laurel Road offers a refinancing option for up to $50,000 for medical residents with associate degrees in eligible healthcare fields. The $50,000 maximum will not apply to parents borrowing for children pursuing an associate degree.
ProsCustomizable payments and loan termsOption to skip one payment every 12 monthsAutopay discounts are availableCan refinance your full student loan amount
ConsYou can’t apply with a co-signerNot available for citizens of Kentucky and Nevada
Prepayment penalty
None, and no late payment charges
Cosigner release
No
Loan amount
$5,000-$500,000
Loan types
Undergraduate, graduate and Parent PLUS
Backed by student loan giant Navient, Earnest offers multiple loan repayment options and refinance loans for students and parents at competitive rates. The company also features a unique underwriting approach, which factors your earning potential to determine your interest rate and payments. Earning potential is based on your degree, your history of on-time payments and your credit score.
Earnest also offers a “precision pricing” option, which:
Allows you to choose a loan repayment term based on your ideal monthly payment amount
Offers term lengths at 1 to 3-month intervals between 5 to 20 years
Benefits recent graduates or borrowers that may not have sufficient credit history to qualify for refinancing elsewhere
To refinance your student loan through Earnest, you must have a minimum loan balance of $5,000, or $10,000 if you reside in California. The company states that once you are approved, you are automatically approved for your entire loan amount, but you can choose to refinance less.
Other student loan refinance companies we considered
Navy Federal Credit Union
Minimum income requirements
Individual: 21 months or more of credit history and a monthly income of at least $2,000.
Cosigner: Borrower must have a minimum monthly income of $100, and the cosigner must have a minimum monthly income of $2,000.
Fees
No application or origination fees
Prepayment penalty
No prepayment penalties
Cosigner release
May be requested after 12 consecutive, on-time principal and interest payments.
Fixed interest rate
Start at 2.99%
Variable interest rate
Start at 1.61%
Loan amount
$7,500-$125,000 for undergraduate debt, $7,500-$175,000 for graduate or combined student loan debt
Loan types
Fixed and varied
Navy Federal is the largest credit union in the world and specializes in banking and financial services for members of the military. Students with any type of student loan with Navy Federal are eligible to use the Career Assistance Program, an online job training tool that provides tips on interviewing, resume building and more. Parents that have taken out loans for multiple children can refinance and benefit from student loan consolidation.
Why it didn’t make the cut:
Limited membership: The credit union only services members of the military or those who have family or household members in the armed forces.
Common Bond
Minimum income requirements
650
Fees
No application, origination or disbursement fee
Prepayment penalty
No prepayment penalties or late penalty charges
Cosigner release
May be requested after three years of consecutive, on-time principal payments
Fixed interest rate
From 2.59% to 6.94%
Variable interest rate
From 1.96% to 7.02%
Loan amount
$5,000-$500,000
Loan types
Fixed and varied
Common Bond has no origination or prepayment fees and offers a seamless application process. Other highlights include Up 24 months of forbearance due to a national disaster –such as the COVID-19 pandemic – and a referral program that pays $200 if someone you refer takes out a loan or refinances with Common Bond.
Why it didn’t make the cut:
While CommonBond is a popular choice for many, it didn’t make the list of top lenders because it doesn’t offer refinancing options for federal Parent PLUS student loans, one of our main selection criteria.
Citizens Bank
Minimum income requirements
650
Fees
No application, origination or disbursement fees
Prepayment penalty
None
Cosigner release
May be requested after 36 consecutive on-time principal payments on principal and interest
Fixed interest rate
From 2.44% to 7.83%
Variable interest rate
From 1.99% to 7.58%
Loan amount
$10,000-$50,000
Loan types
Fixed and varied
Citizens Bank combines the stability of a traditional bank with the flexibility of online lending and offers refinancing options for both students and parents.
Loan refinancing is available to permanent resident aliens and non-U.S. citizens (with a qualified co-signer), something that most other loan servicers don’t offer.
Why it didn’t make the cut:
Citizens Bank has a history of complaints. This eventually resulted in regulatory action by the CFPB in 2015. The issue seems to have improved within the past few years, as there are currently only 43 complaints against the company’s student loan refinance products at this time.
SoFi
Minimum income requirements
Does not disclose
Fees
No application, origination or disbursement fee
Prepayment penalty
None, as well as no late payment charges
Cosigner release
May be requested after the student has graduated and completed 12 on-time payments, among other requirements
Fixed interest rate
From 2.49% to 6.94%
Variable interest rate
From 1.74% to 6.59%
Loan amount
$5,000 up to your total outstanding loan balance
Loan types
Fixed and varied
SoFi is a leading online loan servicer that offers student loan consolidation and refinancing for undergraduate, graduate, medical student and Parent Plus loans.
Member perks include career coaching, free access to a college cost comparison tool, free access to personalized financial planning advice and a referral program that pays you and the person you referred $300 for refinancing with SoFi.
Why it didn’t make the cut:
While SoFi offers competitive rates and provides members with various cost-free benefits, the lender barely missed making our list of top student loan refinance servicers. It currently has 53 complaints against it with CFPB, mainly relating to its loan process.
Student Loan Refinance Guide
In this guide, you will find information on what refinancing your student loans entails, when the best time to refinance is and what you need to qualify.
How does refinancing student loans work?
When you refinance your student loan you are replacing your existing loan with a new loan with new terms from a private lender. Generally, borrowers refinance student loans to extend their repayment period, lower their interest rate or consolidate multiple student loans into one single payment.
You can only refinance student loans through a private lender, not the federal government. If you have federal student loans, keep in mind that you will be giving up federal benefits that come with government loans such as student loan forgiveness and certain loan repayment programs should you choose to refinance. If your student loan is from a private lender you can refinance with your current lender or choose a different lender.
When to refinance student loans
With interest rates near historic lows, refinancing your student loans — whether federal or private — can save you money by replacing your existing education debt with a new loan under a private lender.
Refinancing a federal loan can mean losing valuable benefits and protections, such as income-based loan repayment plans, public service loan forgiveness, interest subsidies and student loan tax deductions.
Take a look at the following pros and cons to determine if refinancing your student loan is right for you.
Pros
Take advantage of market fluctuations to reduce your rate
Shorten or lengthen your loan repayment term
Increase or lower your monthly payment
Consolidate federal and private student loans and have a single monthly payment
Option to remove your cosigner
Multiple repayment terms are available, often 5 to 20-years
Cons
No federal repayment protections
No federal student loan forgiveness
Subject to the private lender’s repayment terms
No flexibility to alter the repayment plan without refinancing
No income-based repayment option
Irreversible: private loans can’t be converted back to federal loans
How to refinance student loans
Check your credit
Student loan lenders will take into account your creditworthiness. Generally, borrowers with credit scores in the high 600s, typically around 650 to 680, are more likely to qualify for a refinance loan. If you have a low score or bad credit, a good first step is to check your credit reports for any incorrect information that may be affecting your score. By recognizing errors early on, you can remove them from your credit history and work to improve your financial situation.
Consider the types of loans you have
Refinancing a federal loan means you lose exclusive benefits provided by the U.S. Department of Education, including public service loan forgiveness (PSLF), income-driven repayment plans, forbearance options and deferment. Private student loans generally have a limited disaster or emergency forbearance period compared to federal loans.
Shop around
When comparing lenders, look at the credit score and annual income requirements, the annual percentage rate (APR) offered and debt-to-income ratio (DTI) requirements. Take the time to check the lender’s history with customer complaints or whether they’ve had any recent lawsuits related to their student loan products within the last 5 years.
Evaluate cosigner release options
Some private lenders may offer cosigner release options if the primary borrower meets specific repayment criteria. With a co-signer release, the cosigner’s credit will be cleared of debt, but the loan will remain in their credit history.
Research lender’s financial hardship relief options
Some online lenders offer student loan unemployment deferment and forbearance, relief options that allow you to temporarily pause loan payments until you get back on your feet. A typical forbearance period with a private lender can be two to three months.
To learn more, check out our full guide on how to refinance student loans.
Student loan refinance application requirements
Good credit
Most lenders require credit scores above 650, though you’ll need a higher score to qualify for the lowest advertised rates. If your credit is too low or you have a short credit history, you’ll likely have to apply with a cosigner that has strong credit and a stable income.
Proof of Income
Stable annual income is essential. Lenders will evaluate your debt-to-income ratio (DTI), meaning the percentage of your gross income that goes toward paying debts each month. Most companies require you to have a low DTI to qualify, but some may accept written job offers as sufficient evidence.
Cosigner
Applicants with insufficient credit history, low income or a low credit score will benefit from a cosigner. A cosigner can be a parent or relative that applies for the loan with you and takes on the responsibility of paying it back if you can’t. Cosigners must have sufficient income and strong credit.
College degree
A college degree isn’t always necessary to refinance your student loans, but having a degree gives you more options. Most lenders require a bachelor’s degree to qualify for refinancing, and a few accept borrowers with associate degrees.
U.S. citizenship or permanent residency status
Most, if not all, lenders require you to be a U.S. citizen or permanent resident to be eligible to refinance your student loans. If your student loans are foreign, it’s recommended that you build sufficient credit in the United States to qualify for refinancing.
Student loan refinancing vs. Student loan consolidation
One of the benefits of refinancing through a private student loan lender is that borrowers can consolidate multiple loans into one loan and have a single monthly payment under one servicer. Here are the key differences between student loan consolidation and refinance:
Private Loan Refinance
Direct Loan Consolidation
Replaces one or more existing loans — federal or private — with a new private loan.
Combines your existing federal student loans into one federal student loan.
Available for federal and private loans, depending on the lender.
Available for federal student loans only.
Interest rates are determined by your credit history and potential market trends. This may result in a lower interest rate.
Your new interest rate will be the result of the weighted average of the interest rates on the loans you’re consolidating, so this option does not reduce the amount of interest you’re paying each month.
Credit history will be verified.
Does not require a credit check for approval.
Fixed- or variable-interest-rate loans.
Can consolidate variable rate loans into fixed-rate loans.
Multiple repayment terms are available, often 5 to 20-years.
Consolidation loans offer several repayment options besides the standard 10-year repayment plan and can extend the term of the loan by 12 to 30 years.
Parent PLUS loans can be refinanced under the adult child’s name, relieving parents of debt.
Parent Plus loans cannot be consolidated under the adult child’s name.
You lose all benefits associated with federal student loans.
You retain all benefits and protections available to federal student loans.
Student Loan Refinance and COVID-19
CARES Act
On August 6, 2021, the Biden administration extended the current suspension of federal student loan payments, interest and collections to January 31, 2022. That relief applies to federal student loans that haven’t defaulted, as collections and garnishments have been suspended until that date.
Student loan servicers’ COVID-19 response
PenFed
• Forbearance or adjusted loan repayment plan for up to 6 months for those who qualify
• The option to file a COVID-19 Hardship Application for additional support
Consumers can find more information here.
Laurel Road
• Forbearance of 3 monthly payments
• The option to request an additional 3-month forbearance if you are still unable to meet your payments. To qualify for these additional 3 months your account must have been current before the first COVID-19 forbearance.
For more information, please refer to their Coronavirus Response page. This resource consists of a financial guide centered on the current pandemic and discusses how to better navigate hardship.
Splash Financial
• Lower rates in response to the economic crisis
Splash Financial encourages clients to reach out so they can negotiate accommodations like forbearance or waiving fees.
Earnest
• Short-term forbearance, which will make eligible loans current and postpone payments for at least a month.
• Coronavirus national emergency forbearance, which allows qualified customers up to three months of delayed payments.
• Short-term interest-only program that allows clients to make lower (interest only) payments for up to 90 days.
Customers are encouraged to access their Coronavirus Response Center, a web page that addresses common questions about hardship, disaster forbearance and their other payment postponement options.
Navy Federal Credit Union
Eligible members have access to:
• Loan extensions
• Deferred payments
• credit card line increases
• Student loan forbearance through LendKey
• Overdraft protection, fee-free transfers
• Penalty-free certificate withdrawals.
The company encourages borrowers to contact their Student Loan Center at 1-877-304-9302 for more information.
Common Bond
• Natural disaster forbearance for the duration of the national emergency declaration. Interest will still accrue, but there are no additional fees.
• All late fees are waived
You can apply for this forbearance at commonbond.co/forbearance.
Citizens Bank
• Three-month emergency loan forbearance. Interest will still accrue.
• The option to request two additional three-month forbearance periods, for a total of nine months.
• All late fees are waived
SoFi
• Payment deferral.
• The option to request a forbearance period for two to three months (interest will still accrue, and the life of the loan will extend).
Credible is excluded from this section because it’s a loan marketplace and does not issue loans. As it does not have its own COVID-19 policy in place, we recommend you refer to the specific loan servicer’s platforms for further information.
Best student loan refinance FAQ
Can you refinance federal student loans?
Yes, even though federal loans can be consolidated, you can choose to refinance them instead. However, note that you will lose federal student loan benefits, including repayment options.
How to refinance a student loan
First, decide if refinancing is the right option for you, as opting to refinance your federal loan will eliminate various federal loan benefits, including low interest rates, repayment grace periods and deferment/forbearance options. Once you’ve made up your mind, you can shop for rates online and pick the best offer for you.
How often can you refinance student loans?
You can refinance your student loan as many times as you want. Student loans typically don’t carry any origination or prepayment fees. If you’ve already refinanced your student loan but have improved your credit score or found a better rate, you can refinance again.
Should you refinance your student loans?
Refinancing your federal student loan isn’t the best option for everyone. Federal loans usually have favorable terms and benefits you would lose by refinancing with a private lender. Before opting to refinance, look into the benefits of consolidating your federal student loans. Refinancing can be worth it only if it considerably lowers your interest rate and saves you money in the long run.
Summary of Money’s Best Student Loan Refinance Companies of December 2021
Credible – Best Student Loan Marketplace
Splash Financial – Most Affordable Loan Payment Options for Medical Students
PenFed – Best Credit Union
Laurel Road – Best Loan Consolidation for Medical Students
Earnest – Best for Customizing Loan Payment
