Student Loan Refinancing Right for You? 7-Question Quiz

By Katie Taylor Updated on April 30, 2019

If you’re struggling to make your monthly student loan payments, you may be considering ways to lower them. By refinancing for a lower interest rate or a longer payment term, you could reduce your payments to a more manageable number.

Of course, you might benefit from refinancing your student loans even if you don’t have trouble making your payments.

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But student loan refinancing isn't the right choice for everyone. Ask yourself these seven questions to see if it’s your best move.

1. Will your loan balance qualify?

Some lenders have a minimum balance requirement on private loans—often $5,000 or more.

If your balance is considered too low to refinance, but you’d still like a savings strategy, consider paying a little more than the minimum due each month—especially on high-interest loans—and asking your loan servicer to put the extra toward the principal.

You’ll lower your balance more quickly without drastically increasing your monthly payments.

2. How good is your credit score?

Your credit score determines what interest rates and terms you can receive. A history of on-time student loan payments improves your score. Lenders generally look for a score between 690 and 850.

If your score is too low, you might need a cosigner to insure your student loans in the case of default. If you’ve built a good credit score since taking out loans, you may be able to release a past cosigner from their obligation if you refinance.

One word of caution: when you apply to refinance, the lender will check your credit report. If you apply to several lenders to shop for rates, these inquiries will show on your credit report and could briefly lower your score. Try to limit your loan shopping to less than 15 days to reduce the impact.

3. Would you ever take advantage of federal loan repayment programs?

If you refinance a federal student loan with a private lender, you could lose eligibility for:

Also, if you have federal student loans and you teach, work in the public sector, or are currently eligible for income-driven repayment, you may qualify for student loan forgiveness—something you’d lose if you refinance. Find out before you make your decision.

In some cases, you may be more interested in reducing your interest rate than maintaining the federal repayment options. And if you do refinance your federal student loans, the new lender may offer flexible repayment plans that could impact your monthly payments and possibly reduce the amount you pay over the life of the loan.  

4. Do you have a steady source of income?

Having a steady full-time job shows lenders you’ll probably be able to make your payments on time, which can help qualify you for a lower interest rate when you refinance.

If your income stream is less certain, you may need a cosigner. 

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5. What interest rate are you able to get?

Interest rates on federal student loans can range from less than 4% to more than 7%, depending on the loan type. Private loan rates can be even higher, topping out at over 14%. 

If your current interest rates are high, you can probably save money by refinancing.

If the interest rate on your potential new loan is variable (which means it can fluctuate), make sure you find out how it’s calculated, how often it’s adjusted, and whether there’s a limit on how high it can go.

Fixed rates are less risky because they stay the same over time. Variable rates often start lower but could rise based on their specific index.

6. What are the new payment details?

Getting into the nitty gritty can be tedious, but it’s a necessary part of any big financial decision, especially refinancing your student loans. The specific terms of one plan might work better for you or result in lower payments over the life of the loan.

Ask your potential lender these questions:

  • When will my first payment be due?
  • How much will I owe each month?
  • How long will my repayment term be?
  • Can I pay off more than the minimum each month? How?
  • What will I pay in total?

You may also want to ask what happens if you lose your job or can’t make your payments.

7. Are there discounts or extra fees?

Some lenders offer discounts for behaviors they want to incentivize.

For instance, many provide a reduced interest rate if you opt for automatic debit, which helps ensure you make payments on time. If you’re relying on a discount, you may want to ask whether you could lose the discount under certain circumstances, like if you make a late payment.

Also, be sure to ask whether there are fees associated with refinancing. Some lenders charge a student loan origination fee or fees if you miss a payment, default on your loan, or even prepay.

See our picks for the best no-fee student loan refinance lenders.


Published in: Refinance

About the Author
Katie Taylor

Katie Taylor is a content writer and editor with expertise in law and policy, finance, and entrepreneurship. She writes for startups and small businesses about everything from bookkeeping to telecom. Her work has been featured in The Washington Post and She is continuing to pay off law school loans and lives in Richmond, Vermont with her wife, son, and an unruly dog. Read more by Katie Taylor

The Best Companies To Refinance Your Student Loans Save Money Now

Refinance and Save Today With These Lenders

#1 - Nitro Recommended View More Details

Special offers for medical resident and fellow refinance products

  • Fixed rates: 2.30% - 6.25% APR
  • Variable rates: 1.74% - 6.15% APR
  • Minimum credit: 650
View More Details
Visit Splash View Loan Disclosure

Splash Financial is a leader in student loan refinancing with new rates as low as 2.30% fixed APR which can save you tens of thousands of dollars over the life of your loans. No application or origination fees and no prepayment penalties. Splash Financial is in all 50 states and is intensely focused on customer service. Splash Financial is also one of the few companies that offers a great medical resident and fellow refinance product. You can check your rate with Splash in just minutes.

  • Low interest rates – especially for graduate students
  • No application or origination fees. No prepayment penalties.
  • Co-signer release program - you can apply for a cosigner release form your loan after 12 months of on-time payments
  • Specialty product for doctors in training with low monthly payment

Click here to see more of Splash's offerings and to see how you can save money.

#2 View More Details

Customers have saved an average of $2,664* a year from switching their loan to Citizens.

  • Fixed rates: 2.44% - 7.83% APR1
  • Variable rates: 1.99% - 7.58% APR1
  • Average Monthly Savings: $222
View More Details
Visit Citizens View Loan Disclosure

Citizens is honored to be named a Best Student Loan Refinance Company 2021-2022 by U.S. News & World Report.

  • Additional Discounts: Reduce your interest rate up to 0.50 percentage points when you refinance or consolidate your student loans with a Loyalty* and Automatic Payment Discount.*
  • Cosigners Welcome: Apply with a qualified cosigner to increase chances of approval or help secure a lower interest rate.
  • Cosigner release: After 24 to 36 months
  • Flexible Options: One convenient monthly payment for your student loans. Choose your loan repayment term (5, 7, 10, 15 & 20 year options).

Click here to see more of Citizens refinancing benefits and to start saving today!

#3 View More Details

Ability to apply for cosigner release after 24 consecutive payments. 

View More Details
Visit NelNetBank View Loan Disclosure

Give Your Life’s Journey a Jump-Start.

If you’re ready to put student loans in your rearview mirror, Nelnet Bank student loan refinancing offers low rates and flexible terms to help you start getting ahead.

  • VARIABLE RATES: 1.87% - 6.52% APR See Disclaimer
  • FIXED RATES: 2.30% - 5.96% APR See Disclaimer
  • AUTO DEBIT SAVINGS: We’ll knock .25% off of your interest rate when you enroll in auto debit. See Disclaimer
  • NO ORIGINATION FEES: No application, origination, or prepayment fees on Nelnet Bank loans.
  • HARDSHIP PROTECTION: Hardship forbearance helps protect against unexpected loss of income. See Disclaimer

See How Much You Can Save: Estimate your savings with a student loan refinance from Nelnet Bank.

#4 View More Details

For every loan they fund, they contribute to the education of a child in need

  • Fixed rates: 2.83% - 6.74% APR
  • Variable rates: 1.99% - 6.84% APR
  • Minimum credit: 660
View More Details
Visit CommonBond View Loan Disclosure

CommonBond was founded in 2011 by three MBA graduates from the University of Pennsylvania’s Wharton School who wanted to help their peers escape from high-interest student loan debt. Its original focus was on grad students, but it has since expanded to cover undergrads as well.

Of all the companies we reviewed, CommonBond has some of the best customer service. The company prides itself on being easy to reach by email, phone, or live chat. It offers networking events, expert panels, insider newsletters, and even has a program help borrowers who lose their jobs to find new ones. CommonBond also makes you feel good about choosing to refinance with them by donating money to an education nonprofit for each loan they write.

CommonBond Student Loan Refinance review

  • Unemployment protections - If you lose your job or decide to go back to school, you can delay your payments for up to 24 months.
  • Social promise - For every loan they fund, they also contribute to the education of a child in need.
  • Hybrid loan option - Offerings include a 10-year hybrid loan with fixed interest for the first five years, and variable interest for the final five.
  • Referral bonus - For every friend you refer who refinances their loans with CommonBond, you’ll earn a $200 cash bonus.
  • Qualification - Borrowers must have graduated at least 2 years prior if they want to apply without a co-signer. And borrowers in 6 states – Idaho, Louisiana, Mississippi, Nevada, South Dakota, and Vermont – cannot currently refinance through CommonBond.

Get a personalized review of your refinancing options with CommonBond today.

#5 View More Details

SoFi is the leading student loan refinancing provider. 

  • Fixed rates: 2.49% - 6.94% APR
  • Variable rates: 1.74% - 6.59% APR
  • Minimum credit: 650
View More Details
Visit SoFi View Loan Disclosure

$30 billion+ in refinanced student loans. SoFi has some of the lowest interest rates and, unlike the other lenders we reviewed, there's no maximum on the amount you can finance. Some state restrictions may apply.

  • Serious savings: Save thousands of dollars thanks to flexible terms and low fixed or variable rates.
  • No hidden fees, no catch: No application or origination fees. No pre-payment penalties.
  • Fast, easy, and all online: Simple online application and access to live customer support 7 days a week.
  • Access to member benefits: SoFi members get career coaching, financial advice, and more—all at no cost.
  • 98% of surveyed members would recommend SoFi to a friend

Save thousands on your student loans and pay off your loans sooner. Find your rate.

#6 View More Details

Works with 300+ community lenders for higher approval chances

  • Fixed rates: 2.49% - 7.75% APR
  • Variable rates: 1.90% - 5.25% APR
  • Minimum credit: 660
View More Details
Visit LendKey View Loan Disclosure

Connecting student borrowers to a network of over 300 community lenders with low interest rates. By partnering with these lenders, LendKey is able to give consumers direct access to the best rates available from the most borrower friendly institutions. As the servicer of all loans obtained through its platform, you can rest easy knowing your personal information will be safe and that the best customer service team will be ready to answer your questions from application until your final payment.

LendKey Student Loan Refinance review

  • Lightning fast rate check - 2-minute rate check with no impact on your credit score
  • More lenders, more options - see the best offers from over 300+ community lenders for higher approval chances
  • Life of loan relationship - With LendKey, your personal information will never be sent or passed on to third parties. Their customer service team is with you from the moment you land on their website until you've completely repaid your loan.
  • Unmatched benefits- Community lenders put people over profits and offer unique benefits like cosigner release after 12 on-time payments, interest only repayment options to keep monthly payments low, the largest unemployment protection period in the market, and more.

Get a personalized quote from LendKey now.

#7 View More Details

Best for borrowers who want to customize their repayment schedule to pay off debt fast.

View More Details
Visit Earnest View Loan Disclosure

Using technology, data, and design to build affordable products, Earnest's lending products are built for a new generation seeking to reach life's milestones. The company understands every applicant's unique financial story to offer the lowest possible rates and radically flexible loan options for living life.

  • Commitment-free 2 minute rate check
  • Client Happiness can be reached via in app messaging, email, and phone 
  • No fees for origination, prepayment, or loan disbursement
  • Flexible terms let you pick your exact monthly payment or switch between fixed and variable rates
  • Skip a payment and make it up later
  • Online dashboard is designed to make it easy to apply for and manage your loan

Click here to apply with Earnest and to see how much you can save.

#8 View More Details

11 different loan term options – more flexibility to pay down your loan faster

  • Fixed rates: 2.99% - 4.89% APR
  • Variable rates: 2.94% - 4.79% APR
  • Minimum credit: 680
View More Details
Visit CollegeAve View Loan Disclosure

College Ave Student Loans offers major help and minor stress. We’ll help guide you through the process to find the right loan term and interest rate for you and the family budget.

  • Fast rate check: Get your new rate in 60 seconds 
  • Instant credit decision
  • Super flexible terms: 11 loan terms available from 5 to 15 years
  • No fees to apply

Click here to see more College Ave offerings and to start saving today! 

I reduced my student loan payment by $152 per month, by refinancing thru Nitro:

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