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With the three-year payment and interest pause on federal student loans officially coming to an end in the fall of 2023, many borrowers are left wondering whether now is a good time to refinance those loans they're going to start having to pay soon.
On Sep. 1, 2023, federal student loan interest will pick back up again with payments on those loans restarting in October. As student loans soon become due again each month — coupled with the rising-interest-rate environment we still find ourselves in — now is an interesting time to think about refinancing.
Refinancing basically entails trading in your current student loan(s) for a completely new loan through a private lender. By refinancing, you have the opportunity to combine your multiple monthly student loan payments into one, while also ideally scoring a lower interest rate and a new loan term that works best for your financial situation.
Here's what you need to know about refinancing student loans in today's market.
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If you're a federal student loan borrower
Though coming to an end soon, federal student loan borrowers are still hanging onto the suspension of federal student loan payments and interest that has been in effect for the last three years. As long as this suspension is still happening, it doesn't make sense to refinance if you have federal student loans since you're already paying zero interest during this time. It doesn't get any better than that.
September (when interest starts accruing again), however, is right around the corner. When student loan payments eventually resume again, federal student loan borrowers should still proceed with caution before choosing to refinance. Refinancing your federal student loans through a private lender (since you cannot refinance through the government) causes you to lose access to any government protections that you once had.
Such protections include forbearance and deferment options, income-driven repayment plans and student loan forgiveness programs. Even though the Biden administration's student loan forgiveness plan was struck down, it's not to say there can't be some form of forgiveness in the future.
There's also the new income-driven repayment plan, the Saving on a Valuable Education (SAVE) plan, that aims to benefit federal student loan borrowers by cutting monthly payments with higher income thresholds, moving forgiveness closer for those with small student loan balances and cutting the percentage of discretionary income used for student loan repayment calculations. If you refinance your federal loans to private, you'd miss out on this income-driven repayment plan amongst others.
And one last point on this for federal borrowers: The main reason you refinance is to score a lower interest rate, yet in this high-rate environment it's unlikely you'll get a lower rate than the fixed rate you've had on your federal loans all this time.
If you're a private student loan borrower
Though private lenders set their own rates, those rates are influenced by the Federal Reserve's prime rate. Our typical advice for private student loan borrowers would be to refinance when in a low-interest-rate environment. This way, if you're currently paying a high interest rate on your private student loan(s), you can try your hand at seeing how much lower of an interest rate you can score when refinancing is cheap.
But in today's environment, interest rates are high and still rising. In fact, if we look at their record lows from late 2021, the refinance rates on both the 10-year fixed-rate loans and on the 5-year variable-rate loans have jumped significantly since then. As a result, this means that choosing to refinance as a private student loan borrower really boils down to what your current interest rate is. If you shop around and see student loan refinancing lenders offering rates that are lower than what you pay, see what you qualify for through its prequalification tools. For those whose credit score is in better shape than when they last applied for a private student loan, we suggest shopping around to see what your improved credit score could get you.
CNBC Select analyzed and compared private student loan funding from national banks, credit unions and online lenders to rank your best options for borrowers. We rated our top student loan refinance companies and all offer competitive refinancing rates:
Best overall
- 0.25% autopay interest rate discount
- 0.125% SoFi Plus discount
- No origination fees, no late fees and no insufficient fund fees
- Private loans, which means you lose federal loan benefits
- $5,000 minimum loan amount
Fixed rates range from 3.99% APR to 9.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 9.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 5/6/26 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. You may pay more interest over the life of the loan if you refinance with an extended term. Autopay Discount: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly payments as outlined in your loan agreement by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. When the autopay interest rate deduction is added or removed, the next time the loan is re-amortized (quarterly for fixed rate loans; monthly for variable rate loans),the principal balance of your loan will be spread over the remaining loan term, and your monthly payment amount will change. This benefit is suspended during periods of deferment, grace period, or forbearance. Autopay is not required to receive a loan from SoFi. Member Rate Discount: To be eligible for an additional 0.125% interest rate reduction on a Student Loan Refinancing, you must, within 31 days of loan funding, either (1) be a SoFi Plus subscriber, (2) receive an Eligible Direct Deposit into a SoFi Checking or Savings account, or (3) receive at least $5,000 in Qualifying Deposits into a SoFi Checking or Savings account. You must continue to meet at least one of the above eligibility criteria every 31 days to maintain the discount. See the SoFi Plus terms for details on SoFi Plus subscription. For more details on Eligible Direct Deposit or Qualifying Deposits, please see https://www.sofi.com/legal/banking-rate-sheet. Once you become eligible during the initial period, the discount will be removed or reinstated depending on whether the criteria have been met. Each time your loan is re-amortized, your monthly payment amount will change based upon the interest rate that was in place. SoFi reserves the right to modify or terminate this offer at any time for unenrolled participants. You are not required to meet these criteria to be approved for a loan. SoFi Plus Discount: To be eligible to receive an additional (0.125%) interest rate reduction on your Student Loan Refinancing (your "Loan") for enrolling in SoFi Plus, you must enroll in SoFi Plus within 30 days of Loan funding, either by receiving an Eligible Direct Deposit to your SoFi Checking and Savings account, or by paying the SoFi Plus Subscription Fee. Once eligible, you will receive this discount during periods in which you have received Eligible Direct Deposit to your SoFi Checking and Savings Account, or during periods in which SoFi successfully receives payment of the SoFi Plus Subscription Fee. This discount lowers your interest rate but does not change the amount of your regular monthly payment. This discount will be removed during periods in which SoFi determines you have turned off Eligible Direct Deposit to your Checking and Savings account or in which you have not paid the SoFi Plus Subscription Fee. SoFi reserves the right to change or terminate this interest rate reduction offer for unenrolled participants at any time without notice. You are not required to enroll in Eligible Direct Deposit or to pay the SoFi Plus Subscription Fee to be eligible for Loan approval. See what qualifies as an Eligible Direct Deposit here: www.sofi.com/terms-of-use/#slr-discount
Eligible Direct Deposit means regularly recurring deposit of regular income to an Automated Clearing House ("ACH") Network during a 30-Day Evaluation Period (as defined below). Although we do our best to recognize all Eligible Direct Deposits, a small number of employers, payroll providers, benefits providers, or government agencies do not generate payments that are detectable by our system. So qualifying direct deposits are those where the student loan refinance discount rate is applied automatically for each month where you have an Eligible Direct Deposit of at least $1,000 per 30-day Evaluation Period. Eligible Direct Deposit does not include transfers between accounts you own, refunds, rebates, reimbursements, stimulus payments, merchant refunds, or payments from person-to-person payment services (such as Venmo). To qualify for the 0.25% interest rate reduction, the direct deposit must be recurring and paid directly into a SoFi Checking or Savings account. For the avoidance of doubt, deposits made via check, cash, or mobile check deposit are not eligible. Direct Deposit eligibility is determined by SoFi's sole discretion. The 30-Day Evaluation Period refers to the period starting on the "Start Date" and ending on the "End Date" set forth on the App Details page of your account, which comprises a period of 30 calendar days (the "30-Day Evaluation Period"). You can access the APV Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking → Checking → APV or (ii) Banking → Checking → APV Details. If you do not qualify for the discount during the initial 30-Day Evaluation Period, your loan will not be eligible for a discount unless you re-qualify in a later 30-Day Evaluation Period. If you qualify during the 30-Day Evaluation Period, the discount will be applied on a going-forward basis only. SoFi Bank determines eligibility. If you have a joint account, each account holder receives Eligible Direct Deposits into your SoFi Checking and Savings account, then you will be eligible for all SoFi Plus benefits, including on accounts you hold in your own name. Federal Loan Disclosure: Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELiIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligiblity. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
Best for fair credit score
Earnest
Eligible borrowers
Undergraduate and graduate students, parents, half-time students, international and DACA students
Loan amounts
$1,000 minimum (or up to state) for new loans, $5,000 minimum for refinance; maximum up to cost of attendance for new loans, $550,000 for refinance loans
Loan terms
Range from 5 to 15 years
Loan types
Variable and fixed
Borrower protections
9-month grace period
Co-signer required?
No
Offer student loan refinancing?
Yes - click here for details
Terms apply.
Actual rate will vary based on your financial profile. Fixed annual percentage rates (APR) range from 4.60% APR to 10.24% APR (4.35% - 9.99% with .25% auto pay discount). Variable annual percentage rates (APR) range from 6.13% APR to 10.24% APR (5.88% - 9.99% with .25% auto pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and require selection of our shortest term offered (5 years) and enrollment in our .25% auto pay discount from a checking or savings account. Enrolling in autopay is not required as a condition for approval.
Best for having a co-signer
Citizens™ Student Loans
APR
3.24% to 14.99% APR with autopay discount (Undergraduate New Loan). Other rates and loan types are available. Visit Citizen's website for full details.
Loan types
Undergraduate, graduate, parent loans, Master's degrees, MBAs, law school, medical school and dental school loans.
Loan amounts
Minimum is $1,000; Maximum amount depends on the type of degree (graduate or undergrad, MBA, Law and Healthcare)
Loan terms
5, 10, 15 years
Borrower protections
Up to 12 months of forbearance
Co-signer required?
No
Offer student loan refinancing?
Yes - click here for details
Terms apply.
Best for parent loan refinancing
ELFI
Cost
No origination fees to refinance
Eligible loans
Federal, private, graduate and undergraduate loans, Parent PLUS loans
Loan types
Variable and fixed
Variable rates (APR)
Student Loan Refinancing from 4.74%; Private Student Loans from 4.88%
Fixed rates (APR)
Student Loan Refinancing from 4.29%; Private Student Loans from 9.44%
Loan terms
From 5 to 20 years for student loan refinancing; 5, 7 or 10 years for parent loan refinancing
Loan amounts
From $10,000
Minimum credit score
N/A
Minimum income
N/A
Allow for a co-signer
Yes
Terms apply.
Best for medical school loan refinancing
Should you refinance your student loans?
The decision of whether to refinance your student loans is a big one to make. The main reason to refinance is so that you'll save money. Many of the student loan lenders advertise big savings on their websites. For example, ELFI customers who refinanced their student loans between Jan. 3, 2023, and Mar. 1, 2023, saved an average $278 per month — and $20,774 in total average savings in interest costs over the life of the loan, their website claims. That's a pretty significant saving.
Before applying for refinancing, shop around for the best rates to see what you prequalify for. You can also use loan marketplaces like Credible to compare lenders. You'll also want to make sure you're in good financial standing before you start applying for a refinance. To get the best rates, you'll want to meet the following requirements:
- Good credit score
- Stable income
- Currently paying a high interest rate — anything at or above 6% — where you would be likely to save money through refinancing
You should also ask yourself the following questions:
- Would you like to to pay off your loans faster if you could shorten your repayment term?
- Would you like to make your loan payments more manageable if you could extend your repayment term?
Federal student loan borrowers looking to refinance should be aware that doing so with a private lender means they'll lose any protections they previously had with their federal loans, like income-driven repayment, student loan forgiveness and any current or future relief measures. Some private lenders will offer their own kinds of payment protections, such as deferment or forbearance, so make sure you know your options before taking out a refinanced loan.
Compare offers to find the best loan
FAQs
What is student loan refinancing?
When you refinance your student loans, you trade in your current loan(s) for one new loan through a private lender.
If you have more than one student loan, once you refinance, your payments are grouped together so you make only one monthly payment to one lender, instead of owing multiple monthly payments to various lenders. On top of getting a lower interest rate and streamlined payments, refinancing lets you alter the payment plan on your refinanced student loan. Terms vary by lender, but borrowers can choose how aggressive they want to be in their debt payoff, whether it's five, 10 or 20 years.
How is my student loan refinancing rate determined?
The interest rates lenders advertise for student loan refinancing may not be the rate you receive. Lenders determine your APR based on a handful of factors, including your credit score, your income, your debt-to-income (DTI) ratio, your savings, whether you choose a variable or fixed rate and the length of your loan's term.
How does refinancing affect my credit?
When you refinance your student loan, lenders will pull your report to determine if you're a risky borrower, which is considered a hard inquiry. This may lower your credit score by five or so points, but it's likely to go back up as you continue to make on-time monthly payments on your new refinanced loan.
Many lenders as well as loan marketplaces offer prequalification tools where you can quickly input your personal information and see rate quotes from lenders without actually applying and affecting your credit. You'll be able to get an idea of your interest rate, repayment term and any fees. Choose the lender that offers you an interest rate considerably lower than the one you currently pay.
Can you refinance my student loans multiple times?
There's no limit on how many times you can refinance your student loan. In fact, one CNBC Select reporter refinanced their student loans six times and was able to save thousands in interest this way. The process to refinance student loans is quite simple and there usually aren't any costs or penalties associated with doing so.
Is now a good time to refinance student loans?
Generally, student loan borrowers who are paying a higher interest rate on their federal or private student loans than they could score otherwise may want to consider refinancing. But federal student loan borrowers specifically should keep in mind the government protections they lose when they go private.
Private student loan borrowers should also consider if their credit score has improved since they last took out their private loan; if so, they have a better chance of scoring a better interest rate.
Will refinanced student loans be forgiven?
If you refinance your federal student loans, they will be taken on by a new private lender. Once you have private student loans, you're not eligible for federal protections and benefits, including student loan forgiveness and any suspension on loan repayment.
Bottom line
Whether or not you should refinance your student loans largely depends on if you're a federal or private borrower. Federal student loan borrowers should weigh the government protections they'd lose, while private student loan borrowers should size up their current interest rate with what the market is offering to see if it's a worthwhile jump.
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Fixed rates range from 3.99% APR to 9.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Variable rates range from 5.74% APR to 9.99% APR with 0.25% autopay discount and 0.125% SoFi Plus discount. Unless required to be lower to comply with applicable law, Variable Interest rates will never exceed 13.95% (the maximum rate for these loans). SoFi rate ranges are current as of 5/6/26 and are subject to change at any time. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. You may pay more interest over the life of the loan if you refinance with an extended term.
