How to refinance student loans, step by step

Start with an inventory, not a lender. For every loan, write down the servicer, the balance, the interest rate, and whether the loan is federal or private.

Your federal loans are all in one place: sign in to your Federal Student Aid account and they are listed with their balances and rates. Private loans are not collected anywhere official, but they appear on your credit reports, which you can pull for free at annualcreditreport.com.

Now the decision that makes this step worth doing: you do not have to refinance all of them. A refinance is a loan you apply for, and you choose what it pays off.

Private loans: the straightforward case

A private student loan carries no federal benefits, so there is nothing to give up. Refinancing one is a plain swap — a private loan for a private loan — and the only question is whether the new rate and term beat the old ones. If every loan you hold is private, you can treat the rest of this page as a shopping exercise and move on.

Federal loans: the one-way door

Federal loans are different, because the protections are attached to the loan and not to you. The CFPB lists what you lose when a federal loan becomes a private one:

• Income-driven repayment, deferment, forbearance and cancellation under the federal program. Some private lenders offer their own forbearance, but it is their policy rather than your right.
• Public Service Loan Forgiveness and Teacher Loan Forgiveness. Refinance and you are no longer eligible, however many qualifying payments you had made.
• Discharge on death or permanent disability. Federal loans carry it. In the CFPB's words, many but not all private lenders offer their own version.
• The Servicemembers Civil Relief Act's 6% interest cap on loans taken out before active-duty service began. Refinancing during service forfeits it.
• A fixed rate, if you choose a variable one. Most federal loans are fixed. A variable rate can rise above the fixed rate you left.

There is no way back. A federal loan paid off by a private lender cannot be made federal again, so this is the one step in the process that is worth a night's sleep rather than an afternoon's.

One tax point before you move on

Interest on a qualified student loan is deductible up to $2,500 a year, as an adjustment to income rather than an itemized deduction, and it phases out above an income limit — IRS Topic 456 has the current thresholds. A refinance of student debt alone keeps that. Folding other debt into the same loan can end it, which the CFPB flags as a thing to check before you sign.

Your rate is priced off your credit history, so look at it first. An error found now is a correction; an error found at underwriting is a worse rate.

Checking your own file costs nothing and does nothing to your score. The CFPB puts your own request in the soft-inquiry category, which does not affect your credit scores, and the nationwide credit reporting companies have granted weekly free access since the pandemic.

Read the reports for three things: an account that is not yours, a late payment you did not make, and a balance that has already been paid. Dispute anything wrong before you start shopping.

As for the score itself, lenders publish minimums rather than guarantees. The lowest minimum credit score among the lenders ranked on our student loan refinancing page is currently ⚠ Minimum credit score missing — top 3 student-loan-refinance. Clearing a minimum gets you an offer; it does not get you the headline rate, which goes to the strongest files.

Prequalifying means asking a lender what rate it would give you, before you apply for anything. It is the cheapest step in the process and the one most people skip.

It is cheap because of how credit inquiries work. "If you're simply asking about rates, they can't pull your credit report," the CFPB says, and a review of your file that is not an application is a soft inquiry — it leaves no mark a future lender can see and no dent in your score. The hard inquiry arrives in step 6, when you apply.

So the cost of asking five lenders is an hour of your time. Ask five.

Enter the same balance and the same term in every form. A 10-year quote and a 15-year quote are not comparable, and the lender with the lowest number is often just the one you asked for the longest term.

Keep three things from each answer:

• The APR, not the interest rate and not the monthly payment.
• Whether the rate is fixed or variable. A variable rate quoted today is not a rate you have been given.
• The term the quote assumes. Write it down beside the APR or the comparison falls apart.

A quote is not an offer. It is priced on what you typed and what a soft pull showed, and it can move once a lender sees the full file.

Applying is the point where this becomes a hard inquiry on your credit report. One application is a small, temporary effect. This is also why step 3 exists: you shop with soft pulls and apply once.

Expect to supply proof of identity, proof of income, and a payoff statement or recent statement for every loan the new lender is taking on. Have them ready; a missing document is the usual reason an application sits still.

The two dates the law puts on your side

A private student loan comes with two timing rights most borrowers never hear about. Regulation Z covers a loan taken out to consolidate pre-existing private education loans — the official commentary says so in as many words — and for a covered loan:

• You have 30 calendar days to accept. From the day you receive the approval disclosure, you have 30 days to say yes, and the lender may not change the rate or the terms during that window. There is no need to decide on the phone.
• You have three business days to cancel. After you accept, the final disclosure starts a cancellation period that runs to midnight of the third business day. You may cancel without penalty, and no money is disbursed until it expires.

Both dates have to be printed on the disclosures, and the cancellation notice has to be more conspicuous than almost everything else on the page. If a disclosure arrives by mail, you are treated as having received it three business days after it was sent, so the clock is kinder than the postmark suggests.

Find those two dates on the paperwork and write them down. They are the only deadlines in this process that are yours rather than the lender's.

One thing to expect at the end: a lender may pull your credit again just before closing. The CFPB lists that among the ordinary reasons a lender runs a check, so do not open a new card or finance a car between applying and signing.

The refinance is not finished when you sign. Because no funds move until the three-day cancellation window closes, there is a gap of days — sometimes weeks — between signing and the old loans being paid off. Your old payment is still due in that gap.

So, in order:

• Keep paying the old loans, autopay included. A payment you did not need to make comes back as a refund. A payment you skipped becomes a late mark.
• Watch for a zero balance on each old loan, in writing. A payoff figure is quoted to a date and interest accrues after it, so a transfer that was right on Monday can leave a few dollars behind.
• Pay off anything left over. A small remainder on a loan you believe is closed is the most common way a refinance produces a delinquency.
• Only then cancel the old autopay, and set up the new one. Many lenders discount the rate for autopay; check whether yours requires it to keep the rate you were quoted.
• Keep the final statements. They are your proof the old loans were satisfied, and they are easier to save now than to request in two years.

Can I refinance federal student loans?

Yes, and that is the decision this page spends its first step on. A private lender will refinance federal loans, and doing so converts them permanently into a private loan. Federal consolidation — combining federal loans into one federal Direct Consolidation Loan — is a different thing that keeps the federal protections, and it does not lower your rate: the new rate is the weighted average of the old ones, rounded up.

Can I refinance only my private loans and leave the federal ones alone?

Yes. You choose which loans the new loan pays off, and leaving the federal loans where they are is both allowed and, for most people with a mix, the sensible version of this.

Does refinancing hurt my credit score?

Prequalifying does not — that is a soft inquiry. Applying is a hard inquiry, which has a small, temporary effect. The larger and longer effect is the ordinary one: a new account with no payment history replaces older accounts that had one.

How many times can I refinance?

There is no limit. Each refinance is simply a new loan application, with a new hard inquiry. If rates fall or your credit improves, refinancing again is open to you — which is also the argument against taking a bad term today in the hope of fixing it later, since nothing guarantees the second offer.

Can I undo a refinance?

You can cancel within the three-business-day window in step 6. After that, no. A federal loan that has been paid off by a private lender cannot be returned to the federal system.

Is a variable rate worth it?

It is worth it when you will clear the balance quickly, and it is a bet otherwise. A variable rate starts lower, moves with an index, and the CFPB's warning is the right one to hold: it can rise above the fixed rate you gave up, and your payment rises with it.

The process here is the one lenders and servicers actually run, with the steps in the order you meet them. Where this page states a right or a protection, it cites the agency or the regulation that creates it rather than another website's summary — the sources are listed at the foot of the page.

The rates and credit-score minimums quoted above are not typed into this article. They are read from our student loan refinancing data when the page loads, so a figure here is the figure the lender publishes today. We take those from each lender's own disclosure, and a lender who does not publish a figure has an empty cell rather than an estimate.

This is an explanation of a process, not financial advice, and it cannot know your position. The step worth taking slowly is the first one: whether any part of what you are refinancing is federal, and whether you are willing to give those protections up for good.