Why Refinancing Student Loans Matters
Federal student loan rates for recent graduates run 5.5–8.0%, and private rates can be higher. Refinancing replaces one or more existing loans with a new private loan at a lower rate, potentially saving thousands over the life of the loan. The trade-off: refinancing federal loans into private ones means giving up protections like income-driven repayment and forgiveness programs.
Top Lenders to Compare
Earnest stands out for flexibility, borrowers choose custom repayment terms down to the month rather than standard 5, 10, or 15-year options. Rates start around 4.5% for the most qualified borrowers, with no origination fees.
SoFi offers competitive rates with unemployment protection, if you lose your job, payments can pause while you search. They also provide career coaching and financial planning at no extra cost.
Splash Financial acts as a marketplace, letting borrowers compare offers from multiple lenders in one application, often surfacing rates from smaller lenders that don't advertise widely.
Running Your Scenario
The Student Loan Calculator on DebtCalc quantifies refinancing savings. Enter your current balance, rate, and remaining term, then compare against a refinanced offer. A $35,000 balance at 7% refinanced to 4.5% over 10 years saves roughly $5,000 in total interest.
Who Should and Shouldn't Refinance
Strong fit: stable income, good credit (680+), private loans or federal loans you won't use forgiveness on.
Poor fit: anyone pursuing Public Service Loan Forgiveness, currently on an IDR plan with forgiveness timeline, or in unstable employment.
Check rates with a soft credit pull before committing. Most lenders show your offer without affecting your score.