Student loan refinancing 101

Student loan debt can be overwhelming, but don’t worry—we’ve got you covered. Get the basics on student loan refinancing and how you can pay off your debt.

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What types of student loans do you have?

It’s not always easy to remember who lent you money for school. Was it the federal government? A private lender? Both? Fortunately, there are ways to find out.

Federal

More than 90% of student loans are federal. You can find out about your federal loans at StudentAid.gov.

Federal

Types of federal loans:

  •     Direct subsidized 

  •     Direct unsubsidized

  •     Direct PLUS 

  •     Direct Consolidation

Private

About 8% of student loans are private. You can visit AnnualCreditReport.com for a free credit report that will list your lenders along with other details.

Private

Types of private lenders:

  • Banks

  • Credit unions

  • State-based or state-affiliated organizations

  • Peer-to-peer websites

  • Other groups

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How to refinance your student loans 101

1. Take stock of your student debt

2. Identify your goals

3. Know the difference between federal and private loans

4. Shop around

5. Choose your lender

6. Gather your paperwork

1. Take stock of your student debt

Consider things like how much you owe, your types of loans (federal, private or both), interest rates and credit score. Make sure you are up to date on your payments.

2. Identify your goals

3. Know the difference between federal and private loans

4. Shop around

5. Choose your lender

6. Gather your paperwork

1. Take stock of your student debt

2. Identify your goals

Understand your bigger financial picture. What other debt do you have and what are your goals? Are you saving for a new car, planning for a family, or hoping to buy a house? Refinancing might help you save money—in the short or long term—and meet your financial objectives.

 

3. Know the difference between federal and private loans

4. Shop around

5. Choose your lender

6. Gather your paperwork

1. Take stock of your student debt

2. Identify your goals

3. Know the difference between federal and private loans

You can refinance federal loans through a private lender if you qualify and potentially save money. But you’ll lose certain protections, such as loan forgiveness†. A private lender will also allow you to combine private and federal loans. The government only allows the consolidation of federal loans.

 

4. Shop around

5. Choose your lender

6. Gather your paperwork

1. Take stock of your student debt

2. Identify your goals

3. Know the difference between federal and private loans

4. Shop around

Compare lenders and get a rate quote. When you have a quote in hand, you’ll be in a better position to evaluate your offers.

5. Choose your lender

6. Gather your paperwork

1. Take stock of your student debt

2. Identify your goals

3. Know the difference between federal and private loans

4. Shop around

5. Choose your lender

Once you’ve reviewed your options, narrow down your top candidates. Select the lender that offers you the best loan deal to meet your goals.


6. Gather your paperwork

1. Take stock of your student debt

2. Identify your goals

3. Know the difference between federal and private loans

4. Shop around

5. Choose your lender

6. Gather your paperwork

Make sure you have your Social Security number, proof of address, graduation and employment, and payoff statements from the loan(s) you want to refinance. Your lender may also ask for documentation of your other debt. Then it’s time to submit your application.

 

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Quick guide to student loan refinance rates: fixed vs. variable

Fixed vs. Variable

Fixed
Variable

Fixed vs. Variable

Fixed vs. Variable

Fixed
Variable

Fixed

  • Rate stays the same over life of the loan
  • Monthly payment stays constant 
  • Easy to calculate total amount you’ll pay back
  • Can be smart when interest rates are rising
  • May miss savings if interest rates drop
  • Generally higher than starting rate of variable-rate loans

 Did you know?

All federal loans are fixed rate. Private can be fixed or variable.

Fixed vs. Variable

Fixed vs. Variable

Fixed
Variable
Variable

Variable

  • Rate changes over life of the loan
  • Unpredictable monthly payments
  • Total amount due can change
  • Starting rates are often lower than fixed-rate loans
  • Can save money if interest rates drop
  • Potential overall savings if paying off loan in a short time

 Did you know?

All federal loans are fixed rate. Private can be fixed or variable.

Fixed vs. Variable

Fixed

  • Rate stays the same over life of the loan
  • Monthly payment stays constant 
  • Easy to calculate total amount you’ll pay back
  • Can be smart when interest rates are rising
  • May miss savings if interest rates drop
  • Generally higher than starting rate of variable-rate loans

 Did you know?

All federal loans are fixed rate. Private can be fixed or variable.

Variable

  • Rate changes over life of the loan
  • Unpredictable monthly payments
  • Total amount due can change
  • Starting rates are often lower than fixed-rate loans
  • Can save money if interest rates drop
  • Potential overall savings if paying off loan in a short time

 Did you know?

All federal loans are fixed rate. Private can be fixed or variable.

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Refinancing checklist

There’s a lot to think about when refinancing student loans. Make sure you have your bases covered. Download the checklist so you can refer back to it.

List your financial goals so you know why you’re refinancing.

Write down what you owe on your loan(s).

Know your interest rate so you can compare it to the refinancing offers.

Understand the type of loans you have—federal, private, or both.

Look at your budget and other debt so you have a clear picture of how much you can afford in a new monthly payment.

Check your credit report and score—the higher your score, the better your chance is of getting a good rate.

Compare lenders.

Narrow your choices to three to five.

Get a rate quote.

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Did you know?

All federal loans are fixed rate. Private can be fixed or variable.

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Additional resources

Is Student Loan Refinancing Right for Me?

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Is Student Loan Refinancing Right for Me?

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Should I Refinance My Private or Federal Student Loans? If so, how?

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Student Loan Frequently Asked Questions

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Ready to refinance?

Take charge of your student debt. Get your rate quote in 2 minutes†.