How to Refinance Student Loans: Step-by-Step Guide & Best Lenders

Updated on July 10, 2026

It’s relatively straightforward to refinance student loans: find a bank, online lender, or credit union that offers refinancing, apply, and (hopefully) get approved.Pre-qualifying with several lenders improves your chances of getting approved with a lower rate.Once approved, you could pay less over the life of the loan, reduce your monthly payments, or both.You can refinance either federal or private student loans. However, refinancing federal loans disqualifies you from federal income-driven repayment and student loan forgiveness programs.

Here are the Steps to Refinance Student Loans:

1. Pre-qualify with Multiple Lenders

Pre-qualifying lets you know whether you qualify for refinance with a lender, and informs you of the expected rates and terms they are willing to offer before you make a full application. It involves sharing your basic financial information (such as income and expenses) and triggers a “soft” credit check for lenders to review your creditworthiness.

Because soft credit checks don’t affect your credit, pre-qualifying is a helpful tool to compare your odds with different lenders without the negative credit impact brought about by a hard credit check during the full application process.

2. Choose a Lender

After you’ve examined your options, it’s time to make a choice. Select the lender that works best for your goals, considering factors like:

Lowest rates
Best repayment terms and protections
General eligibility (e.g., lender restrictions by state, minimum loan amounts, or lack of cosigner options)
Least concerning customer reviews

If your priority is to pay less over the life of the new loan, choose the lender that offers the lowest interest rate. If paying less each month is your main concern, then a lender that matches that need might be better. However, lower monthly payments can also mean an extended repayment period, increasing total costs over time.

3. Fill Out Your Loan Application

Make sure you fill out the refinance application form correctly to avoid resubmitting your information or delaying approval. Here’s what you can expect when filling out a student loan refinance application:

Provide identification (driver’s license, social security card, or passport)
Upload loan statements
Upload proof of income, such as pay stubs
Consent to a hard credit check

If applying with a cosigner, you’ll also need to provide the cosigner’s information.

If you miss anything on the application, don’t worry—your lender will contact you to help resolve it.

4. Continue Paying Off Loans Until Refinancing Is Fully Approved

Don’t accrue late fees or credit dings at the last minute by skipping on-time payments of your current loans. You need to keep making monthly student loan payments until the refinancing is fully approved.

While the application may take just minutes, the approval process can take several weeks—sometimes 30 to 60 days—before the lender pays off your existing loans. Don’t ignore your loan repayment plan until then!

What are the Requirements to Refinance Student Loans?

To qualify for student loan refinancing, you typically need:

Strong credit score: Minimum 650, preferably above 680
Steady income: Typically more than $30,000/year and a solid debt-to-income ratio (DTI)

If you fall short of the requirements, you may be able to qualify with a cosigner. Even if you already meet the criteria, adding a cosigner could help you secure a better interest rate.

You can refinance student loans for up to 20 years with most lenders. Many banks, credit unions, and online lenders offer 5, 7, 10, 15, and 20-year terms.

Learn More: Here’s the credit score you need to refinance student loans

FAQ

What is the difference between refinancing and consolidating student loans?

Refinancing student loans means borrowing a new loan to pay off your current loan(s). This is almost always done to secure a lower interest rate and save money in the long run. Refinancing multiple loans with one private loan is similar to
consolidation,
but you’ll lose federal protections if you refinance federal loans.
Consolidating student loans means combining all your federal loans into a single federal loan with one monthly payment. Your interest rate does not decrease, but you only have to manage one payment. Your loan term may reset, which can lower your monthly payment but increase the total amount you pay over time.

Should you refinance or consolidate your student loans?

Refinancing can be the better option if:
- You want to get a lower interest rate or lower your monthly payments.
- You have an excellent credit score (increased chance of qualifying and getting lower interest rates).
Consolidation can be the better option if:
- You just want to simplify loan management.
- You want to keep or take advantage of federal programs such as IDR and PSLF, or federal protections like
  forbearance and deferment,
  which temporarily pause your payments under specific circumstances.

When is the right time to refinance student loans?

The right time to refinance student loans is when you can get a lower interest rate than the one you currently have.

Many lenders allow you to refinance immediately after graduation. However, most students wait until after the 6-month deferment grace period—when no payments are required—before considering student loan refinancing.

Can I refinance my loans with bad credit?

In most cases, you cannot refinance your student loans with bad credit (a score under 650) unless:

You get a cosigner with great credit and a steady income, or
You improve your credit score.

Will my credit score drop if I refinance student loans?

Yes, your credit score may drop temporarily if you refinance student loans.
Student loan refinancing has a minimal impact on your creditworthiness.

Two things can hurt your credit report:

Hard inquiry or inquiries (credit checks)
The average age of loans will decrease as you replace an older loan with a new one

Should I choose a fixed or variable rate loan?

You should choose whichever interest rate is best for you in the long term. If you have the capacity and plan to pay off your debt quickly (within 3 years), consider variable rate loans. While variable rates can start lower, they can also rise periodically—potentially increasing several times over the life of the loan.

If you select a variable rate loan and later find the higher payments unmanageable as rates rise, you can refinance again to a fixed rate. There is no cost to refinance your student loans, and you can do so as many times as needed.