Refinance student loans

How to Refinance Student Loans, Step by Step 

how to refinance student loans

This post may contain affiliate links. You can read my full affiliate disclosure here.

Refinancing student loans can help you save money on interest and restructure your debt in a more manageable way. In this guide, we’re going to take a closer look at the refinancing process itself. Read on to learn exactly how to refinance student loans in six easy steps.

1. Make sure refinancing is right for you

Before applying to refinance student loans, make sure you’ve familiarized yourself with the pros and cons.

Refinancing can have awesome perks, like lowering your interest rate and adjusting your monthly payment.

But it’s not a good idea to refinance federal student loans if you’re relying on federal plans or benefits, since refinancing turns federal loans into a private one.

What’s more, you need to have strong credit and a steady income to qualify for refinancing — or apply with a cosigner who does.

As long as you’ve learned about the refinancing process, your next step is choosing which of your student loans to refinance.

2. Cherry-pick the loans that would benefit from refinancing

According to Experian, the average student loan borrower leaves school with 3.7 loans. If you’ve got multiple loans, it’s important to figure out which ones would benefit from refinancing — and which ones wouldn’t.

If you’ve already got a low interest rate on one of your loans, for instance, you might not benefit much from refinancing. I had one credit union student loan that already had a rate around 3.0%, so I just left it alone.

But my other loan had a rate near 6%, so refinancing helped me save a bunch of interest. Along similar lines, you might choose not to refinance federal student loans to retain access to federal programs, such as income-driven repayment or Teacher Loan Forgiveness.

On the other hand, you might choose to refinance all your student loans at once. This can simplify repayment, as it involves combining multiple loans into one new one. Instead of tracking lots of due dates and payments, you’ll only have to deal with one.

Take some time to write out the details of your loans and figure out whether one, some, or all could benefit from refinancing.

3. Check your rates with multiple lenders

Your next step is to check your rates with lenders. This process is really easy, since a lot of lenders let you check your rates instantly online with no impact on your credit score.

Let’s look at an example from LendKey, which shows you offer from credit unions and community banks.

First, click on “Apply Now.”

how to refinance student loans

Then, enter a few basic pieces of information, such as,

  • Name
  • Address
  • Education info (degree type and school)
  • Student loan amount
  • Income
  • Monthly housing payment
how to refinance student loans

After you submit this form, LendKey will show you student loan refinancing offers. If you see one you like, you can move forward with an application.

Note that this instant rate check is just a pre-qualification; you’re not guaranteed to get the same offers. But it gives you a good sense of whether you’ll qualify and what rates you could get.

It’s a good idea to check your rates with a few different lenders to find the lowest one. And don’t forget to ask if the lender offers any additional protections, such as forbearance (the option to pause payments temporarily) if you lost your job in the future.

4. Pick your rate type and terms

Once you find the best offer, it’s time to figure out what rate types and terms you’d like.

You can typically choose between a fixed rate — which stays the same over the life of your loan — and a variable rate — which usually starts lower but could rise over time.

If you plan to pay off your loan fast, a variable rate might save you money. But if you’re going with a longer term, it could be more of a risk.

Along with choosing your rate type, you’ll get to select your terms, typically 5, 7, 10, 15, or 20 years.

Make sure to use a “student loan calculator” so you can see exactly what your monthly payments will be and how much interest you’ll pay over the life of your loan.

If you’re motivated to pay off your student loan fast, opt for a shorter term. If you need some relief, go with a longer term and lower monthly payments.

And remember, you can always make extra payments to get out of debt faster without any fees or penalties.

5. Submit a full application

Once you’ve compared your offers and selected your terms, you can submit a full application.

Most applications ask for the following:

  • Personal information — name, address, phone number, etc.
  • Social Security number or government ID number
  • Valid ID, such as a driver’s license or passport
  • Student loan statements
  • Proof of income, such as pay stubs or a job offer letter

If you apply with a cosigner, you’ll have to provide their information, too. Once you submit a full application, the lender will run a hard credit check, which could impact your score slightly.

This is the same process as when any lender or credit card company checks your credit before approving you for a loan or credit card.

6. Say goodbye to your old student loan(s)

Although the process can vary from lender to lender, it usually takes about two to three weeks to get your refinanced student loan up and running.

Don’t stop paying your old student loans in the meantime, since you don’t want to accidentally miss a payment.

Make sure to get the green light from your lender before you close your old accounts and start focusing on your new one.

Once your lender gives you the thumbs up, you can say goodbye to your old student loans and start paying back your new one — which hopefully has a lower interest rate and better terms!

And sign up for autopay if you can, since doing so will snag you an automatic 0.25% discount on your rate.

What’s next?

Now you know how to refinance student loans, but you might still have lingering questions. Head to our Student Loan Refinancing FAQ to get answers to all your burning questions.

Are you ready to get student debt out of your life once and for all? This guide has 11 smart strategies for paying off student loans ahead of schedule.


Want better rates? Here are the best banks to refinance student loans:

Variable rates start at...Fixed rates start at...Repayment termsWelcome bonus Check your rates
refinance student loans4.54%4.49%5 - 20 years$200Visit LendKey
refinance student loans4.99%4.47%5 - 20 years$200Visit Earnest
refinance student loans4.22%3.97%5, 7, 10, 15, and 20 years$120Visit Laurel Road
refinance student loans4.53%4.40%5 - 20 years$100 or $200, depending on the amount you refinanceVisit Credible
refinance student loans5.09%4.74%5, 7, 10, 15, and 20 years$100Visit SoFi
refinance student loans4.53%4.83%5, 7, 10, 15, and 20 years$100Visit ELFI