By lowering your interest rate or leveraging a better repayment term, refinancing your student loan (such as private, federal, and/or PLUS loans) could help you save money in the long run or pay them off sooner.
With the recent updates about student loan repayments, it’s more important than ever to evaluate your options if you have federal student loans so you can make an educated decision.
Five Steps to Student Loan Refinance
Student loan refinance may seem complicated, so we’ve broken down what to expect in five basic steps to student loan refinance.
- Compile a list of your current student loans, their balances, and interest rates.
Take stock of whether you have federal student loans, private student loans, or a combination of both, and who your servicers/lenders are. Make note of the current balances, the rates, and whether you have a fixed or variable rate. It may be a good idea to create a secure spreadsheet with the information for easy access later.
- You can find information about federal student loans on the Department of Education’s website.
- If you’re unsure which lender(s) hold your private student loans, you can consult your credit report.
- Explore current refinance rates and estimated payments.
Most lenders offer an option to enter your information on their website to view potential rates and offers. By entering basic details, the lenders will perform a “soft credit check” which will not affect your credit score. While every lender is different, most will ask for items such as:
- Name and contact information
- Your college or university
- Total of your student loan debt
- Your current income
Your results will include a list of available terms and rates, which may be fixed or variable; and an estimate of your payments. Compare information from different lenders, and then select the offer that best suits your needs.
- Gather the necessary information and apply.
Just as you did for your original student loans, you’ll need to provide documentation of your identity and income. In general, you will need:
- A government-issued photo ID
- Social Security card or number
- Proof of income such as paystubs
- Statements and account information for your current loans
You will need the same information for a co-borrower if applying with one. Be sure to respond to any requests for additional information promptly so the loan process isn’t delayed.
- Continue making your loan payments until the refinance loan is finalized.
The new lender will notify you when the refinance process is complete, which may take several weeks. Until that time, you should continue to make any scheduled payments on your loans.
- Register for online account access for your new lender and make note of your payment date.
Setting up automatic payments is an easy way to be sure your payments are made on time, and many lenders even provide a rate discount for automatic payments.
Refinance Timeline
Refinancing your student loans can often require a long processing time, due in large part to submitting and reviewing the necessary documentation and verifying the correct loan amount.
Please review the timeline carefully so you know what to expect!
Additional Considerations
It’s important to remember that every student loan situation is unique. There are many factors to consider when refinancing student loans, including a possible loss of loan benefits for any federal student loans you currently hold. These may include interest rate discounts, principal rebates, or some cancellation benefits that can significantly reduce the cost of repaying your loans.
Upcoming Free Webinar
To learn more, join our free webinar “Is Student Loan Refinancing Right for Me?” on Thursday, January 12, 2023.
- 12 p.m. or 5 p.m. central time
- A recording will also be made available for anyone unable to attend.
- Register for your spot today!
Helpful Student Loan Resources
STUDENTAID.GOV
BLOG POST ON REFINANCING
COLLEGE COUNSELOR
ESTIMATE RATE & PAYMENT
REFINANCE FAQ