Ultimate Guide on How to Refinance Student Loans

June 29, 20220

How to Refinance Student Loans


If you’ve ever struggled with paying off your student loans, you’re not alone. Student loan debt is a huge problem in the U.S., and one of the biggest issues is that people have a hard time figuring out what to do with their student loan debts. One option is to refinance your student loans, which can save you money in interest and get you out of debt faster by repaying your balance at a lower rate. In this article, we’ll go over how to refinance your student loans so you can get more savings, pay off your debt faster, and avoid future problems with high-interest rates or late payments. We’ll also cover who should consider refinancing their student loans and what types of refinancing options are available for those who qualify!

Compare rates

In order to get the best student loan refinance rates, you’ll need to compare rates from different lenders. Your first step is to research the most recent interest rate and fees by finding a few options on websites like LendingTree.com or Bankrate.com. However, don’t forget that lenders often charge lower interest rates for borrowers who agree to pay off their loans over a longer period of time—which means that you’ll want to include all fees and interest rates in your comparison.

Finally, check out the annual percentage rate (APR) before signing any contracts or making payments toward your new student loan refinance program. The APR is basically an average interest rate: It’s calculated based on how much money you would owe if all of your payments were made at once instead of just one month’s payment at a time (the way they are when making monthly installments).

Consider a credit union

If you’re looking for the best deal on student loans, consider a credit union. Credit unions are member-owned and operate as not-for-profit organizations. This means they tend to offer lower interest rates and fees than banks.

Credit unions also tend to have more flexible lending policies, such as approving people with bad credit or even no credit history at all.

Make sure you qualify

Before you begin the process of refinancing student loans, there are a few factors that you need to consider.

  • You must have good credit. This means having a credit score of at least 700. Lower scores may mean that you will need to pay more interest or have higher monthly payments. If your score is already low, check out this article on how to improve it. If your credit score is too low for refinancing options, consider improving it first by making small payments on student loan debts every month and paying them off as soon as possible (it’s best if they’re paid off within six months). Once your debt is eliminated from your account, try getting a secured card so that after 12 months of responsible use with no late payments or over-limit fees and an increase in overall credit limit by 10 percent (to make sure there won’t be any surprises), build up some goodwill in case something goes wrong later down the line!

Don’t forget about the fine print

As with any type of loan, it’s important to read the fine print before you sign on the dotted line. A good way to gauge this is to ask yourself if you would be comfortable agreeing to the terms and conditions of the loan if your friend had taken it out instead of you. If not, consider looking elsewhere for another refinance option. As a general rule of thumb:

  • Make sure that the lender is reputable: You should do some research into your prospective lenders’ financial health before signing on for a student loan refinance. This can be done by looking them up on Google or via an outside source like CreditorsAndPayers (CAP). Also, make sure they’re licensed with state and federal regulators as required by law—this will help ensure that they aren’t scamming students into bad loans or taking advantage of their lack of knowledge about personal finance matters

Ask about an autopay discount

If you’re the type of person who can be trusted not to forget your monthly payments, consider asking your loan provider about an autopay discount. This will allow you to set up automatic payments from a checking account, debit card, or savings account. The amount that you save varies based on which provider you use; it may be as much as 0.25% off your interest rate for making payments through autopay every month.

If at any point during the year, say if you lose one of those sources of income or have another change in financial status (like getting married), don’t hesitate to contact your provider and cancel this feature; otherwise, they might continue charging fees even though they know they aren’t getting paid!

Consider your payment date

  • The one mistake you don’t want to make is not considering your payment date when you refinance student loans. Many people make the mistake of assuming that their student loan payments are due on the same day every month (or semester or year). This is rarely true.
  • Student loan payments can be due on any day of the month and any day of the week, depending on how many months have passed since your last payment was made. Some lenders will set up auto-pay so they can take out funds from your bank account each month on a specific date in order to pay off your balance. Other lenders will let you choose when they draw money from your account—meaning that even though two different companies might have given you their own set schedule for paying off their loans, they may both use different dates as well!

Student loans can be very helpful when it comes to affording college, but in some cases, they may end up costing too much. If you feel like your student loan interest is too high, refinancing may help you save money.

In the context of college financing, student loans can be very helpful. After all, they give students the opportunity to attend a school that otherwise wouldn’t have been possible for them. However, some people find themselves in situations where their loan interest is too high and refinancing becomes necessary so that they’re able to save money on their payments.


Refinancing your student loans can be a great way to save money on your debt and make it easier for you to reach financial freedom. Take some time to look over our guide so that you can decide if this is the right option for you. If you have any questions, we’re always here to help!