Best refinance student loans in May 2025

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What is student loan refinancing?

Student loan refinancing is the process of taking out a new loan to pay off your existing student loans. When you refinance your student loans, you may qualify for a lower interest rate and a different repayment timeline. The best time to refinance your student loans is when it saves you money on interest or lowers your monthly payments.

Borrowers with good credit, in particular, will qualify for the best student loan rates. You can refinance both federal and private student loans, though it's usually best to avoid refinancing federal loans since they come with a number of perks that aren't available through private lenders.

Student loan refinancing requirements

Once you find a lender that best suits your financial situation, check its specific eligibility requirements. Though exact ones may vary, there are a few common requirements for refinancing student loans to be aware of.

• Debt-to-income ratio: Your debt-to-income ratio (DTI) is a measurement of how much debt you've accumulated compared to your monthly earnings. You have a better chance of getting approved if your debt-to-income ratio is below 50 percent.
• Credit score: When you apply for any loan, your credit score matters. Check your lender's credit score requirements before applying. If your credit score is in the mid-600s or lower, you may need to add a cosigner to your loan to qualify.
• Income: Lenders may impose a minimum income threshold, and they will likely want to see proof of employment — this tells them that you have the cash to make your monthly payments. Come prepared with recent paystubs, W2 forms or recent bank statements, as most lenders require documentation. 
• Refinancing amount: You will likely need to owe a minimum of $5,000 in student loans if you'd like to refinance. If you have less than that, most lenders won't work with you.
• Degree: You'll typically need a completed college degree to be eligible for student loan refinancing, though some lenders accept borrowers regardless of degree status.

If the lender you're considering offers a prequalification tool, you can see your estimated rate based on your general financial history with a soft credit inquiry, which won't hurt your credit score.

Should I refinance my student loans?

Refinancing your student loans makes financial sense only if the loan you apply for has a lower interest rate than the current interest rate of your student loans. You can use a loan calculator to determine your current monthly payment versus that of the loan you're considering. 

If you decide to refinance to a longer term to lower your monthly payments, keep in mind that you'll likely increase the overall cost of your loan through interest accrual.

Whether you should refinance also depends on what type of loans you have. Refinancing could be smart if you have private loans, but you'll lose benefits if you refinance federal loans. These benefits include:

• Income-driven repayment plans (IDRs): An IDR can create lower monthly payments based on your income and family size and any remaining balance after your repayment term ends could be forgiven.
• Loan forgiveness programs: These programs forgive loan balances for those in qualifying careers, like public service, those with permanent disabilities and those whose schools engaged in misconduct or fraud.
• Deferment and forbearance options: Borrowers in a temporary financial bind may be able to suspend their payments until they get their footing. However, interest will continue to accrue, and they won't be able to make progress toward forgiveness during this time.

How to refinance a student loan

Just as you did when initially borrowing for your education, the student loan refinancing process requires you to apply for a new loan. This loan will pay off your remaining student loan balance and have new terms and rates. Borrowers often choose to refinance to lower their rate or extend their term. However, while a longer term may lower your monthly payment, it can cause you to pay more in total interest.

The process to refinance your student loan requires the following 5 steps: 

1. Determine if refinancing is the best option: First and foremost, you must consider if this is the right financial move. Will you truly save money in the long run or will your monthly payment just reduce slightly?
2. Research lenders: There are many options available when it comes to refinancing your loan. Compile a list of potential lenders so you can compare features and rates. 
3. Shop for the best loan options: Every lender has its own acceptance criteria based on your credit score and loan. Shop around with many lenders to ensure you are getting the best new loan for your needs. 
4. Submit a loan application: To apply for a loan you will likely need to share information on your current student loan, personal contact information and any cosigner documents. 
5. Transfer payments to your new lender: Make sure that your old loan closes so you can begin making payments on your new loan. Be on the lookout for a payoff letter from your old lender to confirm the process has been completed. 

FAQs about refinancing student loans

How we chose the best student loan refinancing lenders 

The Bankrate team evaluated over a dozen lenders to select our top picks for the best student refi loans. To do this, Bankrate uses a 13-point system to evaluate student loan refinance products. This scoring criteria measures how lenders perform across three main categories.

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.