4 Best Student Loan Refinance Companies in 2021

No one wants to go through the inconvenience of repaying student debts that may last for two decades or even more. But, with the best student loan refinance options listed here, paying off your student loan has never been easier.

You should never avoid consolidating or refinancing your loan as it can impact your disposable income, savings, or even eligibility for a loan and mortgage.

Yet, student debt refinancing is an important step that shouldn’t be taken lightly. That’s why we’ve reviewed, analyzed, and compared four companies to help you find the right one. We’ll explain the pros and cons of each, as well as the best alternatives for different cases.

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Top 4 Student Loan Refinance Companies in 2021

1. Credible

Credible is a student loan marketplace that helps you compare and contrast various direct lenders. Just fill in the form to see what lender you’re eligible for, and get rate estimates. Full Review

  • APR: 2.7%-8.74% fixed, 1.93%-8.64% variable
  • Loan amount: $5,000-$500,000
  • Loan term: 5-20 years

Credible is a student loan marketplace that helps you compare and contrast various direct lenders. Just fill in the form to see what lender you’re eligible for, and get rate estimates. Full Review

2. SoFi

SoFi is an online lender that doesn’t only grant options for student loans refinance, but also provides its borrowers with an array of benefits. Full Review

  • APR: 2.99%-6.88% fixed, 2.25%-6.43% variable (with AutoPay)
  • Loan amount: $5,000 - up to the full loan balance
  • Loan term: 5-20 years

SoFi is an online lender that doesn’t only grant options for student loans refinance, but also provides its borrowers with an array of benefits. Full Review

3. Earnest

Earnest is a direct lender designed for applicants who seek the best student loan refinance rates and want to repay their loans quickly and by customizable terms. Full Review

  • APR: 2.98%-5.79% fixed, 1.99%-5.64% variable (with AutoPay)
  • Loan amount: $5,000-$500,000
  • Loan term: 5-20 years

Earnest is a direct lender designed for applicants who seek the best student loan refinance rates and want to repay their loans quickly and by customizable terms. Full Review

4. CommonBond

CommonBond is a direct lender that offers student loan refinancing to borrowers with a bachelor’s degree who seek repayment flexibility. Full Review

  • APR: 2.59%-6.74% fixed, 2.58%-6.89% variable
  • Loan amount: $5,000-$500,000
  • Loan term: 5-20 years

CommonBond is a direct lender that offers student loan refinancing to borrowers with a bachelor’s degree who seek repayment flexibility. Full Review

Best Student Loan Refinance Options

Credible Best for low-interest rates
SoFi Best for medical and dental students
Earnest Best for paying off debts fast
CommonBond Best for flexible repayment terms

Detailed Reviews

Credible
Credible

BEST FOR

low-interest rates

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  • APR: 2.7%-8.74% fixed, 1.93%-8.64% variable
  • Loan amount: $5,000-$500,000
  • Minimum credit score: 670
  • Loan term: 5-20 years
  • Origination fee: 0%
  • Type of collateral: None
  • Funding time: Not specified

Credible is one of the best places to refinance student loans. It is a lending platform that allows you to compare multiple lenders without charging any fees. This way, you can easily find the best lender that will help you refinance your student loan. As its mission is to facilitate getting the best loan refinancing, Credible enables you to fill out the application form on their website. After that, the platform will guide you through the entire process of application.

A student loan refinance via Credible makes sense if you have a private loan with higher interest rates, as you’ll have the opportunity to get lower rates when you refinance. Likewise, if you’re repaying your federal loan with a regular repayment plan, Credible will enable you to repay it faster.

Credible Loan Requirements

It’s important to note that Credible is a lending platform that only matches you with a direct lender. So, lenders are the ones who set the actual terms of the loan. Still, there are some basic requirements you need to meet.

To qualify for the best refinance student loans via Credible, you have to be 18+ years old U.S. citizen and have student debt of at least $5,000. You must have a good to excellent credit history and a steady stream of income. Additionally, you may be turned down if your debt-to-income ratio is too high.

In case you have a limited credit history or a bad FICO, you may apply with a co-signer to increase your opportunities for student loan refinancing.

Credible Loan Agreement Terms

APR: Fixed APR may range from 2.7%-8.74%, whereas the variable is 1.93%-8.64%, depending on the lender and your credit profile. If your score is excellent, you’ll be offered the lowest APR. Conversely, if your FICO is lower, you’ll be charged the highest rate.

Note that some lenders offer both fixed and variable APR. The former remains unchanged for the duration of the loan, while the latter may fluctuate on a monthly basis.

Loan amount: The minimum loan amount you can apply for is $5,000, whereas the maximum goes up to $500,000. The sum you’ll be approved for depends on your income and credit history.

Loan term length: Credible’s partners’ best student loan refinance programs allow their borrowers to repay their student loans in 5, 7, 8, 10, 12, 15, and 20 years. The loan term will affect both your rate and monthly payment. If the term is shorter, the interest rate will be lower, but the monthly payment higher. If the term is longer, the payment will be smaller.

Origination fee: As a lending platform, Credible doesn’t charge any fee whatsoever. Yet, its partner lenders may charge origination fees of 1% to 8%.

Type of collateral: Credible will never ask you for any type of collateral. However, direct lenders it collaborates with to provide you with the best student loan refinancing may do so.

Funding time: How long it will take until the funds are disbursed depends on the lender. Each of them has a specific timeline.

Credit check: When you apply for a student loan refinance, Credible will perform a soft pull to match you with the lender that suits you best. However, if you accept the lender’s offer and proceed with the application, the lender will perform a hard pull that will lower your FICO by 5 points.

What we liked & didn’t like

If you’re looking for the best student loan refinance options, Credible is the right place. It allows you to refinance Federal Student loans, Private Student loans, and Parent PLUS loans at highly affordable rates. Its website is simple, user-friendly, and easy to navigate. The pre-qualification process is straightforward — you only need to fill in the form on Credible’s website. The platform will quickly find the best lender whose interest rate, repayment fees, and loan terms will best suit your needs.

On the negative side, Credible isn’t a lender but a lending platform that matches you with companies specializing in student loan refinance. Going through an intermediary may not be everyone’s cup of tea. Also, some borrowers complained about issues with their applications and incorrect interest rates.

SoFi
SoFi

BEST FOR

medical and dental students loans

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  • APR: 2.99%-6.88% fixed, 2.25%-6.43% variable (with AutoPay)
  • Loan amount: $5,000 - up to the full loan balance
  • Minimum credit score: 670
  • Loan term: 5-20 years
  • Origination fee: 0%
  • Type of collateral: None
  • Funding time: Not specified

Social Finance, better known as SoFi, is the best student loan refinance company that was the first to accept both federal and private student loans. It came into existence in 2012 and has remained a leader in the market ever since. It is an excellent choice for medical and dental school residents, as they have a chance to cap their monthly payments to $100 for 4 years. Also, they can bypass the negative effect of compounding interest.

SoFi also offers excellent perks, such as career coaching and wealth management. However, possibly the best student loan refinance bonuses are the unemployment protection program and loan discharge in the event of death or permanent disability of a borrower. The former allows you to put off your monthly payments for up to a year (for three months at a time) in case you lose your job involuntarily. This perk is very rare among other lenders.

SoFi Loan Requirements

To be eligible for SoFi’s student loans refinance offer, you have to meet certain requirements. First and foremost, you have to be 18 or more years old. Second, you have to be a US citizen or a permanent visa holder. However, if you are a non-permanent resident, you have an option to apply with a co-signer who is a US resident.

Thirdly, your loan has to be from a Title IV accredited higher education institution. Additionally, to refinance a student loan via SoFi, you must have an associate’s degree or a higher level of education. Note that SoFi doesn’t accept borrowers who dropped out of college, so such applicants should look for other lenders.

Lastly, you must have a good to excellent FICO and a regular income flow. While there isn’t a minimum amount required, the average borrower income is over $100,000. Also, you have to be employed or have evidence that your employment will start in the next 90 days.

SoFi Loan Agreement Terms

APR: The fixed APR for SoFi’s top student loan refinance programs ranges from 2.99% to 6.88%, whereas the variable rate starts at 2.25% and goes up to 6.43%. These rates factor in the 0.25% discount that’s applied if the borrower enrolls in AutoPay.

Loan amount: The minimum loan sum you can borrow amounts to $5,000, while there is no specified maximum.

Loan term length: Borrowers may pay their loan off in 5, 7, 10, 15, and 20 years, depending on the loan amount. SoFi doesn’t charge a prepayment fee, so there is an option of early repayment. If you opt for the shorter term, your APR will be lower, but your payment will be higher.

Origination fee: Along with a $0 prepayment fee, SoFi also charges a 0% origination or administration fee, which, among other factors, makes it the best student loan refinance program.

Type of collateral: SoFi doesn’t require any collateral; what’s more, it doesn’t require a co-signer either (unless you’re a non-permanent resident). Yet, having a co-signer may bring about better terms and rates.

Credit check: To see if you prequalify for a student loan refinancing, SoFi will perform a soft pull. However, if you proceed with the application process, a hard pull will be performed.

What we liked & didn’t like

Considering SoFi’s offers, perks, and benefits, we cannot but conclude that it is one of the best student loan refinance companies. The fixed and variable interest rates are acceptable. What’s more, you may get a discount if you activate an AutoPay feature. It charges no additional fees, so you don’t have to worry about prepayment, origination, or late payment fees.

However, SoFi may have strict eligibility requirements for some applicants. The dropouts aren’t accepted, so they have to look for other lending companies. International residents who don’t have a permanent visa may apply for a refinance, but only with a co-signer.

Earnest
Earnest

BEST FOR

paying off debts fast

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  • APR: 2.98%-5.79% fixed, 1.99%-5.64% variable (with AutoPay)
  • Loan amount: $5,000-$500,000
  • Minimum credit score: 650
  • Loan term: 5-20 years
  • Origination fee: 0%
  • Type of collateral: None
  • Funding time: Not specified

Earnest started providing student loans, loan refinances, and personal loans in April 2019. It’s the best place to refinance student loans if you don’t have a great credit history but excel in money management. Earnest has quite different criteria from other direct lenders.

Sadly, Earnest isn’t available in the entire US. The lender doesn’t accept applicants from Delaware, Kentucky, and Nevada. Similarly, not all Earnest options are available in all 50 states. Thus variable APR isn’t available in Alaska, Illinois, Minnesota, New Hampshire, Ohio, Tennessee, and Texas.

Earnest Loan Requirements

Earnest may have somewhat rigid underwriting criteria and requirements for refinancing student loans; still, they differ significantly from those of other lenders. To qualify for Earnest, you must be 18 or older and hold the US. citizenship or permanent residency.

The minimum FICO is 650, yet, a credit score is not the only requirement. You must have a stable stream of income and savings in your spendings account that will cover a minimum of two months of expenses. Additionally, you mustn’t have excessive non-student, non-mortgage debts as you’ll be disqualified for the loan refinance. If you’re still at college or university, you must be within six months from graduating and have a job offer.

Earnest is one of the best student loan refinance lenders for applicants with mediocre credit history as it reviews your overall personal finances. To be eligible for a loan refinance, you should spend more than you earn. Hence, your DTI ratio shouldn’t be too high.

Earnest Loan Agreement Terms

APR: Earnest offers some of the most competitive rates in the market. The variable APR amounts to 1.99%-5.64%, while the fixed is 2.98%-5.79%. These rates include the 0.25% discount that comes with optional AutoPay enrolment.

Loan amount: The minimum loan amount you can refinance is $5,000, whereas the maximum is $500,000.

Loan term length: Earnest offers the best student loan refinancing options regarding loan terms. The expected loan term is 5-20 years. However, with Earnest, you have the possibility to choose the precise amount of your monthly payment, and the company will suggest a loan term that will hit the amount you selected. This allows you to repay your loan as soon as possible.

Origination fee: Taking into account that it doesn’t charge any origination or other fees, it doesn’t come as a surprise that Earnest is regarded as one of the best student loan refinance companies.

Type of collateral: Earnest doesn’t require any collateral, nor does it accept co-signers for loan refinances.

Credit Check: When you fill in the application form to check whether you qualify and what your rates will be, Earnest will perform a soft pull only. If you accept its offer and decide to continue with the application process, the company will perform a hard pull.

What we liked and didn’t like

Earnest is, without a doubt, the best place to refinance a student loan, given its competitive rates. They might not be the lowest but are definitely among the most affordable for applicants with fair credit. Additionally, Earnest has unique underwriting criteria. Though the minimum required credit is fair, it will accept applicants who have no credit history, provided that they have a stable income flow and are able to manage their finances successfully.

On the negative side, Earnest doesn’t accept applicants from all states, nor are its variable student loan refinance rates available in the entire USA. Thus, citizens of Delaware, Kentucky, and Nevada will have to look for other lenders, while those from Alaska, Illinois, Minnesota, New Hampshire, Ohio, Tennessee, and Texas, will have to accept fixed APR only.

CommonBond
CommonBond

BEST FOR

flexible repayment terms

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  • APR: 2.59%-6.74% fixed, 2.58%-6.89% variable
  • Loan amount: $5,000-$500,000
  • Minimum credit score: 680
  • Loan term: 5-20 years
  • Origination fee: 0%
  • Type of collateral: None
  • Funding time: Not specified

CommonBond offers the best way to refinance a student loan if you have a bachelor’s degree or higher and you’re looking for a lender that allows flexible repayment. This lender stands out by offering 24 months of forbearance, which is a bit longer compared to the competition.

Refinancing your student loan with CommonBond is an excellent idea if you’re seeking more than just a loan refinance. Namely, you can use its SmartSave program to channel your refi school loan savings into another high-yield savings account. What’s more, every time an applicant decides to refinance their loan with a common bond, the lender donates to the non-profit educational organization called Pencils of Promise.

CommonBond Loan Requirements

CommonBond accepts applicants who are 18+ years old. Unlike other lenders that insist on citizenship or permanent residency, CommonBond is excellent for international students who seek the best way to refinance their student loan debt. So, if you’re a non-resident but hold an H1-B, J-1, L-1, E-2, or E-3 visa, you’ll be eligible to apply for the refi.

Furthermore, you must be employed with a stable income flow. In fact, you’ll be asked to submit evidence of employment when applying for the refinance. Your FICO should be at least 680, while your debt-to-income ratio should be as low as possible.

Last but not least, you must have graduated with a bachelor’s degree or higher. CommonBond doesn’t accept applicants who haven’t graduated or have an associate’s degree.

CommonBond Loan Agreement Terms

APR: CommonBond offers the best rates on student loan refinance on the market. In addition to the fixed APR of 2.59%-6.74% and variable 2.58%-6.89% APR. CommonBond offers a hybrid APR ranging from 2.99% to 6.75%. It stands out from other rates as it allows the rate to stay fixed for the first five years. Note, though, that a hybrid APR is offered for 10-year refinance loans.

Loan amount: The minimum loan amount for student loan refinancing is $5,000, while the maximum is $500,000.

Loan term length: Borrowers can refinance student loans in 5, 7, 10, 15, or 20 years. The shorter the loan term is, the more favorable APR will be. On the other hand, if you opt for a longer loan term, your monthly payment will be lower.

Origination Fee: CommonBond charges no application or origination fees, nor any other fees, so you needn’t worry about hidden and extra costs.

Type of collateral: To refinance your student loan, you won’t be asked for any type of collateral whatsoever. Yet, you might need a co-signer if the lender doesn’t find you qualified for the refinance.

Credit check: CommonBond will perform a soft pull to check your eligibility and to come up with the best student loan refinance interest rates. When you accept the offer and proceed with the application, the lender will perform a hard inquiry.

What we liked & didn’t like

CommonBond is a top-rated lending company that offers excellent student loan refinancing options and rates. Its hybrid interest rate that combines fixed and variable APR helps the lender stand out from its competition. Similarly, it accepts international students that don’t have a permanent visa, which very few other lenders do. What also makes CommonBond the best company to refinance student loans is deferment and forbearance options. Hence, if borrowers decide to return to school, go to the army, or have an internship, they may request a deferment. In case borrowers lose their jobs, they qualify for 24 months of forbearance, which is the longest on the market.

On the downside, CommonBond doesn’t accept dropouts or all graduates. To qualify for the refinance, prospective borrowers must have at least a bachelor’s degree. Associate degree holders and those with no degree would have to look for a refinance elsewhere.

How to Refinance Student Loans

Refinancing your student loan means obtaining another loan at a lower APR to repay a current private loan. Though used interchangeably, loan refinance is different from loan consolidation, where several loans are fused into one.

Refinancing your student loan could save you thousands of dollars with the right lender. Thus, it’s vital to find the best way to refinance your student loan debt. Check out the following steps to learn how to do so.

Is refinancing a good option for you?

Refinancing a loan is meaningful in case it can help you save money and repay the loan earlier. Yet, it’s not meant for everyone. To be eligible for a lower rate and satisfy the lenders’ criteria, you need to have at least good credit and healthy finances.

You should also keep in mind that, if you refinance federal student loans, you can’t qualify for specific government repayment programs such as loan relief or income-driven repayment. If your job is secure and you won’t need these features, you should avoid refinancing a federal student loan.

However, the best private student loan refinance options have very few drawbacks. One of them is that they aren’t eligible for such federal programs.

Shop around

All lenders and their offers might look the same at first. But if you dig deeper into their requirements and features, you’ll see that some of them may significantly impact your refi terms.

For instance, if you haven’t graduated, you need to find a lending company that accepts college dropouts. Likewise, there are lenders that accept only a bachelor’s degree or higher. Therefore, if you have an associate degree only, you’ll have to shop around more to find the best way to refinance student loans.

Get several rate estimates

Once you’ve discovered several lenders that meet your needs and requirements, obtain rate estimates from all of them. To get this done, the companies will perform a soft inquiry, so you needn’t worry about damaging your credit.

Lending platforms like Credible will enable you to compare multiple lenders and their rates at once. You can even visit their websites. While you’re shopping for the best rates for student loan refinance, some lenders will ask you to pre-qualify, i.e., give them the most important info so that they could come up with the rates you’re eligible for. Others may require that you submit the entire application to get the rate. In such a case, you’re given an actual offer.

Select the lender

As soon as you select the lender, there are several decisions more to make. Namely, you have to choose between fixed and variable rates, as well as to determine the length of the refinancing loan’s term.

Generally, fixed rates are the most favorable option for the majority of borrowers. Variable rates might be lower at first, but they’re uncertain as they tend to change monthly or quarterly.

To save your money, you should opt for the shortest loan term you can afford. However, if you need low monthly payments, select a longer loan term.

Finish your application

To move forward with the lender you’ve chosen, you have to complete your application for the best student loan refinance. In this step, you’ll be required to submit more information on your financial situation and upload a range of documents. In the majority of cases, you’ll have to submit the following:

  • Evidence of employment
  • Evidence of residence
  • Evidence of graduation
  • ID issued by the government
  • A payoff verification statement or a loan

Lastly, you have to enable the lender to perform a hard inquiry in order to confirm which student loan refinancing rates you’re eligible for.

Sign the documents

When you get the approval, you have to sign in the final documents to accept the refinance. A rescission period of three days starts from the moment you sign the final disclosure document. Meanwhile, you can cancel your refinance if you change your mind.

If you’re not approved, the lender will inform you about the reason. If it’s due to your bad credit, you can try applying with a co-signer.

Wrap Up

The knowledge you have gained at college should last forever. What shouldn’t, however, is your excessive monthly payments you make for your student loan. In fact, according to student loan debt stats, even people in their forties are still paying off their college degrees. To get rid of those high payments, you should consider refinancing your student loan.

The best student loan refinance for graduate school will not only help you repay your loan earlier, but you’ll also save some significant sums. Notwithstanding whether your loan is private, federal, or parent PLUS, the lending companies we’ve reviewed will allow you to refinance them quickly and at lower rates. Your student loan will be paid off much sooner than you’d think. What’s more, you’d spend far less money due to more affordable interest rates and shorter loan terms.

FAQ

Is it a good idea to refinance a student loan?

In the majority of cases, refinancing a student loan is a fantastic idea, particularly if you have good-to-excellent credit, a low DTI ratio, and a stable stream of income.

You should take refinancing your student loan into consideration if you seek to combine your student loan payments into one at a lower interest rate. However, if you want to benefit from government programs for federal student loan protection, then refinancing is not a good option.

What is a good rate for refinancing student loans?

As a rule of thumb, any student loan refinancing offer with 6% or less fixed APR or 5% or less variable APR is a good deal.

As the main point of student loan refinance is saving money on lower interest rates, this is among the very first things you should pay attention to when shopping around. In general, fixed rates range from 3.2% to 8.63% and variable rates range from 1.99% to 8.38%. While variable rates tend to be lower, as their name says, they’re variable and can change on a monthly or quarterly basis. Fixed rates stay fixed for the duration of the loan.

As you can tell, the lending companies we’ve reviewed offer excellent rates.

Is there a downside to refinancing student loans?

Refinancing student loans has minimal drawbacks, and it’s typically related to refinancing a federal loan. Namely, if you opt for a federal loan refi, you will automatically turn them private. This further means that you won’t have any access to government programs like income-driven repayment or public service loan forgiveness. Hence, if you’re relying on government protections, you shouldn’t refinance your student loan.

However, if you’re willing to sacrifice these federal protection programs, a student loan refi can be a wise strategy for repaying your loan while saving money. What’s more, some of the lenders are ready to offer help if you encounter financial hardships or lose your job.

Does refinancing student loans hurt your credit?

Refinancing your student loans has minimal impact on your credit. The hard credit pull will knock down your credit score by 5 points or so but, other than that, you’ll be fine as long as you make all your payments on time.

Of course, making too many inquiries can cause greater damage to your credit so make sure you only apply if you’re sure you want to accept the terms.

What is the best student loan refinance company?

Earnest is an excellent choice for borrowers who want to repay their loans quickly at flexible rates, while CommonBond is great for international students and those who need flexible payment terms. SoFi is a good lender for relatively high-income borrowers.

All companies we’ve reviewed offer some of the best student loan refinance options on the market. They accept federal, private, and Parent PLUS loans, which you can pay off at great rates within a period that is the most convenient for you. Additionally, they all include deferment in case you decide to proceed with your education, go to the army, or do an internship, as well as forbearance you may find beneficial in unexpected circumstances such as an involuntary job loss.