5 Best Student Loan Refinance Companies of October 2022

Refinancing your student loans can help you pay off debt quicker and save you money in the long run. Refinance rates have been slowly rising from their historic lows in 2021, albeit somewhat unevenly across different terms, so it might be a good idea to act before they go up any further.

Read on to learn more about our top picks for best student loan refinancing companies of 2022, along with industry insights and the latest information regarding student loan debt forgiveness.

As of this writing, President Biden has extended the Covid forbearance pause on student loan until December 31, 2022. Furthermore, the president announced an official federal student loan forgiveness plan: borrowers earning less than $125,000 will receive $10,000 in debt cancellation, while beneficiaries of need-based Pell Grants during college will be eligible for $20,000.

Our Top Picks for the Best Student Loan Refinance Companies

• Credible - Best Student Loan Marketplace
• Splash Financial - Most Affordable Loan Payment Options for Medical Students
• PenFed - Best Credit Union
• Laurel Road - Best Student Loan Consolidation for Medical Students
• Earnest - Best for Customizing Loan Repayment

Best Student Loan Refinance Reviews

Why we chose it: We chose Credible as our best student loan marketplace because its prequalification tool allows borrowers to check rates from multiple lenders after filling out a single application.

Credible is an online marketplace for private student loans and student loan refinancing that provides personalized quotes from banks, fintech companies and state loan authorities such as Massachusetts Educational Financing Authority (MEFA) and Rhode Island Student Loan Authority (RISLA).

The marketplace offers student loan refinancing through undergraduate, graduate and Parent PLUS loans. While not all Credible partners may offer the lowest interest rates compared to other lenders on this list, the marketplace boasts:

• High approval rates
• Income-driven repayment plans (particular to RISLA)
• No partnerships with lenders that charge prepayment fees, application fees, or origination fees

Other Credible partner lenders include Advantage Education Loan, Brazos, Citizens Bank, College Ave, EdvestinU, ELFI, INvestEd, ISL Education Lending and PenFed.

Be aware that as a marketplace, Credible doesn’t list all terms and conditions of each lender — that’s why we recommend you do your own research to find out more about specific forbearance policies, discounts and unemployment protection.

Why we chose it: We chose Splash Financial as having the most affordable repayment options for medical students due to its expertise in medical school debt.

Splash Financial is an online marketplace that partners with loan servicers to provide medical students with the lowest student loan refinance rates and affordable repayment options. It also partners with lenders to refinance other student loans. While a marketplace, Splash Financial won’t show you multiple offers from the banks and credit unions in its network, and you’ll only know who it considers the best fit after filling out a full application.

Terms range from five to 25 years for variable-rate loans (and five to 20 years for fixed-rate loans). While there is no maximum loan amount, the minimum needed to refinance is $5,000. Conditions may apply.

For medical and dental residents:

• Refinancing medical school loans with Splash could help you lower payments to as little as $100 a month for the duration of your residency, plus an additional six months after the end of the residency or fellowship.
• Students with associate degrees in specific medical fields are allowed to refinance up to a maximum of $50,000 with Splash.

The company offers an easy loan application and pre-qualification process for undergraduate and Parent PLUS loans. Spouses can benefit from student loan consolidation and refinance their loans together, as the company offers the option to “take over” your spouse’s loans. Parent loans can also be transferred to the child.

Read full review>>

Why we chose it: We chose PenFed as the best credit union because of its spousal loan options and low interest rates.

Pentagon Federal Credit Union is the second-largest credit union in the nation that offers student loan refinancing. PenFed’s student loan products are provided exclusively by online lender Purefy.

The company offers fixed- and variable-rate options for borrowers — students, parents and couples — refinancing up to $300,000 in private or federal student loan debt, with loan payment terms ranging from five to 15 years.

With PenFed, married couples can file a loan application to refinance their student loans together. The spouse with the highest degree should apply as the primary applicant to ensure the best rates. Unlike traditional refinancing, only one person needs to have completed a bachelor’s degree or higher to refinance through PenFed’s Couple Loan.

The annual income requirement ranges from $42,000 to $50,000, depending on the loan amount and whether there is a cosigner or not. As a member of PenFed, you will gain access to member rate discounts, an advice center and financial offers.

Why we chose it: We chose Laurel Road as the best student loan consolidation option for medical students because of its reduced student loan refinancing rates for optometrists, nurses, dentists, physicians, or physician's assistants.

Laurel Road’s medical school loan program is available for medical residents or fellows who want to consolidate their federal and private loans into a single loan payment.

Interest won’t compound during your residency, and the company allows you to reduce payments to as little as $100 per month for up to four years before you start standard repayments.

Your eligibility requirements as a resident are based on your:

• Credit profile
• Monthly debt payments
• Income projections at the end of your training period

Laurel Road offers a refinancing option for up to $50,000 for medical residents with associate degrees in eligible healthcare fields. The $50,000 maximum will not apply to parents borrowing for children pursuing an associate degree.

We liked that the lender offers a handy calculator so that prospective borrowers can see what their potential savings might be like with a refinance.

Why we chose it: We chose Earnest as best for customizing loan repayment because of its interesting approach to underwriting based on earning potential and its precision pricing model.

Backed by student loan giant Navient, Earnest offers multiple loan repayment options and refinance loans for students and parents at competitive rates. The company also features a unique underwriting approach, which factors your earning potential to determine your interest rate and payments. Earning potential is based on your degree, your history of on-time payments and your credit score.

Earnest also offers a “precision pricing” option, which:

• Allows you to choose a loan repayment term based on your ideal monthly payment amount
• Offers term lengths at 1 to 3-month intervals between 5 to 20 years
• Benefits recent graduates or borrowers that may not have sufficient credit history to qualify for refinancing elsewhere

To refinance your student loan through Earnest, you must have a minimum loan balance of $5,000, or $10,000 if you reside in California. The company states that once you are approved, you are automatically approved for your entire loan amount, but you can choose to refinance less.

Other student loan refinance companies we considered

Navy Federal Credit Union

Navy Federal is the largest credit union in the world and specializes in banking and financial services for members of the military. Students with any type of student loan with Navy Federal are eligible to use the Career Assistance Program, an online job training tool that provides tips on interviewing, resume building and more. Parents that have taken out loans for multiple children can refinance and benefit from student loan consolidation.

Why it didn't make the cut:

• Limited membership: The credit union only services members of the military or those who have family or household members in the armed forces.

Citizens Bank

Citizens Bank combines the stability of a traditional bank with the flexibility of online lending and offers refinancing options for both students and parents.

Loan refinancing is available to permanent resident aliens and non-U.S. citizens (with a qualified cosigner), something that most other loan servicers don’t offer.

Why it didn't make the cut:

• Citizens Bank has a history of complaints. This eventually resulted in regulatory action by the CFPB in 2015. The issue seems to have improved within the past few years, as there are currently only 43 complaints against the company's student loan refinance products at this time.

SoFi

SoFi is a leading online loan servicer that offers student loan consolidation and refinancing for undergraduate, graduate, medical student and Parent Plus loans.

Member perks include career coaching, free access to a college cost comparison tool, free access to personalized financial planning advice and a referral program that pays you and the person you referred $300 for refinancing with SoFi.

Why it didn't make the cut:

• While SoFi offers competitive rates and provides members with various cost-free benefits, the lender barely missed making our list of top student loan refinance servicers. It currently has 53 complaints against it with CFPB, mainly relating to its loan process.

Student Loan Refinance Guide

In this guide, you will find information on what refinancing your student loans entails, when the best time to refinance is and what you need to qualify.

Table of Contents:

• How does refinancing student loans work?
• When to refinance student loans
• Student loan refinance pros and cons
• How to refinance student loans
• Student loan refinance application requirements
• Student loan refinancing vs. Student loan consolidation
• Student Loan Refinance and COVID-19
• Latest News on Student Loan Refinance

How does refinancing student loans work?

When you refinance your student loan you are replacing your current loan with a new loan with new terms from a private lender. Generally, borrowers refinance student loans to extend their repayment period, obtain a low interest rate (and therefore lower monthly payments) or consolidate multiple student loans into one single payment.

You can only refinance student loans through a private lender, not the federal government. If you have federal student loans, keep in mind that you will be giving up federal benefits that come with government loans such as student loan forgiveness programs and certain loan repayment programs should you choose to refinance. If your student loan is from a private lender you can refinance with your current lender or choose a different lender.

When to refinance student loans

With interest rates near historic lows but slowly trending upwards, refinancing your student loans — whether federal or private — can save you money by replacing your existing education debt with a new loan under a private lender.

Be aware that refinancing a federal loan means losing valuable benefits and protections, such as income-based loan repayment plans, public service loan forgiveness, interest subsidies and student loan tax deductions.

Student loan refinance pros and cons

Take a look at the following pros and cons to determine if refinancing your student loan is the right choice:

How to refinance student loans

Check your credit

Student loan refinance lenders will take into account your creditworthiness. Generally, borrowers with credit scores in the high 600s, typically around 650 to 680, are more likely to qualify for a refinance loan.

If you have a low score or bad credit, a good first step is to check your credit reports for any incorrect information that may be affecting your score. Then take the appropriate steps to remove negative items from your credit history and work to improve your financial situation.

Consider the types of loans you have

Refinancing a federal loan means you lose exclusive benefits provided by the U.S. Department of Education, including public service loan forgiveness (PSLF), income-driven repayment plans, forbearance options and deferment. Private student loans generally have a limited disaster or emergency forbearance period compared to federal loans.

Shop around

When comparing refinancing lenders, look at the credit score and annual income requirements, the annual percentage rate (APR) offered and debt-to-income ratio (DTI) requirements. Take the time to check the lender’s history with customer complaints or whether they’ve had any recent lawsuits related to their student loan products within the last 5 years.

Evaluate cosigner release options

Some private lenders may offer cosigner release options if the primary borrower meets specific repayment qualifying criteria. With a cosigner release, the cosigner’s credit will be cleared of debt, but the loan will remain in their credit history.

Research lender’s financial hardship relief options

Some online lenders offer student loan unemployment deferment and forbearance, relief options that allow you to temporarily pause loan payments until you get back on your feet. A typical forbearance period with a private lender can be two to three months.

To learn more, check out our full guide on how to refinance student loans.

Student loan refinance application requirements

A successful application process depends on the following:

Good credit

Most lenders require credit scores above 650, though you’ll need a higher score to qualify for the lowest advertised rates. If your credit is too low or you have a short credit history, you’ll likely have to apply with a cosigner that has excellent credit and a stable income.

Proof of Income

Stable annual income is essential. Lenders will evaluate your debt-to-income ratio (DTI), meaning the percentage of your gross income that goes toward paying debts each month. Most companies require you to have a low DTI to qualify, but some may accept written job offers as sufficient evidence.

Cosigner

Applicants with insufficient credit history, low income or a low credit score will benefit from a cosigner. A cosigner can be a parent or relative that applies for the loan with you and takes on the responsibility of paying it back if you can’t. Cosigners must have sufficient income and strong credit.

College degree

A college degree isn’t always necessary to refinance your student loans, but having a degree gives you more options. Most lenders require a bachelor’s degree to qualify for refinancing, and a few accept borrowers with associate degrees.

U.S. citizenship or permanent residency status

Most, if not all, lenders require you to be a U.S. citizen or permanent resident to be eligible to refinance your student loans. If your student loans are foreign, it’s recommended that you build sufficient credit in the United States to qualify for refinancing.

Student loan refinancing vs. Student loan consolidation

One of the benefits of refinancing through a private student loan lender is that borrowers can consolidate multiple loans into one loan and have a single monthly payment under one servicer.

Here are the key differences between student loan consolidation and refinance:

Private Loan Refinance	Direct Consolidation Loans
Replaces one or more existing loans — federal or private — with a new private loan.	Combines your existing federal student loans into one federal student loan.
Available for federal and private loans, depending on the lender.	Available for federal student loans only.
Interest rates are determined by your credit history and potential market trends. This may result in a lower interest rate.	Your new interest rate will be the result of the weighted average of the interest rates on the loans you're consolidating, so this option does not reduce the amount of interest you’re paying each month.
Credit history will be verified.	Does not require a credit check for approval.
Fixed- or variable-interest-rate loans.	Can consolidate variable rate loans into fixed-rate loans.
Multiple repayment terms are available, often 5 to 20 years.	Consolidation loans offer several repayment options besides the standard 10-year repayment plan and can extend the term of the loan by 12 to 30 years.
Parent PLUS loans can be refinanced under the adult child's name, relieving parents of debt.	Parent Plus loans cannot be consolidated under the adult child’s name.
You lose all benefits associated with federal student loans.	You retain all benefits and protections available to federal student loans.

Student Loan Refinance and COVID-19

CARES Act

The Biden administration announced a further extension on the current suspension of federal student loan payments, interest and collections to December 31, 2022. That relief also applies to defaulted loans, as collections and garnishments have been suspended until that date.

Private student loan forbearance and relief options

PenFed

Borrowers encountering financial concerns with their accounts are encouraged to contact

PenFed’s Financial Hardship Center for further assistance or call 1-800-246-5626

Laurel Road

Full or partial forbearance of 3 monthly payments. Interest will continue to accrue.

For more information on financial assistance, contact the lender’s servicing partner MOHELA at 1-877-292-6845

Splash Financial

Lower rates in response to the economic crisis

Splash Financial encourages clients to reach out directly at (800) 349-3938 so they can negotiate accommodations like forbearance or waiving fees.

Earnest

Short-term interest-only program that allows clients to make lower (interest only) payments for up to 90 days. Borrowers may use this program for a maximum of 18 months

For more information, please refer to the lender’s Repayment Options guide.

Navy Federal Credit Union

Eligible members are eligible for a 3-month forbearance on their student loan payments

The company encourages borrowers to contact their Student Loan Center at 1-877-304-9302 for more information.

For more information, please consult the lender’s Pandemic Relief FAQs section..

Citizens Bank

Discretionary loan payment forbearance. Interest will still accrue.

For more information, please refer to the lender’s Forbearance FAQ.

SoFi

• Payment deferral. • Unemployment protection • The option to request a forbearance period for up to 12 months in 3-month increments (interest will still accrue, and the life of the loan will extend).

For more information, go to the lender’s Unemployment Protection Program guide.

Credible is excluded from this section because it’s a loan marketplace and does not issue loans. As it does not have its own payment relief policy in place, we recommend you refer to the specific loan servicer's platforms for further information.

Latest News on Student Loan Refinance

News coverage on student loans ramped up in light of President Joe Biden’s debt relief program announcement. The basics: borrowers who earn less that $125,000 may qualify for up to $10,000 in loan forgiveness, while borrowers who received a need-based Pell Grant may be eligible for up to $20,000. Here’s what our newsroom has covered so far:

While we still don’t know what the application will look like, you’ll find all we know so far in How to Apply for Biden’s Student Loan Forgiveness Program. We explain the eligibility requirements and what you can do to prepare. The article is continuously updated as more information becomes available.

Just a few weeks before applications open, the Department of Education revised the eligibility requirements of debt cancellation. As of Sept. 29, borrowers with Federal Family Educational Loans (FFEL) and Perkins loans won’t be eligible for one-time debt forgiveness. Initially, the government agency stated that borrowers with these loan types could qualify for debt cancellation if they took additional steps to consolidate the loans into an eligible Direct Loan.

A lawsuit filed in Indiana marks the first legal challenge for Biden’s student loan forgiveness program and legal experts anticipate that it won’t be the last. The complaint argues that the program is unfair for borrowers residing in states that may tax forgiven student loan debt — particularly borrowers who were working towards forgiveness through the Public Service Loan Forgiveness program.

Why Student Loan Forgiveness Could Hurt Your Credit Score explains how debt cancellation can impact your credit score. The negative impact is relatively minor and temporary: you might shorten your credit length history or reduce your credit mix. However, the potential positive impact is substantial: debt forgiveness can reduce your overall debt burden significantly, a factor that constitutes 30% of your FICO score.

Finally, in all the commotion surrounding debt forgiveness, this piece of critical news might get overlooked: the “limited PSLF waiver” that temporarily changed the rules of the Public Service Loan Forgiveness program is set to expire in Oct.31. The waiver corrected several problems that made student loan forgiveness notoriously difficult to get, benefiting thousands of new borrowers. To learn how the waiver works, how to qualify and whether Biden will grant an extension, read Expanded Student Loan Forgiveness for Public Service Workers is Expiring in October.

How We Chose the Best Student Loan Refinance Companies

Loan refinance selection

Some lenders didn’t make our cut because they didn’t offer a full range of refinancing options, such as for ParentPLUS student loans, which was a non-negotiable point in our criteria.

Payment options and fees

We favored companies with flexible payback policies, such as cosigner release and financial hardship relief options for qualified applicants. We also looked for financial institutions that offered refinance loans without charging application or origination fees or even prepayment penalties. Additionally, we favored lenders who offered interest rate reductions for signing up for automatic payments, or autopay programs.

Customer experience

When we researched each company on our shortlist, it was important for us to evaluate whether lenders had an inordinate number of complaints or any ongoing actions with regulatory agencies such as the Consumer Finance Protection Bureau.

Summary of Money’s Best Student Loan Refinance Companies of October 2022

• Credible - Best Student Loan Marketplace
• Splash Financial - Most Affordable Loan Payment Options for Medical Students
• PenFed - Best Credit Union
• Laurel Road - Best Student Loan Consolidation for Medical Students
• Earnest - Best for Customizing Loan Repayment