Student Loan Refinance Calculator
Compare your current student loans with refinancing options. Currently calculating in US Dollar.
Current Loan
Refinanced Loan
Private refinance rates: 3% - 9%
Refinancing Could Save You Money
With the new terms, you could save $2,504 over the life of your loan.
Monthly Difference
-$143
Lower payment
Total Savings
$2,504
You save
Interest Savings
$2,504
Less interest
Federal Benefits
Refinancing federal loans to private means losing income-driven repayment and forgiveness options
Credit Score
Best refinance rates typically require a credit score of 700+
Shorter Terms
Shorter loan terms mean higher payments but less interest overall
Rate Comparison
Get quotes from multiple lenders to find the best rate for your situation
A student loan refinance calculator is a financial tool that helps you evaluate whether refinancing your existing student loans makes financial sense. It compares your current loan terms (balance, interest rate, years remaining) with potential new loan terms to show you the impact on monthly payments, total interest paid, and overall savings. This allows you to make an informed decision about whether to refinance before contacting lenders.
Refinancing means replacing your existing student loans with a new loan from a private lender. This can be beneficial if interest rates have dropped, your credit score improved, or you simply want different loan terms. However, refinancing federal loans comes with trade-offs—you lose access to federal benefits like income-driven repayment plans and loan forgiveness programs. This calculator helps you weigh those considerations.
By visualizing the savings or costs associated with refinancing, you can determine if it aligns with your financial goals and circumstances. Whether you want to save on interest, lower your monthly payment, or pay off your loans faster, this calculator provides the clarity needed to make the right decision for your situation.
Enter Your Current Loan Balance
Input the remaining balance on your student loan(s). If you have multiple loans, you can either enter the total or analyze them separately.
Set Your Current Interest Rate
Enter the interest rate on your current loan. Check your loan documents or servicer statement for the exact APR. Federal loans typically range 4.99%-7.54%, private loans vary widely.
Specify Years Remaining on Current Loan
Enter how many years until your current loan is paid off. You can find this in your loan servicer account or promissory note.
Enter the New Refinance Interest Rate
Input the interest rate you expect to receive from a refinance lender. Get pre-approval quotes from multiple lenders to see realistic rates for your credit profile.
Select the New Loan Term
Choose your desired loan term (5, 7, 10, 15, or 20 years). Shorter terms cost less in total interest but have higher payments. Longer terms have lower payments but cost more overall.
Review Your Refinance Analysis
Check the monthly savings, total savings, and charts to understand the financial impact of refinancing. Adjust inputs to explore different scenarios and find the best option for you.
Monthly Payment Formula:
M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where P is the loan balance, r is monthly interest rate, and n is total payments. This calculates both current and new monthly payments.
Total Interest Calculation:
Total Interest = (M × n) - P
Shows total interest you'll pay with each loan option. The refinance savings come from differences in total interest between current and new loans.
Refinance Savings Calculation:
Total Savings = Current Total Payment - New Total Payment
The difference between what you'll pay with your current loan and what you'll pay with the refinanced loan, accounting for different terms.
Monthly Payment Difference:
Monthly Savings = Current Payment - New Payment
Shows how much your monthly payment will change if you refinance. Negative values mean higher monthly payments with the new loan.
Scenario 1: Aggressive Refinance to Lower Rate
Current Situation:
• Balance: $50,000
• Current Rate: 7.0%
• Years Remaining: 8
Refinance Terms:
• New Rate: 4.5%
• New Term: 8 years
Current Monthly Payment: $608
New Monthly Payment: $608
Total Interest Savings: $8,500+
✓ Lower rate, same payment, save thousands in interest!
Scenario 2: Lower Payments but Extended Term
Current Situation:
• Balance: $45,000
• Current Rate: 6.8%
• Years Remaining: 5
Refinance Terms:
• New Rate: 5.2%
• New Term: 10 years
Current Monthly Payment: $873
New Monthly Payment: $481
Monthly Savings: $392
⚠️ Much lower payment but longer commitment, slightly more total interest
Scenario 3: Pay Off Faster - Shorter Term
Current Situation:
• Balance: $35,000
• Current Rate: 5.5%
• Years Remaining: 10
Refinance Terms:
• New Rate: 4.2%
• New Term: 5 years
Current Monthly Payment: $660
New Monthly Payment: $787
Total Savings: $6,200
✓ Pay off 5 years earlier, save thousands, slightly higher payment
Scenario 4: When Refinancing Doesn't Make Sense
Current Situation:
• Balance: $30,000 (federal loan with PSLF eligibility)
• Current Rate: 6.5%
• Years Remaining: 3
Refinance Terms:
• New Rate: 5.8%
• New Term: 5 years
Total Savings: ~$900
✗ Minimal savings, lose PSLF eligibility and federal protections
- •Don't Refinance Federal Loans Lightly: Refinancing federal loans to private means losing income-driven repayment, deferment/forbearance, loan forgiveness, and other protections. Only refinance if the savings clearly justify these losses.
- •Check Your Credit Score First: Refinance rates are tied to your credit score. Before applying, check your score. If it's below 650, wait 6-12 months to improve it—better credit means better rates.
- •Get Multiple Pre-Approval Quotes: Different lenders offer different rates. Getting quotes from 3-5 lenders within a short time window counts as one credit inquiry. Compare rates and terms before deciding.
- •Shorter Terms Save More Interest: A 5-year refinance costs less in total interest than a 10-year, even though monthly payments are higher. If you can afford the higher payment, shorter terms are more economical.
- •Consider Only Private Loans for Refinancing: If you have private student loans from banks or lenders, refinancing is usually a straightforward financial decision. You likely don't have federal protections to lose.
- •Watch for Hidden Fees: Ask about origination fees, application fees, and prepayment penalties. These can offset refinancing savings, especially on smaller loan amounts.
- •Calculate Break-Even Time: If refinancing involves costs, calculate when you'll break even. If you'll move in 2 years, the break-even might be longer than you'll keep the loan.
What happens to my original loan if I refinance?
The new lender pays off your original loan in full. You then owe the new lender instead. Make sure the payoff is processed correctly and your original loan is closed to avoid confusion.
Will refinancing hurt my credit score?
Getting pre-approval quotes causes a hard inquiry that temporarily lowers your score by 5-10 points. However, closing the old loan and opening a new one improves your credit mix. Overall impact is usually minor and recovers within months.
What's the minimum rate reduction to justify refinancing?
Generally, a 1% rate reduction is enough to justify refinancing, especially if you have no fees. With fees, you may want 1.5-2% reduction to break even. Use this calculator to see if savings justify any costs.
Can I refinance if I have federal student loans?
Yes, you can refinance federal loans to private loans. However, you lose federal protections like income-driven repayment, deferment, forbearance, and forgiveness programs. Only refinance if the savings justify these losses.
How long does the refinancing process take?
Typically 3-7 business days from application to funding. Once the new lender pays off your original loan, you start making payments to them. Make at least one payment to your original lender to ensure clean transition.
What if my income is unstable—should I refinance?
If you have federal loans with income-driven repayment, refinancing removes this protection. If your income is unstable, keep federal loans and their flexible repayment options. Private loan terms are fixed regardless of income changes.
Can I refinance multiple loans into one?
Yes, many refinance lenders allow consolidating multiple loans into one. This simplifies your finances but means all loans move to private (losing federal protections if any were federal). It can also lock in a single interest rate across all loans.
What if I can't qualify for refinancing?
Most lenders require 650+ credit scores. If you don't qualify, focus on improving your credit score (takes 6-12 months), paying down other debts, and increasing your income. Check back in 6-12 months for better rates.
Federal vs. Private Loan Refinancing
Federal Loan Refinancing: Requires careful consideration because you lose federal protections. Only worthwhile if rate reduction is significant (1.5%+) AND you don't rely on income-driven repayment or forgiveness programs like PSLF.
Private Loan Refinancing: Usually straightforward. Private loans have no special protections to lose, so any rate reduction is beneficial. This is the ideal refinancing candidate.
How Credit Score Impacts Refinance Rates
Your credit score is the primary factor lenders use to determine refinance rates:
- • 760+: Best rates available (3-5% APR range)
- • 700-759: Good rates (5-6% APR range)
- • 660-699: Fair rates (6-7% APR range)
- • Below 660: Limited options, higher rates or may not qualify
A 50-point credit improvement can save 0.5% on your rate, equating to $2,000+ in savings on a $40,000 loan.
The Refinancing Process Step-by-Step
1. Get Pre-Approved: Apply with 3-5 lenders to compare rates (counts as one inquiry within 14 days).
2. Review Offers: Compare APR, term options, fees, and customer service before choosing.
3. Complete Full Application: Provide income verification, employment history, and bank statements.
4. Underwriting & Closing: Lender verifies information and prepares closing documents. Funds are sent to pay off original loan within 3-7 days.
Refinancing Fees and Costs
Some lenders charge refinancing fees that reduce savings:
- • Origination Fees: 0.5-2% of loan amount, deducted from disbursement
- • Application Fees: Usually $0 but some charge $50-200
- • Prepayment Penalties: Rare but check your current loan
- • No-Fee Options: Many lenders offer fee-free refinancing
A $40,000 loan with a 1% origination fee costs $400 upfront, but if it saves $2,000 in interest, you still come out $1,600 ahead.
Break-Even Analysis for Refinancing
Calculate when refinancing pays for itself with this simple formula:
Break-Even Months = Refinancing Costs ÷ Monthly Savings
Example: $400 in fees ÷ $50 monthly savings = 8 months to break even. If you'll keep the loan at least 8 months, refinancing makes sense.
Public Service Loan Forgiveness (PSLF) Considerations
If you work in public service and have federal loans:
- • DO NOT refinance federal loans if you're pursuing PSLF
- • Refinancing to a private loan disqualifies you permanently from PSLF forgiveness
- • PSLF forgives remaining balance tax-free after 10 years of qualifying payments
- • On a $60,000 loan, PSLF could save $20,000+ in forgiveness—far more than refinancing savings
Income-Driven Repayment and Refinancing
If you rely on income-driven repayment plans (PAYE, IBR, INCOME-BASED, or ISR):
- • Refinancing federal loans to private removes this protection
- • Private loans have fixed payments regardless of income changes
- • If you have variable or unstable income, keeping federal loans with income-driven plans is safer
- • Only refinance if you can afford fixed private loan payments through any income changes
Strategies for Maximizing Refinancing Benefits
Wait for Rate Drops: If federal or market rates are historically high, wait for potential drops. However, don't time the market—refinance when savings make sense.
Improve Your Credit First: Delay refinancing 6-12 months to improve credit score. Every 50-point increase saves 0.25-0.5% in rates.
Pay Down Other Debt: Lower credit utilization and debt-to-income ratios before refinancing. This can improve your approval odds and rates.
Choose Shorter Terms: If you can afford it, choose shorter terms (5-7 years) for maximum interest savings rather than longer terms for lower payments.
When NOT to Refinance
Refinancing federal loans is NOT advisable if:
- • You're pursuing PSLF or other forgiveness programs
- • You rely on income-driven repayment options
- • Your credit score is below 650 (you won't qualify for good rates anyway)
- • You're expecting financial hardship within 2-3 years
- • Rate difference is less than 1% and you have no federal benefits to lose
Explore More Tools
Discover other calculators in Loans & Mortgages to help with your financial planning
Mortgage
Calculate monthly mortgage payments and total interest
Mortgage Refinance
See if refinancing makes sense for you
Personal Loan
Estimate personal loan payments
Home Affordability
Find out how much house you can afford
Auto Loan
Calculate car loan payments
Car Affordability
Find out how much car you can afford