7 Best Student Loan Refinance Companies of 2023

Are you one of the 43.4 million college graduates with an average of more than $40,000 in student loan debt? A student loan refinance may be your best opportunity to get better control of that debt.

Our list of the seven best student loan refinance lenders for 2023 is designed to help you do just that, as each offers multiple refinance options at a wide variety of interest rates.

The table below provides a summary of the main features offered by each lender. You can then scroll down and read our summary reviews with more information on the ones that interest you.

Our Picks for Best Student Loan Refinance

Here’s our list of the seven best student loan refinance lenders for October 2023:

• SoFi – Comprehensive Financial Services

• CommonBond – Generous Forbearance Period

• Earnest – Option to Skip Payments

• Splash Financial – Online Marketplace

• College Ave – Low Minimum Balance

• LendKey – In-house Loan Servicing

• PenFed Credit Union – Low Variable Rates

Best Student Loan Refinance – Company Reviews

Best for Comprehensive Financial Services: SoFi

Minimum/maximum loan amount: $5,000 to a maximum amount of student debt owed
Minimum credit score requirement: 650
Loan terms: 5, 7, 10, 15, or 20 years
Fixed rates: 4.99% to 9.99% APR
Variable rates: 5.99% to 9.99% APR
Upfront fees:  None

SoFi has become practically synonymous with student loan refinancing because that was the company’s original product. Despite adding additional services, it’s still at the top of the class.

Refinances start at 2.49% and run as long as 20 years. You can refinance the full amount you owe on your current student loans.SoFi now also offers almost every imaginable financial service.

This can be important for young adults starting out in life who need other services in addition to student loan refinances. That includes banking, investments, personal loans, credit cards, and insurance.

Best for Generous Forbearance: CommonBond

Minimum/maximum loan amount: $5,000 to $500,000
Minimum credit score requirement: 680
Loan terms: 5, 7, 10, 15, or 20 years
Fixed rates: 2.98% to 5.79% APR
Variable rates: 1.99% to 5.61% APR
Upfront fees: None

CommonBond is a direct lender offering student loan refinancing of up to $500,000. The company offers student loan refinances to borrowers in 48 states (Mississippi and Nevada are the exclusions).

It also stands out as having what’s probably the most generous forbearance program in the industry at 24 months (most lenders offer only 12).

However, you should be aware that, at 680, Commonbond has the highest minimum credit score requirement of the lenders on this list.

Best Option to Skip Payments: Earnest

Minimum/maximum loan amount: $5,000 / $500,000
Minimum credit score requirement: 650
Loan terms: 5 to 20 years
Fixed rates: 4.96% to 8.99% APR (with Autopay discount)
Variable rates: 4.99% to 8.94% APR (with Autopay discount)
Upfront fees: None

Student Loan Refinance Interest Rate Disclosure

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.21% APR to 9.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.24% APR to 9.19% APR (excludes 0.25% Auto Pay discount). 

Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. 

The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. 

The maximum rate for your loan is 9.13% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.21%. For loan terms over 15 years, the interest rate will never exceed 9.24%. 

Please note that we are not able to offer variable-rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit-qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

Earnest offers some of the highest refinance amounts in the industry. But what we like best about this lender is that it gives you the option to skip one payment every 12 months.

While there are certain requirements to take advantage of this feature, it can be a good option to have available.

One limitation you should be aware of is that Earnest doesn’t allow adding a cosigner. That can hurt your chance of approval, as well as the possibility of getting a lower interest rate.

Best Online Marketplace: Splash

Minimum/maximum loan amount: $5,000 / no limit
Minimum credit score requirement: Varies by lender
Loan terms: 5, 7, 10, 15, or 20 years
Fixed rates: 4.72% to 9.24% APR
Variable rates: Starting at 4.84% APR
Upfront fees: None

Splash Financial is an online loan marketplace. After completing just one brief online application, you can get loan quotes from multiple lenders at once.

Aside from being time-saving, this also allows you to easily compare offers and select the best loan and interest rate.

Splash offers the lowest fixed rates of any lender on this list. It also has the advantage of having no maximum loan amount. Much like SoFi, it will enable you to refinance the full amount of your outstanding student loan debt.

Best Low Minimum Balance: College Ave

Minimum/maximum loan amount: $1,000 / $150,000; $300,000 for medical school grads
Minimum credit score requirement: “Proprietary”
Loan terms: 5, 8, 10, or 15 years
Fixed rates: 4.74% to 15.72% APR
Variable rates: 4.74% to 15.72% APR
Upfront fees: None

College Ave provides student loans but with lower maximum loan amounts than other lenders. The maximum loan term is also shorter, at 15 years.

But where College Ave stands out is that it provides the smallest minimum loan balances. The company will refinance as little as $1,000 in student loan debt, whereas other lenders will not go below $5,000.

Best for In-House Loan Servicing: LendKey

Minimum/maximum loan amount: $5,000 / $125,000; $250,000 for graduate degrees
Minimum credit score requirement: 660
Loan terms: 5 – 20 years
Fixed rates: 2.49% to 7.75% APR
Variable rates: 1.90% to 5.25% APR
Upfront fees: None

Much like Splash Financial, LendKey is an online student loan marketplace where you can get an array of quotes from multiple lenders. However, unlike similar marketplaces, the company maintains servicing of your loan once it closes.

Unfortunately, it has relatively low maximum loan amounts, which could potentially exclude those borrowers in the greatest need of refinancing.

Best for Low Variable Interest Rates: PenFed Credit Union

Minimum/maximum loan amount: $7,500 / $300,000
Minimum credit score requirement: 670
Loan terms: 5, 7, 10, 12, or 15 years
Fixed rates: 3.97% to 11.89% APR
Variable rates: 1.47% to 9.05% APR
Upfront fees: None

PenFed Credit Union is a credit union that offers low variable-rate loans through a partnership with Ascent, a company dedicated to providing student loans. Those loans are available for both undergraduate and graduate degrees.

An important limitation to note is that the student loans offered are consolidations, not refinances, which we will discuss further in this guide.

You should also be aware that the low-interest rates advertised, which are among the lowest in the industry, are offered to applicants with cosigners.

Student Loan Refi Guide

There’s much to know about how student loans work, including when they can be used and when they can’t.

Even if you’ve chosen a lender from among the best student loans available, sometimes your circumstances change — and you may want to take advantage of a bump in your credit score to refinance for a lower rate.

What Is Student Loan Refinance?

A student loan is just like any other type of loan, except it’s designed specifically to finance school loans for higher education.

As the name implies, student loan refinances are limited to refinancing school-related debt only. You can include loans from public and private lenders, as well as parent plus loans.

You won’t be able to include non-student loan-related debt, such as car loans and credit card debt, that you accumulated during your years in college.

Further, most lenders will require that you have completed your degree, and it may be difficult to find one willing to refi associate degrees.

Fixed vs Variable Rates

You’ll have noticed that the table at the top of this page (and each individual review) has information regarding both fixed and variable annual percentage rates or APRs.

APRs represent the cost you spend each year to borrow money. While shown as a percentage, it’s a little bit different than your interest rate since it also includes any fees you pay.

As the name says, a fixed-rate student loan has the same interest rate over the life of the loan, so you know exactly how much you’ll pay every month.

Variable-rate loans, then, have rates that change according to the market conditions of whichever index the lender uses — and they’re only offered by private lenders, who add an additional percentage called the margin.

Both types of loans have advantages and disadvantages. Fixed-rate loans are predictable and easy to plan your budget around. Loans with variable APRs often start at lower rates than fixed ones, but they always carry an element of risk since your rate can always increase.

Requirements

Since it is a refinance, qualifying will generally depend on employment, credit, and annual income requirements.

However, many lenders do allow adding a qualified cosigner if you can’t qualify on your own or you want to take advantage of your cosigner’s higher credit score.

If you’ve been wondering why check your credit report regularly? you should know it’s always a good idea to stay on top of your credit. Since your score changes continuously, you’ll need to monitor it to know exactly where you stand before making an application for a refinance.

You should be aware that applying for a refinance will require a hard credit check, similar to any other major financial commitment.

While this will lower your score overall for about a year or so, if all your hard credit pulls are within a 14-day time frame, the credit bureaus will count them as one.

Also, see whether the lenders you choose offer prequalification since this will give them an idea of your creditworthiness with just a soft check.

Credit scores are a major component of the student loan approval process and its eligibility requirements.

When you apply, your lender will approve or deny you based, in part, on whether they determine you have a good credit score and your debt-to-income ratio. Each lender will set its own minimum credit score requirement.

Not only is approval heavily based on your credit score, but so is your interest rate.

When you’re looking into different refinancing options,  check if they offer any perks or loan benefits such as rate discounts (autopay discounts for automatic payments are fairly common) or unemployment protection — and, conversely, whether they have any prepayment penalties.

How to Refinance a Student Loan

First, you’ll need to submit an application that includes information on your employment, whether you’re a U.S. citizen, your minimum income, assets, credit history, and other relevant financial disclosures.

Second, you’ll also need to submit a complete list of all student loan debts you want to include in the refinance.

The loan application process is similar to that for any other type of loan. But it’s naturally more complicated by the fact that many applicants have very large student loan balances to refinance, sometimes over 100K in student loan debt.

A debt of that size may require you to add a qualified cosigner unless your income is high enough to carry the loan by yourself.

Cosigner release. If you’re going to refinance your student loan and you’ll be using a cosigner to help you qualify, be aware of the new lender’s policy on cosigner release. The policy will vary for each lender. They’ll typically require 24 to 36 months of on-time payments.

Student Loan Refinance Costs

Virtually none of the seven best student loan refinance lenders for 2023 we’ve provided in this guide charge upfront lender fees, such as application and origination fees.

Since there are so many high-quality lenders providing no-fee refinances, you should be able to easily avoid any lender that charges them.

While legitimate lenders don’t charge upfront fees, they do typically have late fees for student loan payments that are behind.

These can be based on either a flat fee, a percentage of the payment, or some other metric. Some lenders may also have prepayment penalties if you pay off some or all of your loan early.

Watch out for student loan scams! One of the very best ways to know if a student loan offer is a scam is when a lender insists on the payment of fees before your loan closes.

It’s a strong indication the “lender” intends to keep your money without providing the promised loan proceeds. Also, beware of overly generous promises, like a guarantee of a loan from a questionable source.

Never respond to an unsolicited offer to refinance your student loans. A typical red flag is being asked to provide sensitive personal and financial information, like your Social Security number, credit card information, or your bank account number.

These are what are known as phishing schemes, and they’re designed to gain access to your financial accounts.

Student Loan Refinance During COVID-19

Due to the coronavirus pandemic, the federal government ordered a pause on student loan repayments.

Back in December 2021, President Joe Biden extended the deferment until May 1, 2022. There’s been no official announcement of an additional extension or of student loan forgiveness initiatives.

If you’re unable to service your loan, most lenders do offer some form of forbearance options. You’ll need to apply for the program with your lender and demonstrate the cause of your hardship.

A common forbearance arrangement is a suspension of payment for up to 12 months. This will usually be granted in three-month increments, requiring you to prove the hardship each time.

Forbearance is not automatic upon application. In fact, the requirements can be quite strict.

For example, SoFi requires that you must have lost your job involuntarily, which is a common requirement. They may also refuse forbearance if you’ve had any late payments on your loan.

In another common provision, the forbearance will be reported to the credit bureaus, which may affect your credit score.

If forbearance is required, you should know that interest will continue to accumulate on your loan, even while payments are not required. This means the principal amount of your loan will increase during forbearance.

Is Refinancing Better Than Consolidating Student Loans?

Refinancing is when you take an entirely new loan at a new and hopefully lower interest rate and with repayment terms that will fit comfortably within your budget and financial planning timeline.

Consolidating also involves a new loan to pay off all your existing education loan debts. But rather than giving you a new interest rate, the process instead applies the average of the interest on your existing debts to the new loan.

Its main purpose is to enable you to consolidate multiple loans under a single loan but without necessarily providing a price advantage.

For example, let’s say you have five student loans you’re trying to refinance. If the average interest rate on all five loans is 7%, the consolidation loan will pay off all five loans with an interest rate that’s also 7%.

Whether refinancing or consolidating student loans is the better strategy depends on the cost of your existing debts.

If the interest rates on your outstanding loans are lower than the current prevailing rates, consolidation will be a better strategy. The average of the rates you’re paying on the various loans will be lower than what you can get on a refinance.

But if current interest rates are lower than those on your existing student loans, refinance is a better choice.

How We Found the Best Student Loan Refinance

To come up with our list of the seven best student loan refinancing companies for 2023, we considered the following criteria:

• Minimum/maximum loan amount: In most cases, we included the lenders with the highest possible loan limits.

• Minimum credit score requirement: Though we prefer those with the lowest score requirements, the student loan space does require higher scores than some other loan categories.

• Loan terms: The more options and the longer the terms, the higher the rank.

• Fixed rates: Giving preference to those lenders with the lowest fixed rates.

• Variable rates: Giving preference to those lenders with the lowest variable rates.

• Upfront fees: As you can see from our list, we selected those lenders with no upfront fees.

Summary of the Best Student Loan Refinance Companies

Here is a recap of the seven best student loan refinance companies for 2023:

• SoFi – Comprehensive Financial Services

• CommonBond – Generous Forbearance Period

• Earnest – Option to Skip Payments

• Splash Financial – Online Marketplace

• College Ave – Low Minimum Balance

• LendKey – In-house Loan Servicing

• PenFed Credit Union – Low Variable Rates

The sooner you refinance, the sooner you’ll get the benefit of the lower interest rates that will make your monthly payments more comfortable and enable you to get out of debt quickly.

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