How Often Can You Refinance Student Loans?

How Often Can You Refinance Student Loans

 BIG Ideas:

  • Refinancing allows you to replace or other private student loans with a single, new private loan.
  • There’s no limit to how often you can refinance, but you will need a good credit score or a co-signer with good credit to qualify for a loan.
  • Refinancing federal student loans with a private loan will result in the loss of federal benefits like income-driven repayment and loan forgiveness.

Whether it’s cheap airfare or a sweet deal on pizza, it’s a great feeling to save money. It’s especially great to save on your student loans, which can take a big piece out of your budget pie, especially if your career is young and you haven’t reached your full earning potential.

According to the EducationData.org, per borrower may exceed $40,000. If you’re weighed down by high-interest student loan debt, there’s a way to get some relief: refinancing with a private loan.

Refinancing can help you lower your monthly payments, reduce the interest you pay overall, and in some cases, even pay off your loans sooner. Imagine that!

So when should you refinance?

Well, the good news is that refinancing doesn’t have to be a one-and-done deal. If you refinance and rates drop, you can do it again … and again. There’s usually no cost involved.

The pros of refinancing student loans

There are many benefits to refinancing student loans. You can lower your interest rate and maybe even save hundreds, if not thousands of dollars, over the life of your loan. You can also match your monthly payment to your budget.

For example, you could extend the term of your loan to lower your monthly payments or shorten the term to pay even less interest. Plus, instead of paying multiple bills each month, you’ll have just one bill.

The cons of refinancing

There are also some disadvantages of refinancing, including the loss of some federal loan protections like income-driven repayment and Public Service Loan Forgiveness when you refinance federal student loans with a private lender.

You also need to have good credit to qualify and get the best possible rate to make a difference. And speaking of credit, every time you apply for a refinance loan, lenders make a hard inquiry on your credit, which can lower your credit score. Refinancing will also reduce the average age of your loans, which could further lower your score.

Will refinancing work for you?

When determining if refinancing makes sense for you, you should, at least, consider:

  • The current interest rates offered by private lenders and the interest on all your student loans.
  • If you have a strong credit score to qualify for the loan and get a rate that makes a difference in your payments. If you don’t have strong credit, you could apply with a co-signer.
  • Whether federal loan benefits (income-driven repayment and loan forgiveness) are important to you.
  • If a specific lender charges a fee for refinancing. Some do, so read the fine print carefully.

Brazos is Here to Help You Save on Student Loans

For more than 40 years, Brazos Higher Education has been helping make education more affordable for students. As a Texas non-profit, we offer great rates and no fees on refinance loans to help you save money and build the financial future you worked so hard to build. Contact us to learn more.