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Should I Refinance My Navient Loans?

Refinancing Navient loans hopefully means lower interest rates and better service, but it isn’t always the best decision.

Written By: Michael P. Lux, Esq.

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Dealing with Navient is a headache for many student loan borrowers.

To some borrowers, refinancing Navient loans seems like the answer to their problems. The idea of taking their student loan business elsewhere AND getting a lower interest rate sounds like a no-brainer.

Unfortunately, refinancing isn’t the best approach for all Naivent borrowers. In some instances, it can be a huge mistake.

When Refinancing Navient Loans Makes Sense

To refinance wisely, borrowers need two things to come together: opportunity and strategy. Determining whether or not refinancing is a good idea is relatively simple.

  • Strategy – A refinance only makes sense if it saves money. For private student loan borrowers, the question is simple: can I get a lower interest rate elsewhere? If the answer is yes, a refinance strategy makes sense. For federal student loan borrowers, the question is a bit more complicated. Programs like income-driven repayment and Public Service Loan Forgiveness can be great resources. If borrowers need these federal perks, dealing with Navient may be a necessary evil. If borrowers won’t ever use the perks that go with federal loans, opting for a lower interest alternative can make sense.
  • Opportunity – Refinancing is a great option, but not everyone can do it. Lenders like Laurel Road and SoFi offer interest rates starting at about 2%, but the catch is that prospective customers need to have a decent income and credit score. For these lenders to make money on their low-interest loans, they must be sure that borrowers will pay it back in full. The good news for borrowers is that each lender evaluates applications differently. Several lenders may see you as a bad bet and reject your application, but it only takes one lender to see you as a good investment. For this reason, borrowers interested in refinancing should check out rates with at least 3 or 4 of the many student loan refinance companies.

Borrowers looking to remove a cosigner from their Navient loan may also consider refinancing. Navient offers a traditional cosigner release process, but refinancing is often a quicker and more efficient approach.

Will Navient Make Refinancing Difficult?

Jaded borrowers might suspect that Navient will try to make the refinance process as difficult as possible. The good news is that there is very little Navient can do to stand in the way. Most refinance lenders handle the payoffs to old lenders so that the borrowers have to do very little.

In short, when you refinance, dealing with Navient becomes your new lender’s problem.

Does Navient Refinance Student Loans?

In the past, Navient did not provide any student loan refinance services.

However, Navient does now offer refinancing to some borrowers through NaviRefi. Unfortunately, this service is limited to select borrowers invited to participate.

Earnest makes the NaviRefi loans. Earnest is the student loan company recently acquired by Navient. As a refi lender, Earnest has a reputation as one of the better student loan refinance companies, but it isn’t clear that the NaviRefi loans offer the same rates as Earnest. Unlike nearly all other refinance lenders, NaviRefi doesn’t advertise the interest rates they offer.

Borrowers considering a NaviRefi loan should also consider the many other companies do offer this service. Navient cannot prevent you from refinancing your student loans elsewhere.

Bottom Line

Dealing with Navient can be a headache. For some borrowers, refinancing can bring an end to dealing with Navient.

This financial move can save a small fortune in interest and get student loans paid off much faster. However, a student loan refinance only makes sense in certain circumstances. Borrowers need to carefully evaluate their options before taking the plunge. Once refinanced, there is no going back.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

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