lowest student loan refinance rates

The Best Student Loan Refinance Rates

Michael Lux Blog, Consolidation, Interest Rates, Refinance, Student Loans 0 Comments

With well over a trillion dollars in student loan debt in the United States, it is no surprise that new lenders continue to pop up in the refinance marketplace.  Finding the lender offering the lowest interest rates can be tricky.  The vast majority of companies only advertise their lowest rate, but this rate applies to customers looking for a five year variable-rate loan.  This information is not very useful if you are looking for a 20 year fixed-rate loan.

To make shopping lenders a little easier, we searched the entire student loan marketplace and ranked the lenders offering the best rates in various categories of loans.  These loans include fixed-rate and variable-rate loans and 5, 7, 10, 15, and 20 year loan terms.  For each rate category, we have included some tips and lender notes for perspective borrowers.

The Lowest Student Loan Refinance Rates

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1ELFI2.39%$15,000 – No MaxELFI ReviewApply
2LendKey2.67%$150$7,500 – $250,000LendKey ReviewApply
3Citizen's Bank2.87%$200*$10,000 – $170,000Citizen's Bank ReviewApply*

To get the very lowest advertised student loan refinance rates you will need good credit and a good debt-to-income ratio.  You will also have to be willing to accept a 5 year variable-rate loan.  Paying back the loan in only five years is an aggressive route, but it is the best way to minimize spending on interest.  The risk with this option is that payments could conceivably go up.  However, by having such a short loan term, the hope is that the loan is paid off in full before interest rates make a measurable jump.

The Best 7 Year Variable Rate Loans and Lenders

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1ELFI2.55%$15,000 – No MaxELFI ReviewApply
2SoFi3.115%$150$10,000 – No MaxSoFi ReviewApply
T-3CommonBond3.12%$150$5,000 – No MaxCommonBond ReviewApply
T-3Laurel Road3.12%$150$5,000 – No MaxLaurel Road ReviewApply

By extending your repayment length to seven years, minimum monthly payments will take a noticeable dip, but the interest rates are only slightly higher.  The advantage is more flexibility.  The disadvantage is that you have to hope interest rates stay low for even longer.

ELFI offers the best 7-year rate by a significant margin over the rest of the lenders in the market place.  However, if you choose not to go with ELFI, shifting your focus to the LendKey fixed-rate option could be a good idea as the interest rate starts at 3.57%, making it very competitive with the variable-rates offered by other lenders.

The Best 10 Year Variable Rate Loans and Lenders

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1ELFI3.05%$15,000 – No MaxELFI ReviewApply
2Citizen's Bank3.38%$200*$10,000 – $170,000Citizen's Bank ReviewApply*
3LendKey3.58%$150$7,500 – $250,000LendKey ReviewApply

An entire decade is a long time to carry a variable interest rate student loan.  However, if you made the decision to get a variable-rate loan 10 years ago, you likely would have done better than someone with a fixed-rate loan over that same period of time.

Scrolling down to the fixed-rate 10 year loans, you will see that the interest rates start at about 1% higher.  If you are looking for a ten year loan, you will have to weigh the stability of the fixed-rate option against the lowest possible rates offered by the variable loans.

We should also point out that many lenders do offer a 15 and 20 year variable rate loan.  These loans do not appear on this page because we think a variable-rate loan over such a long duration would be a mistake.  With interest rates currently at or near historic lows, it makes far more sense to lock in a low fixed-rate loan for extended repayment options.

The Best Fixed Rate Refinance Loan Companies

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1ELFI3.19%$15,000 – No MaxELFI ReviewApply
2LendKey3.25%$150$7,500 – $250,000LendKey ReviewApply
T-3SoFi3.35%$150$10,000 – No MaxSoFi ReviewApply
T-3CommonBond3.35%$150$5,000 – No MaxCommonBond ReviewApply

If you want the lowest possible rate and the certainty that it will not increase, the 5 year fixed-rate loan is the way to go.  With most lenders, the fixed rate loan is about .5% higher.  Consider that the price of interest rate stability.

The Best 7 Year Fixed Rate Loans

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1LendKey3.57%$150$7,500 – $250,000LendKey ReviewApply
2ELFI3.85%$15,000 – No MaxELFI ReviewApply
3CommonBond3.87%$150$5,000 – No MaxCommonBond ReviewApply

A seven year fixed-rate loan is a popular option for recent graduates who want to be rid of student loan debt by age 30.  With interest rates offered well below 4%, this loan duration is an opportunity for borrowers to lock in lower interest rates and potentially reduce monthly payments as well.

The Best 10 Year Fixed Rate Loans

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1LendKey4.25%$150$7,500 – $250,000LendKey ReviewApply
2CommonBond4.37%$150$5,000 – No MaxCommonBond ReviewApply
3SoFi4.375%$150$10,000 – No MaxSoFi ReviewApply

This could be a great option for borrowers working towards public service loan forgiveness with their federal loans, but looking for the most efficient way to pay off their private loans.  These borrowers can get their federal loans started towards PSLF and refinance their private loans to spend as little as possible and get them paid off in the same ten years.

The Best 15 Year Fixed Rate Loans

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1CommonBond4.87%$150$5,000 – No MaxCommonBond ReviewApply
2SoFi4.875%$150$10,000 – No MaxSoFi ReviewApply
T-3ELFI4.89%$15,000 – No MaxELFI ReviewApply
T-3Citizen's Bank4.89%$200*$10,000 – $170,000Citizen's Bank ReviewApply*

Extending your repayment length out to 15 years has a couple major consequences.  The good news is that your monthly payments will be much lower compared to a 5 year loan term.  The bad news is that the lowest interest rate you will be able to get currently hovers at just under 5%.

The Best 20 Year Fixed Rate Loans

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1ELFI5.09%$15,000 – No MaxELFI ReviewApply
2Citizen's Bank5.14%$200*$10,000 – $170,000Citizen's Bank ReviewApply*
3Laurel Road5.15%$150$5,000 – No MaxLaurel Road ReviewApply

Twenty years is that maximum repayment length offered by most refinance companies.  Even though these rates are almost double the rates of a five year variable-rate loan, at just over 5% they still represent an opportunity for many borrowers to get a much lower interest rate on their student loans.  This is usually the option for the lowest possible monthly payment.

It is also worth pointing out that the interest rate difference between the 15 year fixed and the 20 year fixed is quite small.  The very slight increase in interest rate gives you five extra years to pay back your loan.  Additionally, borrowers on a 20 year repayment plan are still allowed to pay their loan off early.  Opting for a 20 year plan provides the most flexibility for this reason.  Borrowers can pay off their loan aggressively, but when cash is tight, they have the safety of a much lower minimum monthly payment.

The Best Student Loan Consolidation Rates

Many borrowers and lenders use the terms refinance and consolidation interchangeably.  If you are looking for a private lender to consolidate your student loans, the refinance rates are the same as the consolidation rates.

However, some borrowers define consolidation as the process of combining federal loans with the federal government.  Federal student loan consolidation is a separate process done through the government.  Going through federal consolidation will not lower your interest rates as the government uses a weighted average of your existing loans.  However, federal consolidation can help some government loans gain eligibility for federal programs such as Public Service Loan Forgiveness.

Lowering Federal Student Loan Interest Rates

If you are looking to refinance your federal student loans with a private lender, the rates displayed on the various tables on this page will apply to all of your lenders.  The private lenders do not draw a distinction between federal student loans and private student loans.

However, it is important to proceed with care when refinancing federal loans with a private lender.  The advantage is lower interest rates, but the disadvantage is that you lose the perks that go with federal loans such as income-driven repayment plans and student loan forgiveness.  Because there is no way to undo a student loan refinance, it is critical to be certain that you are willing to give up the federal perks before proceeding.  Many borrowers choose to just refinance their high interest private loans and then revisit the option to refinance federal loans at a later date.

Finding the Lowest Refinance Rate

If you know the loan type and duration that you are looking for, you can just work your way through the top lenders in your desired category.  If the lender in first place doesn’t offer you their lowest rate, send in an application to lenders two and three.  This form of shopping around does not hurt your credit score and it is the best way to ensure that you are finding the best deal.  Because each lender evaluates their applications slightly differently, it is entirely possible that the lender with the 3rd lowest advertised rate offers the best actual rate.  If you reach out to the top lenders in your category and none of them offer a rate near the lowest, it might be time to broaden your search.  Our complete list of student loan refinance lenders should help in this endeavor.

Finally, if you are disappointed by the fact that you can only slightly improve your rates now, keep in mind that you can always refinance again later.  For the average borrower, their credit score and income is at rock bottom when they first apply for their student loans.  Once school is done, the credit score and income have increased, making refinancing a viable option.  As time progresses, the credit score and debt-to-income ratio continue to improve.  This is the reason that many borrowers take advantage of the fact that there is no limit to the number of times you can refinance your student loans.

*Note: We recommend applying to Citizen’s through the Credible platform because it allows borrowers to check their rates with multiple lenders and offers a $200 bonus.