Lowest Student Loan Refinance Rates

The Best Student Loan Refinance Rates

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

Article Updated November 3, 2019, to reflect the latest available interest rate information.

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’ve scanned 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 prospective borrowers.

The Lowest Student Loan Refinance Rates

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1SoFi1.81%$150$5,000 – No MaxSoFi ReviewApply
2Laurel Road1.99%$150$5,000 – No MaxLaurel Road ReviewApply
3LendKey2.01%$150$5,000 – $300,000LendKey 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.

At present, we have several top lenders within a fraction of a percent of the best rate. This isn’t a surprise as there is a lot of competition to have the lowest advertised rates on the market. While this may be good news for borrowers looking for a 5-year variable rate loan, those that need a longer loan or a fixed-rate would be wise to keep scrolling to see how the competition shakes out in a more desired loan type.

Seven-Year Variable-Rate Loans and Lenders

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1MEFA3.33%$200*$10,000 – No Maxmefa ReviewApply*
2ELFI3.47%$150$15,000 – No MaxELFI ReviewApply
3CommonBond3.53%$150$5,000 – $500,000CommonBond ReviewApply

By extending your repayment length to seven years, borrowers may think that the interest rate will only jump slightly. Sadly, this does not always prove to be the case. The 5-year loan is always the lowest advertised rate, so lenders will keep this rate as low as possible to appear competitive. The same factors do not apply to a 7-year loan. As a result, borrowers seeking a variable-rate loan are often better off with a 5-year loan or a 10-year loan.

Ten-Year Variable-Rate Loans and Lenders

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1Citizen's Bank3.93%$200*$10,000 – $170,000Citizen's Bank ReviewApply*
2ELFI3.98%$150$15,000 – No MaxELFI ReviewApply
3Laurel Road4.00%$150$5,000 – No MaxLaurel Road ReviewApply

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

Scrolling down to the fixed-rate 10-year loans, you will see that the interest rates start at about the same amount. If you are looking for a ten-year loan, you will have to weigh the stability of the fixed-rate option against the possibility that rates drop with a variable-rate loan.

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 prolonged 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
1ELFI3.14%$150$15,000 – No MaxELFI ReviewApply
2CommonBond3.21%$150$5,000 – $500,000CommonBond ReviewApply
T-3Citizen's Bank3.45%$200*$10,000 – $170,000Citizen's Bank ReviewApply*
T-3Earnest3.45%UnknownEarnest 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 than a 5-year variable-rate loan. Consider that the price of interest rate stability.

Seven-Year Fixed-Rate Loans

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1MEFA3.60%$200*$10,000 – No Maxmefa ReviewApply*
2ELFI3.72%$150$15,000 – No MaxELFI ReviewApply
3Citizen's Bank3.77%$200*$10,000 – $170,000Citizen's Bank 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 around 4%, this loan duration is an opportunity for borrowers to lock in lower interest rates and potentially reduce monthly payments as well.

Ten-Year Fixed-Rate Loans

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1PNC Refinance3.39%$10,000 – $75,000PNC ReviewApply
2ELFI3.99%$150$15,000 – No MaxELFI ReviewApply
3iHelp4.00%$200*$10,000 – $250,000iHelp 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.

Fifteen-Year Fixed-Rate Loans

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1PNC Refinance3.94%$10,000 – $75,000PNC ReviewApply
2Splash Financial4.14%Up to $500$7,500 – $300,000Splash Financial ReviewApply
3ELFI4.35%$150$15,000 – No MaxELFI ReviewApply

At one point, the maximum length loan with most lenders was 15 years. As a result, these loans usually offered the lowest monthly payments. With lenders now willing to refinance over a 20-year term, the 15-year loans have largely fallen out of favor.

A 15-year loan will still make sense in some circumstances, but as the next section will show, a 20-year loan will likely be a better option for most borrowers.

Twenty-Year Fixed-Rate Loans

RankLenderLowest RateSign-Up BonusLoan AmountsSherpa ReviewApplication
1Splash Financial4.41%Up to $500$7,500 – $300,000Splash Financial ReviewApply
2Citizen's Bank4.63%$200*$10,000 – $170,000Citizen's Bank ReviewApply*
3ELFI4.82%$150$15,000 – No MaxELFI ReviewApply

Twenty years is the 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 loans off early. Opting for a 20-year plan provides the most flexibility for this reason. Borrowers can pay off their loans 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 distinguish between federal student loans and private student loans.

However, it is crucial 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 confident that you are willing to give up the federal perks before proceeding. Many borrowers choose to refinance their high-interest private loans and then revisit the option to refinance federal loans at a later date.

The Lowest Student Loan Refinance Rates

If you know the loan type and duration that you are looking for, you can work your way through the top lenders in your desired category. If the lender in first place doesn’t offer you their lowest rate, apply 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, the lender with the 3rd lowest advertised rate may offer 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 are 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.