Student Loan Refinance Calculator
Compare your current student loan against a refinanced loan to see exact monthly payment savings, total interest savings, break-even month, and payoff timeline side by side — free, private, no signup required.
| Metric | Current Loan | Refinanced Loan | Difference |
|---|
- Federal loans only: Refinancing with a private lender removes all federal protections (IDR, PSLF, forbearance). See studentaid.gov.
- Variable vs fixed rates: Variable-rate refinance loans can rise significantly; this calculator models fixed-rate scenarios only.
- Credit score matters: The best refinance rates (below 5%) typically require a 720+ credit score and stable income. See cfpb.gov.
How Student Loan Refinancing Works
Student loan refinancing is the process of taking out a new private loan to pay off one or more existing student loans — federal, private, or both. The goal is to secure a lower interest rate, reduce your monthly payment, or shorten your repayment term. According to studentaid.gov, the average federal student loan interest rate for undergraduate loans in 2024–2025 is 6.53%, while creditworthy borrowers can qualify for private refinance rates as low as 4.5–5.5% in 2026. For a $45,000 balance, dropping from 6.54% to 4.99% saves approximately $42 per month and over $5,000 in total interest over a 10-year term.
The refinancing process involves applying with a private lender — such as SoFi, Earnest, Laurel Road, or a credit union — who evaluates your credit score, income, employment history, and debt-to-income ratio. If approved, the new lender pays off your existing loans and issues a single new loan at the agreed rate and term. Unlike federal consolidation (which averages existing rates), refinancing with a private lender can meaningfully lower your rate if your financial profile has improved since you first borrowed.
When Refinancing Makes Sense (and When It Does Not)
Refinancing is most beneficial when your new rate is at least 1–2 percentage points lower than your current rate, you have a stable income and strong credit score (720+), and you do not plan to pursue Public Service Loan Forgiveness or income-driven repayment. The Consumer Financial Protection Bureau (cfpb.gov) advises borrowers to calculate the break-even point before refinancing: if closing costs or origination fees apply, divide them by your monthly savings to find how many months until refinancing pays off.
Refinancing is NOT advisable if you carry federal loans and are working toward PSLF, rely on income-driven repayment to keep monthly payments affordable, or expect your income to drop (due to career change, parental leave, or other reasons). Private loans do not offer income-based payment caps, federal forbearance, or the 10-year PSLF forgiveness pathway. Once you refinance a federal loan into a private loan, this change is permanent and irreversible.
Understanding the Break-Even Calculation
The break-even month is the point at which your cumulative payment savings equal any upfront costs (origination fees, application fees) associated with refinancing. If there are no fees, every dollar of monthly savings is pure gain from day one. This calculator shows the break-even month assuming zero origination fees — the conservative best case. In practice:
- Lenders that charge a 1% origination fee on a $45,000 loan add $450 upfront. At $42/month savings, break-even is month 11.
- Lenders with no origination fee (SoFi, Earnest) offer immediate savings — break-even is month 1.
- Shorter refinance terms (5–7 years) save more total interest but increase monthly payments, which may strain your budget.
- Longer terms (15–20 years) reduce monthly payments but dramatically increase total interest paid compared to your original loan.
Always compare the Annual Percentage Rate (APR), not just the stated interest rate, when evaluating refinance offers from multiple lenders.
Federal Loan Protections Lost When Refinancing
This is the most critical consideration for federal student loan borrowers. Refinancing with any private lender strips away all federal protections permanently. According to studentaid.gov, federal benefits lost upon private refinancing include:
- Income-Driven Repayment (IDR): Plans like SAVE, IBR, PAYE, and ICR cap monthly payments at 5–10% of discretionary income and forgive remaining balances after 20–25 years.
- Public Service Loan Forgiveness (PSLF): Government and nonprofit employees working full-time can have remaining balances forgiven after 120 qualifying payments — worth tens of thousands of dollars for high-balance borrowers.
- Federal Forbearance and Deferment: If you lose your job or face economic hardship, federal loans can be paused without interest accruing on subsidized loans. Private lenders may offer forbearance, but it is shorter, less generous, and interest always accrues.
- Borrower Defense and Discharge: Federal loans may be discharged if your school closed or misled you. Private loans offer no equivalent protection.
Sources: studentaid.gov, cfpb.gov. Last updated: May 2026.
Frequently Asked Questions
What is student loan refinancing?
Student loan refinancing is taking out a new private loan to pay off one or more existing student loans (federal or private) at a potentially lower interest rate or different repayment term. The goal is to reduce your monthly payment, lower your total interest cost, or both. Unlike federal consolidation, refinancing with a private lender can genuinely lower your interest rate if your credit profile has improved since you originally borrowed.
What credit score do I need to refinance student loans?
Most private lenders require a credit score of at least 650 to qualify for refinancing, but the best rates (below 5%) typically require 720 or higher. Lenders also evaluate your debt-to-income ratio, employment history, and income stability. Applying with a co-signer who has strong credit can help you qualify for lower rates if your score is borderline. According to cfpb.gov, shopping multiple lenders with prequalification (soft credit pull) does not affect your score.
Will I lose my federal loan benefits if I refinance?
Yes — permanently. Refinancing any federal student loan with a private lender removes access to income-driven repayment plans (SAVE, IBR, PAYE), Public Service Loan Forgiveness (PSLF), federal forbearance and deferment, and discharge programs. This change cannot be reversed. Only refinance federal loans if you are confident you will not need these protections and you qualify for a meaningfully lower rate. See studentaid.gov for the full list of federal benefits at stake.
How is refinancing different from federal loan consolidation?
Federal Direct Consolidation combines multiple federal loans into one new federal loan, preserving all federal protections. The new rate is a weighted average of your existing rates rounded up to the nearest 1/8%, so it does not save money on interest. Private refinancing replaces your loans with a brand-new private loan at a potentially lower rate — but permanently removes federal protections. Federal consolidation keeps benefits; private refinancing sacrifices them in exchange for a potentially better rate.
Should I choose a shorter or longer refinance term?
A shorter term (5–7 years) means higher monthly payments but significantly less total interest paid and an earlier payoff date. A longer term (15–20 years) lowers monthly payments but can cost more in total interest than your current loan even at a lower rate. The calculator shows both scenarios side by side. As a general rule, choose the shortest term whose monthly payment fits comfortably within your budget, leaving room for unexpected expenses.
What is the break-even month on a student loan refinance?
The break-even month is when your cumulative monthly savings from refinancing equal any upfront costs (origination fees, application fees). If your lender charges zero fees — common with SoFi, Earnest, and Laurel Road — every month of savings is pure gain from day one. If there is a 1% origination fee on a $45,000 loan ($450), and you save $42 per month, your break-even is month 11. After that point, refinancing is profitable regardless of how long you hold the loan.