Student Loan Refinance Calculator
Calculate potential savings from refinancing your student loans
Calculate with Student Loan Refinance Calculator
Assumptions
Use Student Loan Refinance Calculator for family funding planning when you need a clear estimate, transparent inputs, and a result you can review before taking the next step.
Worked example
When To Use Student Loan Refinance Calculator
- Start with a representative scenario in Student Loan Refinance Calculator so rates, dates, balances, or other key assumptions match the question you are comparing.
- Review whether the estimate matches the planning scenario before you use it for a budget, plan, or discussion.
Sample Input And Output Checks
- Start with inputs that match the real scenario, not only a rounded placeholder.
- Review contribution cadence, return assumptions, inflation, and family-specific inputs before trusting the output.
- Update the plan as tuition, aid, or savings assumptions change over time.
About This Tool
Our Student Loan Refinance Calculator helps you determine potential savings from refinancing your student loans at a lower interest rate. Compare your current loan terms with new refinancing options to see how much you could save on monthly payments and total interest over the life of your loan.
What is Student Loan Refinancing?
Student loan refinancing involves taking out a new loan with a private lender to pay off one or more existing student loans. The goal is to secure a lower interest rate, reduce monthly payments, or change your repayment term. Refinancing can save thousands of dollars in interest over the life of your loans if you qualify for better rates.
When you refinance, your old loans are paid off and replaced with a single new loan. This simplifies repayment by consolidating multiple loans into one monthly payment. However, refinancing federal loans with a private lender means losing federal benefits like income-driven repayment plans, loan forgiveness programs, and deferment options.
When to Consider Refinancing
Improved Credit Score: If your credit score has increased significantly since taking out your original loans, you may qualify for lower interest rates. A score above 700 typically gets the best refinancing rates.
Stable Income: Lenders want to see steady employment and sufficient income to cover loan payments. A debt-to-income ratio below 40% improves your chances of approval and better rates.
High Interest Rates: If your current loans have interest rates above 6-7%, refinancing could provide substantial savings. Even a 1-2% rate reduction can save thousands over a 10-year term.
Private Loans Only: Refinancing makes most sense for private student loans or for federal loan borrowers who don't need federal protections and benefits.
Calculating Your Savings
Our calculator compares your current loan details (balance, interest rate, and remaining term) with the refinance offer's rate and term. It shows the current payment, new payment, monthly difference, current interest, new interest, gross interest change, and net savings after any origination or closing costs you enter.
Consider both monthly payment changes and total interest savings. Extending your loan term reduces monthly payments but may increase total interest paid. Shortening your term increases monthly payments but saves more on interest. Use our Student Loan Calculator to explore different repayment scenarios.
Treat the output as an assumption-based comparison, not a lender quote. Prepayment rules, variable rates, cosigner release, autopay discounts, and federal loan protections can matter as much as the headline rate.
Pros and Cons of Refinancing
Advantages: Lower interest rates save money, simplified payments with one lender, potential to pay off loans faster, and ability to remove cosigners from original loans.
Disadvantages: Loss of federal loan benefits including income-driven repayment, Public Service Loan Forgiveness eligibility, federal deferment and forbearance options, and death/disability discharge.
Important Consideration: Never refinance federal loans if you're pursuing loan forgiveness programs or may need income-driven repayment plans. These federal benefits are irreplaceable once you refinance with a private lender.
Steps to Refinance Student Loans
Check Your Credit: Review your credit score and report. Address any errors and work on improving your score if needed before applying.
Compare Lenders: Shop around with multiple lenders to find the best rates and terms. Most lenders offer rate quotes without affecting your credit score.
Calculate Savings: Use our calculator to determine if refinancing makes financial sense. Ensure the savings justify losing federal loan protections if applicable.
Apply and Close: Submit applications to your chosen lenders. Once approved, the new lender pays off your old loans and you begin making payments on the new loan.
For comprehensive education financing planning, explore our 529 Plan Calculator and Scholarship Calculator to understand all aspects of education funding.