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Can You Refinance Federal Student Loans in 2023?

March 9, 2023

Just like private student loans, you can refinance federal student loans. Although federal loans may have lower interest rates, you could find even better rates with private lenders if you have a high credit score.

You can use Credible to see what kind of rates you can qualify for. There’s no commitment involved and it doesn’t impact your credit score.

While this could save you money, when you refinance your federal student loans you forfeit federal loan protections. Is it still worth it? Here’s what you need to know before you refinance.

See Your Rates on Credible

How Does Refinancing Federal Student Loans Work?

When you refinance your federal loans, you get a new loan from a private lender to replace the old one. Your new lender will pay off the remaining balance on your current loan. Then, you’ll begin making payments toward the principal and interest of your new loan. This loan will have completely different interest rates, minimum payments, and repayment terms than your original loan.

You should start the process by comparing interest rates from multiple lenders so that you save the most money. With Credible, you can check your rates with up to 13 different lenders in one place, saving you time. Once you choose a lender, you’ll submit an application. Once you get approval, you can accept the loan offer and begin making payments to your new lender.

Pros and Cons of Refinancing Federal Student Loans

Since student loan refinancing is only available with private lenders, you lose federal loan protections when you refinance. However, the benefits may outweigh the drawbacks, depending on your circumstances.


  • Get a lower interest rate
  • Lower your monthly payment
  • Pay off your loan faster
  • Release a cosigner
  • Combine multiple student loans into one
  • Transfer parent loans to a child


  • Must meet eligibility qualifications
  • Lose eligibility for income-driven repayment
  • Cannot qualify for federal loan forgiveness and forbearance programs

See Your Rates on Credible

Private Student Loan Refinancing vs. Federal Student Loan Consolidation

Student loan refinancing is often confused with federal student loan consolidation. Both allow you to combine multiple loans into one, so you have a single monthly payment. However, only federal student loans are eligible for consolidation.

Consolidation allows you to maintain your federal benefits, but your interest rate will increase slightly. Meanwhile, a refinance can lower your interest rates and save money.

Benefit Private Student

Loan Refinancing

Federal Student

Loan Consolidation

Do federal loans qualify? Yes Yes
Do private loans qualify? Yes No
Can you keep your federal loan benefits? No Yes
Will it improve your interest rates? Yes, most of the time No
Does it combine all of your loans? Yes Federal only
Are there minimum credit score and income requirements? Yes No
Swipe for more

When Should You Refinance Your Student Loans?

Right now is the best time to refinance your student loans because the Federal Reserve is raising interest rates. There will be three to four increases this year, with the first slated for March. With each increase, the rates for student loan refinances will also go up. Your current student loans will remain at the same interest rate. But if you refinance after the rate hikes, you won’t get the historically low-interest rates that are currently available.

Normally, you might wait to refinance until your credit score is in the good to excellent range and you have consistent monthly income with a low debt-to-income ratio. However, it’s unlikely that you’ll have the chance to refinance at such low rates in the future.

Credible has a free 2-minute rate check tool that allows you to see what you qualify for without affecting your credit.

4 Steps to Get a Student Loan Refinance

1. Shop Around and Get Rate Estimates

It’s best to start by researching multiple lenders. Although they might seem alike, each lender has different features. For example, if you didn’t graduate, you’ll need to find a lender that doesn’t require a completed degree. You can compare offers from multiple lenders side by side on Credible.

Next, you’ll get rate estimates by prequalifying. This requires a soft credit pull and won’t impact your credit. Most lenders ask for basic information, such as:

  • Name
  • Address
  • Income
  • Monthly housing cost
  • Total student loan debt
  • University and degree

2. Pick a Lender and Loan Terms

As you get offers from different lenders, you’ll see fixed and variable interest rates, as well as a range of repayment terms. A variable interest rate usually provides a lower rate to start, but after a certain period, that rate can fluctuate. A fixed interest rate stays the same throughout the life of the loan.

Most people choose the lender offering the lowest interest rate. You may want to consider any other discounts, like autopay or loyalty discounts, before deciding.

3. Collect Documentation and Apply

When you’ve made a decision on your lender, you’ll complete an application. Most lenders require some documentation, including a government-issued photo ID, social security number, federal and private loan statements, and proof of income.

4. Wait for Approval and Loan Payoff

Once your application is complete, you’ll continue making your payments as usual while you wait for approval. This usually takes about 3 weeks, though it varies by each lender. When your new lender confirms approval, it will pay off your existing lender(s) and you’ll begin making payments to your new lender.

See Your Rates on Credible

The Best Lenders for Student Loan Refinancing


Credible is the top student loan marketplace because it partners with 13 of the most trustworthy lenders, like CommonBond and College Ave. You can compare rates side by side in a matter of minutes.

Credible provides you with actual rates – not estimates, unlike other marketplaces – so you can easily determine whether it’s the right time to refinance.

You can refinance as little as $5,000, up to your entire student loan debt since there’s no limit. You can even refinance with a cosigner if your credit score or income isn’t where they need to be. Credible’s best-rate guarantee ensures that you won’t find a better rate elsewhere – if you do, Credible gives you $200.

See Your Rates on Credible

Splash Financial

Splash Financial is affordable, with no application, origination, or prepayment fees. It’s also noteworthy for its flexible refinance options, which make refinancing available to more people. If you’re struggling to qualify due to income or credit score, you can refinance jointly with your spouse to improve your loan offers.

If you’re a parent with a child who has completed their degree, you can refinance the student loans in the child’s name or your name.

See Your Rates on Splash Financial

Citizens Bank

You can refinance $10,000 to $750,000 worth of student loan debt with Citizens Bank, depending on your degree. This lender gives you the opportunity to earn a 0.5% interest rate reduction when you set up autopay and have an existing qualifying account with Citizens Bank.

It’s one of very few lenders that allow you to refinance without a completed degree.

See Your Rates on Citizens Bank

The Bottom Line

Choosing to refinance federal student loans requires careful consideration of the benefits you’ll lose by doing so. However, if you have excellent credit, you could save thousands in interest and potentially pay off the loan sooner.

Even if you don’t have an excellent credit score, some of Credible’s lending partners accept scores as low as 670, so it’s worth checking your rate.

See Your Rates on Credible


Can you refinance federal student loans while still in school?

Yes, you can refinance federal student loans while in school. You might choose to wait because federal loans provide more flexible deferment and forbearance options. You might also avoid refinancing if you want to take advantage of federal benefits like income-driven repayment or Public Service Loan Forgiveness.

However, the lower interest rates and flexible terms you can get with a private refinance may make it worth it for you. You can easily check your actual rates on Credible with no commitment.

Can you refinance federal student loans without a job?

Although lenders prefer to see proof of employment, you can still refinance federal student loans without a job. Still, you’ll need to provide evidence that you have consistent monthly income, like from investments, as this shows lenders that you can repay the loan.

What are the requirements for refinancing a federal student loan?

To refinance your federal student loans, you’ll need a minimum credit score of 650, a debt-to-income (DTI) ratio of 50% or less, and proof of consistent income. You’ll also need to show that you’ve made consistent, on-time payments on your current loan.

If you can’t meet these requirements, refinancing your student loan with a cosigner is also an option.

Is this a good time to refinance my student loans?

Yes, now is the best time to refinance your student loans because interest rates are incredibly low. The Federal Reserve plans to increase interest rates at least three times this year, which means that refinancing your student loans now will get you the lowest interest rate possible.

Ginny Dorn
Written by
Ginny Dorn is a freelance personal finance writer. She specializes in credit card debt, personal loans, and mortgages. She graduated from Western Illinois University with a bachelor's degree in family and consumer sciences.