The Best Student Loan Refinancing Options

Through refinancing, you could potentially save thousands of dollars¹ by lowering your rate or paying off your student loans quicker with new payment terms. We’ll sort through the top reasons to refinance.

Laurel Road has saved student loan borrowers thousands of dollars over the life of their loans through a relatively simple process called refinancing. Refinancing with Laurel Road could be an excellent option for those with strong credit.

Please note: Refinancing federal student loans with a private lender means you won’t have the option to apply for Public Service Loan Forgiveness (PSLF) or participate in income-driven repayment (IDR) plans, which calculate your monthly payment amounts based on your discretionary income.

Refinancing options

Refinancing student loans could achieve two common goals:

• Consolidation and standardization of your interest rate. This is perhaps the most common reason that borrowers refinance their student loans. Consolidation combines a borrower’s multiple loans into a single loan, often making it easier to manage, track, and pay down – especially if the new loan comes with a lower interest rate. Federal loan consolidation uses a weighted average interest rate of the loans being consolidated and you may be able to save with some of the federal benefits such as PSLF. (To be clear, whenever a borrower refinances with a private lender, they are also consolidating.)
• An increase or decrease your monthly payments to change interest and term length. Another reason to refinance is to change your monthly payment amount to better meet your financial goals. Shortening your loan term could allow a borrower to pay less total interest on the loan as the debt is paid off faster. If a borrower opts for a shorter term, they’ll likely have to pay more monthly. However, in comparison to the total interest they would incur over the original loan term, a shorter term may lead to significant savings. A borrower might also opt to lower their monthly payments. This will typically raise the interest on the loans as well as increase the amount of time it takes to pay off the loan. It could be the best option when the borrower’s financial situation requires their money be used for other necessary debts or expenses outside of student loan repayments, such as mortgage or credit card debt.

Whatever your ultimate decision, refinancing is about choosing the right student loan management option for you at that time. We understand that financial situations are fluid, and refinancing gives borrowers the flexibility to react to life’s changes and circumstances.

Income Driven Repayments (IDR) and Public Service Loan Forgiveness (PSLF)

If you’re a federal student loan borrower, IDR and PSLF may be available to you. With federal student loan debt pushing $1.8 trillion, more students are seeking solutions that provide relief and sensible repayment plans tied to their earning potential. Be sure to explore both options to see what might be available to you. Schedule a free 30-minute consultation with one of our student loan specialists who can help you understand how to qualify.

How to choose the best student loan refinancing option for you

To find the right lender and option for you, consider following a few steps:

• Evaluate your budget: How much can you allocate each month to paying down your student loan debt? This is the first step in determining what to focus on when refinancing.
• Review your credit score/report: Do you have poor, average, good, or excellent credit? Credit scores could range from 300 to 850 depending on the model. 670 and up is regarded as good, around 740 is generally seen as very good, and 800+, exceptional.² If your score is in the very good to exceptional range, you will likely get better interest rate options from most lenders. Focusing on who offers the lowest rate based on your score should be something to consider during your search.
• Research options available to you: Use the web, search aggregators, and check your rate options with various private lenders. With Laurel Road, you can check rates in less than 5 minutes based on your inputs and a soft credit pull (that won’t affect your credit score).³
• Make your selection: Ultimately, you’ll choose the best rate and best terms for your situation. There are many lenders out there offering great deals in accordance with your individual needs, so be sure to shop around.

Why Laurel Road?

If you’re eligible to refinance with Laurel Road, we offer several options based around your individual financial situation. If you wish to pay off your loan quickly or stretch it out over a longer amount of time – we can help. We also offer loan terms to suit your repayment needs, and we can help borrowers refinance their Parent Plus loans into their own name, if desired.

As a leader in student loan refinancing for medical students and residents, Laurel Road also offers some specific benefits to the medical student community, including the ability to recognize non-standard income history.

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