What is Student Loan Refinancing? | Earnest | Earnest
What is student loan refinancing?
A simple way to replace your existing student loans with one new loan—ideally at a lower interest rate
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Refinancing can help you take control of your student loans
When you refinance, you take out a new private loan to pay off your existing student loans—federal, private, or both.
Your new loan comes with a new interest rate, term, and lender (like Earnest). The goal: simplify your repayment, lower your rate, or adjust your monthly payment to fit your budget.
Why borrowers choose to refinance
Borrowers refinance for different reasons—but the goal is the same: make repayment easier, faster, or less expensive
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Option 1: Save money over time
A lower rate means you pay less in interest—that’s money that stays in your pocket
If your credit or income has improved, you can qualify for a better deal than when you first borrowed
Even a small drop in rate can add up to savings over the life of your loan
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Option 2: Reduce your monthly payment
Lower your monthly bill by spreading payments out over a longer period
Free up cash for rent, groceries, or other goals
Consolidate payments into one simple loan instead of juggling several
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Option 3: Become debt-free faster
Choose a shorter payoff timeline to become debt-free faster
Save on interest because you’ll spend fewer years repaying
Enjoy the relief of checking “student loans” off your list for good
When does refinancing make sense?
Refinancing isn't a one-size-fits-all solution—it’s a strategic financial move that can be helpful in the right situations, but it depends on your goals, your current loan setup, and what kind of flexibility you’re looking for
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Option 1: When refinancing may be a smart move
Your current interest rate is over 6%, and you’d qualify for a lower fixed rate
You want to simplify multiple loans into one monthly payment
You have a steady income and stable employment
You don’t expect to use federal benefits like Public Service Loan Forgiveness (PSLF)
You’re focused on either reducing your monthly payments or paying off faster
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Option 2: When to keep federal loans
You’re pursuing Public Service Loan Forgiveness (PSLF)
You’re behind on payments or in default
You’re expecting a drop in income
Your credit is still recovering
How different borrowers approach refinancing
Individual Results May Vary
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Alex
Alex had only private loans with a 9% interest rate. Refinancing lowered their rate to 6.2%, saving nearly $100 a month.
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Maya
Maya refinanced a mix of federal and private loans after finishing grad school to simplify repayment into one monthly payment.
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Chris
Chris decided to keep federal loans under an income-driven plan but refinanced private loans separately for a better rate.
Your questions about student loan refinancing answered
Does refinancing hurt my credit?
Can I refinance federal and private loans together?
How often can I refinance?
Is there a fee to refinance with Earnest?
Start saving with student loan refinancing
Check your personalized rate in minutes—no commitment, no credit impact
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Disclaimers
This post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.
1 Please note that you may lose benefits associated with your underlying federal loans, such as federal Income-driven Repayment Plans, if you refinance into a private loan. If you file for bankruptcy, you may still be required to pay back this loan.
2 Choosing to refinance to a longer term may lower your monthly payment, but increase the amount of interest you may pay. Choosing to refinance to a shorter term may increase your monthly payment, but lower the amount of interest you may pay. Review your loan documentation for the total cost of your refinanced loan.
3 You may be able to refinance your Earnest Student Loan Refinance again. To be eligible, the loan must have been disbursed more than 30 days ago, it must not be past due, and you must not be enrolled in a hardship or bankruptcy forbearance, skip a pay or any interest only repayment program. Keep in mind that a hard credit check will be required each time you refinance, which may impact your credit.