TULSA, Okla. — Paying down student loans can feel like chipping away at a mountain of debt, but refinancing may offer a path to faster repayment and reduced interest costs.
However, experts warn that borrowers need to carefully weigh the pros and cons before making the switch.
"Refinancing is one of those tools that private student loan borrowers in particular should consider," said Andrew Pentis, a certified student loan counselor and principal writer at Bankrate. "If you're a federal student loan borrower, it's a bit more complicated because once you refinance with a bank, credit union, or online lender, you'll lose some of those government exclusive protections on your federal loans."
Key considerations before refinancing
Before jumping into refinancing, borrowers should evaluate several factors to determine if it's the right choice.
First, check your credit score.
"Having a credit score of at least 650 is very helpful in terms of qualifying for student loan refinancing," Pentis said.
Next, determine whether refinancing will actually lower your interest rate.
"For every percentage point you can lower your APR, it can result in big time savings whether you're refinancing private or federal student loans," Pentis said.
Multiple refinancing options
There's no limit on how many times borrowers can refinance their student loans, but Pentis cautions against doing so repeatedly without clear benefits.
"It may not make sense to refinance them again and again, particularly if you are increasing your interest rate or lengthening your loan term each time, that can actually result in paying more towards your education debt," Pentis said. "But if you're refinancing to pursue that lower interest rate, usually it will make sense to refinance multiple times."
Married couples may benefit
For married borrowers, refinancing together may provide additional advantages.
"If you're a married student loan borrower, you might look into refinancing your spouse's loans together with your own," Pentis said. "That could be a solution, particularly if you or your spouse could benefit from piggybacking onto the other's credit."
If one spouse has a poor credit score while the other has excellent credit, refinancing together could help qualify for lower interest rates. It may also help couples stay more organized when managing student loan debt repayment.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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