Finance
Student Loan Refinance Calculator
Refinancing replaces your student loans with one new loan: new payment = balance · i / (1 − (1 + i)^−n). Enter your balance, current rate and a new rate to see the new payment, the total interest, and how much refinancing saves — or costs.
Your current loan
Total student debt you would refinance
$
Weighted average rate now
%
Remaining term
yr
The refinanced loan
Rate you are offered
%
New repayment term
yr
Total interest saved
$4,884
New payment $434.11/mo · $40.70 lower
Current payment
$474.81
New payment
$434.11
Current interest
$16,977
New interest
$12,093
Monthly change
−$40.70
Total saved
$4,884
Refinancing saves interest
A lower rate cuts the interest by about $4,884 over the loan. A longer term can lower the payment but add interest — watch both figures.
Estimate only. Refinancing federal loans into a private loan permanently gives up federal protections. Actual rates depend on your credit and lender.
Try a scenario
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The basics
What refinancing does
A private lender pays off your loans and gives you one new one. Whether it helps turns on two things — and one big caveat.
lower rate = less interest
The rate is the prize
The whole point is a lower rate. On the same balance and term, every point off the rate is interest you no longer pay — the cleaner win because student-loan refinances rarely carry fees.
7.5% → 5.5% saves ~$4,884 here
federal perks are lost
The one big caveat
Refinancing a federal loan into a private one permanently forfeits federal protections. That trade can outweigh any rate saving — so it is usually a move for private loans or very secure earners.
IDR, forbearance and forgiveness end
Method
How the savings are worked out
Four steps compare the old loan with the new one.
- 1
Price your current loan
Find the current payment from the level-payment formula on your balance, rate and remaining term.
$40,000 at 7.5% over 10 yr → $474.81/mo - 2
Price the refinanced loan
Apply the same formula at the new rate and term to the same balance.
$40,000 at 5.5% over 10 yr → $434.11/mo - 3
Compare the interest, not just the payment
Total interest is the payment times the number of payments, minus the balance. A lower payment can still cost more over a longer term.
$16,977 vs $12,093 - 4
Read the savings
The difference in total interest is what refinancing saves — before weighing any federal protections you would give up.
saves $4,884 in interest
Worked examples
Different new rates and terms
Refinancing the $40,000 loan (currently 7.5% over 10 years). A lower rate or a shorter term saves more interest.
| New loan | Payment | Total interest | Interest saved |
|---|---|---|---|
| 6.5% · 10 yr | $454.19 | $14,503 | $2,474 |
| 5.5% · 10 yr | $434.11 | $12,093 | $4,884 |
| 5.5% · 7 yr | $574.80 | $8,283 | $8,694 |
| 5.5% · 15 yr | $326.83 | $18,830 | −$1,853 |
Current loan: $474.81/mo, $16,977 total interest.
Where it shows up
When to refinance
Three situations where refinancing tends to pay off.
private loans
High-rate private debt
Private student loans carry no federal protections, so refinancing them to a lower rate is a near-clean win when your credit has improved.
No federal perks to lose
credit improved
A better profile now
Rates offered at graduation often beat the ones from school. A steady income and a higher score can unlock a materially lower rate.
A degree and a job lower your rate
secure income
No need for safety nets
If your income is secure and you will never need income-driven repayment or forgiveness, the federal protections cost you nothing to give up.
Stable earners who won't use IDR
Reference
What you keep and what you give up
Refinancing federal loans is a one-way door. Know what leaves with them.
| Feature | Federal loan | After refinancing (private) |
|---|---|---|
| Income-driven repayment | Available | Gone |
| Loan forgiveness (PSLF) | Possible | Gone |
| Generous forbearance | Available | Limited, lender's terms |
| Rate | Fixed federal rate | Based on your credit |
| Death/disability discharge | Available | Varies by lender |
Worth knowing
Five things before you refinance
The rate is the headline; these decide whether it is the right move.
federal = one-way door
You cannot go back
Once federal loans are refinanced privately, the federal protections are gone for good. Weigh that before chasing a lower rate.
term changes the total
Shorter saves more
A shorter term raises the payment but slashes total interest. Do not lengthen the term just to lower the payment unless you need the room.
usually no fees
Refinancing is cheap
Student-loan refinances typically have no origination fee and no prepayment penalty, so a lower rate is close to a clean saving.
a co-signer helps
Boost your offer
A creditworthy co-signer can unlock approval or a lower rate if your own credit is thin.
variable vs fixed
Mind the rate type
A variable rate may start lower but can rise. A fixed rate locks the payment — safer if you will take years to repay.
you can redo it
Refinance again later
With no prepayment penalty, you can refinance again if rates drop or your credit improves.
Quick chart
Refinanced payment, by balance and rate
Monthly payment on a refinanced loan — pick a balance and read across rates and terms. Compare it to your current payment above.
Loan balance
Show
Monthly payment on $40,000, by rate and term.
| Rate | 5 years | 7 years | 10 years | 15 years |
|---|---|---|---|---|
| 4.00% | $737 | $547 | $405 | $296 |
| 5.00% | $755 | $565 | $424 | $316 |
| 6.00% | $773 | $584 | $444 | $338 |
| 7.00% | $792 | $604 | $464 | $360 |
| 8.00% | $811 | $623 | $485 | $382 |
| 9.00% | $830 | $644 | $507 | $406 |
Monthly payment on a refinanced student loan. Switch to Total interest to compare the full cost of each term.
How we calculate this
The formula and our assumptions
Both loans use the standard amortizing-loan formula on the same balance.
M = P·i ÷ (1 − (1 + i)^−n)
Each payment
P is the balance, i the rate over twelve, and n the number of months. We price the current and refinanced loans the same way.
interest = payment × n − balance
The savings
Total interest on each loan is the payments summed, minus the balance. The difference is the interest saved (or added) by refinancing.
- Refinancing is assumed to carry no fees, as is typical for student loans.
- The current loan uses your remaining balance and remaining term.
- Rates are fixed for the life of each loan; variable rates are not modelled.
- The calculator does not value federal protections lost on refinancing — weigh those separately.
Where to refinance
Where to shop for a refinance
Rows are ordered by borrower fit, not by any payout. Keeping federal loans is listed on purpose — for many borrowers it is the right choice. Rates are ranges only; get an exact quote.
| Where | Examples | Best for | Pricing |
|---|---|---|---|
| Refinance marketplace | Credible | Comparing several lenders at once | Market range |
| Direct refinance lender | SoFi, Earnest | Member perks, strong credit | Market range |
| Credit union | Member-owned lenders | Lower rates for members | Often below market |
| Keep federal loans | Your federal servicer | Access to IDR and forgiveness | Fixed federal rate |
CalculateThis.io is not a lender and does not make credit decisions. When we add lender links they will be marked as sponsored, and we may earn a commission if you apply through one — it does not change the rate you are offered. Refinancing federal loans forfeits federal protections.
Sources
Where the method comes from
- Federal Student Aid (studentaid.gov) — federal loan benefits and repayment options.
- Consumer Financial Protection Bureau — student loan refinancing and its trade-offs.
- Standard amortization formula for a fixed-rate, fully amortizing loan.
FAQ
Common questions
A private lender pays off your existing student loans and issues one new loan at a new rate and term. If the new rate is lower, you save interest; a shorter term saves more but raises the payment. On $40,000 at 7.5%, refinancing to 5.5% over 10 years cuts the payment from $474.81 to $434.11 and saves about $4,884 in interest.
The saving is the interest difference between the old and new loans. It grows with the rate drop and the balance. On the $40,000 example, moving from 7.5% to 5.5% over the same 10 years saves about $4,884 in total interest. Shortening the term saves even more; lengthening it lowers the payment but can add interest.
Be very careful. Refinancing federal loans into a private loan permanently gives up federal benefits — income-driven repayment, generous forbearance, and forgiveness programs like PSLF. If there is any chance you will need those protections, or you work toward forgiveness, keep the federal loans. Refinancing usually makes sense only for private loans, or for high earners with secure income and no need for federal safety nets.
It can, in two ways: a lower rate, or a longer term. On the example a lower rate alone drops the payment from $474.81 to $434.11. Stretching the term lowers it further but means paying interest for longer — so a smaller payment does not always mean a smaller total cost. Check both the payment and the total interest.
Most private lenders look for good-to-excellent credit — often a score in the high 600s or above — plus steady income and a manageable debt-to-income ratio. A stronger profile earns a lower rate. If your credit is thin, a creditworthy co-signer can help you qualify or secure a better rate.
Yes. There is no limit on how many times you can refinance, and doing so again makes sense if rates fall or your credit improves. Each refinance is a new loan with a new application and a credit check, but there are typically no prepayment penalties on student loans, so nothing stops you from refinancing again later.
Usually not. Reputable student-loan refinance lenders generally charge no application fee, no origination fee, and no prepayment penalty. That makes the decision simpler than a mortgage refinance — the main cost is the interest itself, so a lower rate is close to a clean win, provided you are not giving up federal protections.
It depends on your goal. A shorter term raises the payment but slashes total interest and clears the debt sooner. A longer term lowers the payment for breathing room but costs more interest overall. On the $40,000 example, refinancing to 7 years instead of 10 raises the payment but saves substantially more interest — the chart on this page shows the trade-off.
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Ugo CharlesBuilt and fact-checked against our editorial standards · Last updated June 2026
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