Student loans · Refinancing
Student loan refinance calculator.
Enter your balance, current rate and term, and the offer. See the new payment, the break-even month if there are fees, and the total cost over the full term.
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The short answer
Refinancing a student loan saves money when the new loan costs less in total, not just when the payment is lower. Break-even months equal the fees divided by the monthly saving. Example: $30,000 at 7% with 10 years left, refinanced at 5% over 10 years with no fees, drops the payment from $348.33 to $318.20 and saves $3,615.47 over the term. Enter an offer with fees to see how long it takes to recover them.
How it works. The payment is the standard amortization payment for the balance, rate and term. Total cost is payment times months, plus fees on the new loan. Total saved is the old total minus the new total. If the new loan runs longer than the old one, a smaller payment can hide a larger total, so read the totals and not only the monthly saving.
Federal loans are different. The income-driven repayment plans in 34 CFR 685.209 apply to Direct Loans, such as Direct Subsidized, Direct Unsubsidized and Direct PLUS loans for graduate students (see Sources). A loan from a private lender is not one of those loans, so refinancing a federal loan into a private one means you would no longer be repaying it under those plans. Work out whether you might want that flexibility before you refinance.
Frequently asked questions
How do I calculate the break-even point on a student loan refinance?
Divide the fees by the monthly saving. If a refinance costs $600 and lowers the payment by $30 a month, you recover the fees after 20 months. If you expect to repay the loan before then, the refinance does not pay off.
Is a lower payment always a better refinance?
No. Stretching the same balance over more years lowers the payment and can raise total interest. Compare the total cost shown here.
Does this tool know what rate I qualify for?
No. It uses the rate you type. Use the rate in a real offer, because rates depend on the lender and on you.
What do I give up by refinancing a federal loan with a private lender?
The income-driven plans in federal regulation apply to Direct Loans, and a private loan is not one. See the eCFR link in Sources and read the private lender terms before you sign.
Sources
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Estimate only
Arithmetic only, not financial advice. Real offers can include variable rates, rate changes and fees this tool does not model.