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Student Loan ReFi

Why I Refinanced My Student Loans — Twice

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.


Refinancing your student loans can be a great way to accelerate debt repayment or free up some of your monthly budget. I recently refinanced my student loans for a second time, which was a strategic move to improve my overall financial health.

Here’s why I think this can be a smart idea, if you do it at the right time in the right way.

What Is Student Loan Refinancing?

If you’re new here and wondering what refinancing even is, allow me to explain. When you refinance your student loans, you essentially apply for a new loan so that a new lender will buy out your current student loans and give you a new loan with better terms.

“Better” terms depends on what your goal is. For many people, getting a better loan means getting a lower interest rate. If you want to save hundreds of thousands of dollars of interest over the life of your loan, refinancing is a great way to do that. You can structure your loan to pay it off faster at a lower interest rate. This might mean higher monthly payments than you’re used to but a much lower cost of your loan overall.

If you’re having trouble paying your student loans and your monthly payment is too high right now, you can also refinance your student loans to lower your monthly payment. So if you’re on a 10-year plan now, you could refinance to a 15- or 20-year plan to spread out your payments until you get on better financial footing.

Why I Refinanced Twice

About a year ago, I refinanced my federal student loans with SoFi because I wanted to get a better interest rate and pay off my loans faster. My student loans totaled $33,000 with an interest rate of 6.8% with 15 years left on the loan. My monthly payment was around $295 a month. I dropped over a half a percentage point in the interest rate to 6.25% and chose to pay off my loans in 7 years, which increased my monthly payment to about $485. Had I stayed with this loan, I would have saved almost $12,000 in interest fees over time.

I paid my monthly payments dutifully every month, but when my husband and I recently sat down to plan an aggressive debt payoff using the snowball method, we realized that I had been a bit too aggressive with my initial refinance.

Essentially, we wanted to throw as much money as possible at our high-interest debt. Our student loans were at manageable interest rates compared to our credit cards, and we wanted to restructure things a bit to free up more cash.

After receiving a refinance advertisement from College Ave in the mail, I decided to see if I could refinance my student loans and my husband’s graduate school loans with them. It had been only a year or so since my first refinance, but I was still interested. For the record, I tried twice previously to refinance my husband’s loans with SoFi, but they didn’t like his current salary as a medical resident, and they said I was not a qualified co-signer.

Well, luckily College Ave thought I was, so I was able to refinance both my student loans and my husband’s graduate school loans with College Ave. Our interest rates remained the same but I was able to customize a payoff plan that works well with our current debt snowball.

Basically, I chose a plan that allowed us to make graduated payments, so my payments for the next two years are significantly lower than they used to be. That gives me two years to knock out some of our credit card debt without worrying about having large student loan payments.

The Benefits of Student Loan Refinancing

In addition to getting longer or shorter payoff periods and better interest rates, there are other reasons why you might choose to refinance your student loans. For example, if you co-signed your student loans with your parents, sometimes student loan refinance companies will let you get a new loan entirely in your name, getting your parents off the hook.

Many people also refinance their student loans to be more organized. If you have several different student loans and bills with a mixture of interest rates, consolidating your student loans allows you to finally have one monthly bill with one interest rate in one place. This helps reduce the possibility of being late on your payments.

Things to Watch Out for Before You Refinance

While I’m obviously an advocate of refinancing, it’s important to know the downsides as well. The main downside is that if you refinance to a private company from having federal student loans, you lose a lot of the flexibility and perks of the federal student loan system.

Not all private lenders have as many repayment options as federal loans have, and most of them do not offer the perks that come with income-based repayment. For example, my husband’s medical school loans are under the income-based repayment plan called REPAYE, where the government is subsidizing his interest payments (several hundred dollars a month). This is not a perk I was willing to give up, but I was happy to refinance his private graduate school student loans to another private lender with better terms.

It’s Easier Than You Think

I know that switching student loan providers might sound like a complicated process, but with all the online financing companies available now, it’s easier than ever. The process to apply to refinance my student loans took less than 20 minutes both times.

Just make sure to have some identification documents on hand, like your driver’s license and Social Security card, to keep the process running smoothly. After my application was approved, it took about two weeks for my student loans to be completely moved over. Plus, since my new servicer paid off my own loans, that counted as a “payment,” which freed up even more cash this month.

Ultimately, student loan refinancing can be a strategic tool you can use when it comes to bettering your finances and getting out of debt faster. As long as you understand the process, ask to make sure you’re aware of any possible fees, and double-check that the process runs smoothly, you could be well on your way to financial freedom just by adjusting your interest rates and your payments on your student loans.

Cat Alford
Cat Alford |

Cat Alford is a writer at MagnifyMoney. You can email Catherine at cat@magnifymoney.com

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College Students and Recent Grads, Pay Down My Debt, Reviews

SoFi Student Loan Refinance Review

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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SoFi is one of the leading lenders in the student loan refinance space. It has some of the lowest interest rates available, and also has great perks not offered through most other lenders.

Its site states an average member savings of $11,000, and it has funded over $2.5 billion in loans to date.

When you refinance student loans through SoFi*, you won’t have to worry about any hidden fees or upfront costs, either.

Does it sound too good to be true? It’s not. If you’re looking to refinance your student loans with a reputable online lender, SoFi is for you.

Refinance Terms Offered

In most states, the minimum amount required to refinance is $10,000, but there’s no cap on how much you can refinance. This is great news for those with six-figure student loan debt.

Remember those low interest rates we mentioned? Fixed APRs range from 3.50% – 7.24%, and variable APRs range from 1.90% – 5.19%. These rates are available so long as you enroll in autopayment.

You can refinance on a 5, 10, 15, or 20 year term, and you can refinance both private and federal student loans.

For example, if you borrow $30,000 on a 10 year term at an APR of 4.615%, your monthly payment will be $312.58. Under those terms, you’re paying back a total of $37,509.60 (120 payments). If you borrow the same amount, but have a 6.8% APR, your monthly payment is $345.24, paying back a total of $41,428.80. In this case, SoFi’s low rates have the potential to save you nearly $4,000.

The Pros and Cons of the SoFi Student Loan Refinance Program

Aside from having some of the lowest APRs available, SoFi also has an unemployment protection program and an entrepreneur program.

Unemployment protection is beneficial for borrowers. Suffering from a job loss is a big concern among college graduates. You don’t want to find yourself in a position where you can’t afford to make your rent payment, let alone your student loan payment.

If you lose your job through no fault of your own, SoFi will step in and help you get back on your feet. You may be eligible for a period of forbearance – your payments are paused temporarily, and interest continues to accrue on your loan.

Forbearance is offered in three month increments, though you can’t exceed twelve months of assistance over the life of your loan. You must also provide proof you’re eligible for unemployment compensation, and you need to work with SoFi’s career center and actively look for employment.

What’s the entrepreneur program? SoFi doesn’t believe student loans should hold amazing business ideas back, so it created the entrepreneur program to help graduates who dream of owning a business.

Under this program, loans can be deferred for six months so borrowers can focus on growing their businesses. SoFi provides access to networking events, mentors, and investors.

While the low interest rates and perks are great, there are a couple of downsides to refinancing your student loans with SoFi.

First, refinancing is currently unavailable to those residing in Nevada, and variable rate options aren’t available to those in Ohio or Tennessee.

Second, SoFi has a list of available schools and programs it services. If your school or program isn’t on that list, you won’t be eligible to refinance.

Third, SoFi typically requires applicants to have a credit score above 700. It occasionally accepts co-signers – you must call to review your situation with a representative. However, there’s no co-signer release if you move forward with one on your loan.

Lastly – and this goes for any lender – when you refinance Federal loans with a private lender, you lose out on benefits specific to Federal loans. Certain repayment plans, deferment, forbearance, and forgiveness are among the benefits lost when refinancing. However, SoFi does offer forbearance; not all lenders do.

Who Qualifies to Refinance Student Loans With SoFi?

To be eligible to refinance your student loans with SoFi, you need to meet the following requirements:

  • You must be a U.S. citizen or permanent resident 18 years or older
  • You need to have a 4-year undergraduate or graduate degree from a Title IV accredited institution
  • You have to be employed or have an offer of employment starting in 90 days from the time you apply
  • You need to be in good standing on your current student loans
  • You should have a good, stable employment history
  • A strong monthly cash flow is a must
  • An excellent FICO score will improve your chances of being approved

As you can tell, SoFi looks at more than just your credit score when reviewing your application. Income, cash flow, job history and current employment, and education history all matter, too.

Since SoFi uses a soft credit pull for the initial pre-approval, you should try applying with it to see if you’re eligible.

If you’re approved and decide to move forward with one of the loans offered to you, a hard credit inquiry from Experian will be used.

Documents and Information Needed to Apply

According to its website, SoFi’s pre-approval should take you less than 15 minutes to complete. You likely won’t need most of these documents until you’re ready to move forward with a loan, but they’re good to have on hand while you’re shopping around.

  • Existing student loan information (SoFi will need your account information for the loans you wish to finance)
  • Employment information – salary, offer of employment, length of employment
  • Most recent pay stubs as proof of income and employment (if you’re currently employed)
  • Diploma or transcript in the event SoFi needs to verify your graduation

It’s good to note SoFi accepts screenshots from your PC and pictures taken from a phone, so if you don’t have access to a scanner, there’s no need to worry.

Who Benefits the Most from Refinancing Student Loans with SoFi?

Those with higher balances and interest rates whose school or program are on SoFi’s list will benefit the most.

Unfortunately, SoFi’s requirements are a little on the strict side, but it is working to expand the schools and programs eligible for refinancing.

Those in a good job position – with excellent credit, consistent employment history, and a decent salary with strong cash flow – are the best candidates.

The Fine Print

There’s not much fine print to be aware of with SoFi’s student loan refinance program. There are no prepayment penalties, application fees, or origination fees.

The only fees associated with the loan are the typical late fee and returned payment fee.

If you’re 15 days past due on a payment, a late fee not exceeding $5 or 4% of the past due amount must be paid.

Each time a payment is unsuccessful, you have to pay a $10 fee.



on SoFi’s secure website

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Alternative Student Loan Refinancing Options

SoFi is one of our most highly recommended lenders, but understandably, some people won’t meet its requirements. If that’s the case, you might have an easier time being approved by one of these lenders.

Citizen’s Bank allows you to refinance $10,000 to $90,000 of student loan debt if you have an undergraduate degree; $130,000 if you have a graduate degree; and $170,000 if you have a professional degree.

It has the same repayment options as SoFi with terms of 5, 10, 15, and 20 years. Its variable APR ranges from 2.83% – 7.47%, and its fixed APR ranges from 5.24% – 9.39%.

Unlike SoFi, its credit requirements are less strict (though it does use a hard credit pull right away), and it accepts co-signers with a release possible after 36 consecutive and timely payments. It also offers a forbearance option, and there are no prepayment penalties or origination fees.

Earnest is another option offering very similar rates to SoFi. Its fixed APR ranges from 3.50% – 7.25%, and its variable APR ranges from 1.90% – 5.75%. There’s also no limit to how much you can refinance, and the minimum is only $5,000.

There are no origination fees or prepayment penalties, and you can freely switch between fixed and variable rates should your needs change. Earnest is big on offering flexible options to its borrowers, which is great if you’re unsure of what your financial future might look like.

Additionally, you can also skip one payment per year (although interest will still accrue), so you can take advantage of that if you have a rough month with your money.

Earnest also offers unemployment protection, which comes with the same forbearance option as SoFi offers.

You can get pre-approved with a soft credit inquiry, and a hard credit inquiry will be used if you choose to move forward with the loan.

There Are Great Options Out There – Shop Around

While SoFi is a great choice for refinancing your student loans, there are clearly other comparable options out there that might suit your needs better. Do your research and take a look at the different options out there. The great thing for borrowers is lenders like SoFi and Earnest make it easy to check rates available to you. You can still shop lenders that use hard credit inquiries, such as Citizen’s Bank – just make sure to do it within a 30-day window so your credit score isn’t affected as much.



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Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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