How Often Can I Refinance My Student Loans?

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Updated on Thursday, December 6, 2018

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Do you wish you could go back in time and make different choices about your student loans? Although you can’t “un-borrow” your debt, you do have a chance to restructure it through student loan refinancing.

Not only can refinancing save you money with a lower interest rate if you qualify, but it also lets you choose new repayment terms that better match your budget.

What’s more, you don’t have to refinance just once — you can refinance multiple times to save as much money as possible on your debt.

Here’s how refinancing your student loans more than once could be beneficial, along with some potential drawbacks to avoid.

How often can I refinance my student loans?

Refinancing student loans comes with a number of benefits, including lowering your interest rate if you qualify, lengthening or shortening your repayment and combining multiple loans into one. So given all the advantages, it’s natural to wonder how often can you refinance your student loans.

As it turns out, there’s really no limit to the number of times you can refinance your college debt, so long as you meet lender requirements for credit and income (or apply with a cosigner who does).

Lenders give the best rates to the most creditworthy borrowers. So if your credit has improved significantly since the last time you refinanced, applying again could get you even better terms than you received in the past.

3 potential benefits of refinancing multiple times

Chances are, filling out student loan paperwork isn’t your favorite pastime. But taking time to refinance your student loans more than once could be worth the effort. Here are three times when refinancing over and over could be advantageous.

Get an even lower interest rate

The main reason to refinance more than once would be if to snag a lower interest rate. Let’s say you owed $20,000 at a 6.00% rate and have five years left on your repayment term. Over those years, you’d pay $3,199 in interest. But if you could refinance to a 3.5% rate, you’d pay just $1,830 in interest over five years.

Lowering your rate might also mean having more affordable monthly payments. As a result, you might be able to pay more each month. By throwing extra payments at your loans, you’ll get out of debt ahead of schedule.

Switch from a variable rate to a fixed rate

Another reason to refinance more than once would be to switch from a variable rate to a fixed rate on your debt. Let’s say you refinanced a few years ago and chose a variable rate, which has since increased over the years.

To stop it from creeping up further, you might refinance again and choose a fixed rate, which will stay the same over the life of your loan. Even if you choose a longer repayment term, you won’t have to worry about your interest rate rising over time.

Choose new terms that work for your budget

Finally, refinancing allows you to pick new repayment terms, typically between five and 20 years. Let’s say you chose a long term when you refinanced the first time, but now you want a shorter term to get out of debt faster.

Or on the flip side, maybe you’ve run into some financial trouble and are struggling to afford your monthly payments. If that’s the case, you could lower them by choosing a longer term.

If your financial situation has changed, the choices you made when you refinanced the first time might no longer match your goals. If you’re looking for new terms on your debt, refinancing a second time could be a smart strategy.

Beware the downsides of refinancing more than once

While the answer to “How many times can you refinance a student loan?” might be “As many times as you want,” it’s a different story when you ask how often should you refinance student loans.

Refinancing multiple times could save you money, but there are some potential pitfalls as well. Here are the two main ones:

Be careful about accidentally adding years to your debt

As mentioned above, refinancing gives you the chance to choose new repayment terms. But if you’re not careful, you could end up adding years onto your debt.

Let’s say you chose a 10-year term when you refinanced two years ago, and you now only have eight years left on your loan. If you refinance again and choose a 10-year term, you’d be adding two years onto your debt.

Not only would you be in debt longer, but you would spend more on interest overall. If your goal is to save money, be careful you don’t unnecessarily lengthen your debt when refinancing for a second or third time.

Watch out for hidden costs and fees

Besides being careful about which repayment term you select, you must also watch out for extra costs associated with refinancing.

Some lenders charge an origination fee when disbursing a refinanced student loan, and others even charge an application fee.

That said, some of the best lenders, such as CommonBond, SoFi and Earnest, don’t charge any fees for refinancing student loans.

But make sure to read the fine print before you refinance again, so you don’t end up overspending on your student loans.

Make the most of instant rate quotes to find the best offer

Before refinancing again, shop around to see if you could qualify for a lower rate. Lenders such as SoFi and Earnest make it easy to get an instant rate quote.

To get a rate quote, you’ll just provide some basic information, such as your name, college and loan amount. The lender will then run a soft credit check, which won’t impact your credit report at all. Then, it will show you your prequalification offers and potential interest rates.

Check your rates with multiple lenders so that you can find the best offer and decide if it makes sense to refinance your student loans more than once.

How often should you refinance student loans? Final thoughts

Refinancing student loans has a number of financial benefits, so it stands to reason that refinancing more than once will only increase those benefits.

If your credit has improved or your income has risen since the last time you refinanced, you might be an even stronger candidate for a lower interest rate. What’s more, refinancing for a second time could allow you to restructure your debt in a way that better meets your present-day circumstances.

But be careful not to accidentally extend the life of your debt or overspend on fees. As long as you fully understand the terms and conditions, refinancing multiple times could work to your benefit.

Once your new loan is up and running, shift your attention to making on-time payments every month, or if possible, paying off your student loan ahead of schedule.

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