Is refinancing my student loan worth it?

Compare your current loan with a refinance offer: new payment, break-even month, and total interest saved — plus the federal protections you would give up.

What you still owe on the loan you would refinance.

Your current rate — federal undergraduate Direct Loans are 6.52% for 2026–27.

How many months are left on your current loan.

The rate the new lender offers you. Get real quotes — advertised rates assume excellent credit.

The new loan's term in months. A longer term cuts the payment but adds interest.

Origination or other fees the new lender charges. Many student loan refinances charge $0.

Estimate only — not financial advice. Refinancing a federal student loan into a private loan is permanent: you give up income-driven repayment (RAP/IBR), forgiveness programs including Public Service Loan Forgiveness, and federal deferment and forbearance. A lower rate can still be worth it for high earners with stable jobs and no need for those protections — but run the RAP vs IBR calculator first, and never refinance a loan you may need forgiven.

How refinancing works — and what it costs

Refinancing means taking out a new private loan to pay off your current loan. The math is the same as any refinance: a lower rate saves money each month, and the fees decide how long it takes for the saving to outweigh the cost.

But a federal student loan is not a car loan. Refinancing it into a private loan permanently gives up income-driven repayment (RAP and IBR), forgiveness programs including Public Service Loan Forgiveness, and federal deferment and forbearance. No private lender offers those. That is the real price of the lower rate, and it does not show up in the monthly payment.

So read the calculator in this order: first the break-even month (how long until the saving covers the fees), then the total interest saved, and only then the new monthly payment. If the break-even is longer than you will keep the loan, or if you might need forgiveness, do not refinance.

Frequently asked questions

What exactly do I lose by refinancing a federal loan?

Income-driven repayment (RAP and IBR), all forgiveness programs including Public Service Loan Forgiveness, and federal deferment and forbearance options. Once you refinance into a private loan, there is no way back to federal status.

Is refinancing ever worth it?

Sometimes. If you have a high, stable income, a strong credit score, and no need for income-driven repayment or forgiveness, a lower private rate can save real money. If your income is uncertain or you work in public service, the protections are usually worth more than the rate cut.

What is the break-even month?

Divide the fees by the monthly saving. If the fees are $500 and you save $50 a month, the break-even is 10 months — after that, the lower rate is pure saving. If the break-even is longer than you will keep the loan, refinancing loses money.

Can refinancing lower my payment but cost more overall?

Yes — and that is the point of the total interest row. A longer new term can cut the monthly payment while raising the total interest paid. Compare the total interest, not just the monthly number.

What should I check before I refinance?

Check your credit score first (most lenders want 650+ for their best rates), compare at least three lenders, and confirm whether the new loan has any prepayment penalty. And check the RAP vs IBR calculator before you give up federal status.

Where to go next

RAP vs IBR Calculator

Before you give up federal status, check what RAP or IBR would charge — the payment may be lower without refinancing.

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StudentAid.gov (official)

Federal Student Aid — confirm what protections your current loans actually have.

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Free tools from the same family, plus the official federal site. These links open in a new tab; we earn nothing from them.