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Bottom Line Up Front

  • If you’re looking to lower your interest rate or pay off debt sooner, refinancing student loans may help.
  • Ask questions about terms and conditions, APR, rate (fixed or variable) and loan length to understand what’s best for you.
  • If you’re still building credit, a co-signer could help you qualify or get a lower rate.

Time to Read

4 minutes

June 23, 2022

If you’re a college grad making regular payments on your student loans, refinancing could help.1 You could simplify loan repayment, lower your monthly payment and/or reduce the overall interest you pay on your student loans.

As you think about your student loan repayment options, here are some important things to consider.

Questions to Ask Yourself

What do I hope to accomplish by refinancing?

Want to lower your interest rate, repay your debt faster or free up cash? Do you have multiple loans and want to streamline things so you have just one payment? Some lenders, like Navy Federal Credit Union, offer student loan refinancing

If you have federal student loans, review all their benefits such as income-based repayment plans, loan forgiveness for public service or certain forbearance and deferment options. You could lose those benefits when refinancing, so consider if a lower interest rate, lower monthly payments or more time to pay back your debt is worth it before making a decision.

What’s my credit score?

While federal student loan rates are set by federal law and aren’t based on your credit score, private student loans rates are generally determined by your credit score and history. If your score improved since you took out your student loans, you may be eligible for lower interest rates.

When do I need a co-signer?

If you’re building your credit, adding a co-signer may help you qualify and get a lower rate. Some lenders, like Navy Federal Credit Union, will allow you to request a co-signer release after you make a certain number of on-time payments.

Do I have Servicemembers Civil Relief Act (SCRA) benefits?

For servicemembers with loans taken out before entering Active Duty military service, the SCRA provides a variety of protections, including an interest rate cap of 6%. Some credit unions, like Navy Federal, may offer lower rate caps. If you’re on Active Duty when you refinance or consolidate, the new loan won’t be covered under the protections of SCRA since it will no longer be considered a pre-service loan.

Questions for Your Lender

Do you offer a variable or fixed interest rate, and what are the current rates?

Fixed rates are more predictable for budgeting, since you’ll have the same payment every month. However, you might get a lower rate in a variable interest rate loan. The difference is that a variable rate can change depending on the market rate (sometimes called the “index”). That means your monthly payment could also change. Check out Navy Federal’s refinance loan rates to see if they’re lower than the rates on your current student loans.

What are the terms and conditions?

The repayment terms and conditions of your loan are the things you and your lender agree on. These include when your monthly payments begin, how much they’ll be and whether there are fees for late payments or safety nets for hardships like the loss of a job. Find out if you can reduce your interest rate by scheduling automatic payments, a benefit offered with Navy Federal’s student loans.2

What is the term of my new refinanced loan?

The term of the loan is different from the terms and conditions. It’s the length of time you agree to repay the loan (like 5, 10 or 15 years). Longer terms mean you’ll probably have a lower monthly payment. Shorter terms mean you’ll probably have a higher monthly payment, but you could pay less in interest over the life of the loan. Choose the option that works best for your financial situation.

When you’re ready to connect with a lender, see if refinancing with Navy Federal makes sense for you. It just might be the solution you’re looking for.

Next Steps Next Steps

  1. If you’re considering refinancing your student loans, have your questions ready for your lender and see if refinancing is right for you.
  2. Have you checked your credit report? If you’re going to apply for a student loan refinance, be sure your credit report is accurate. You’re entitled to a free credit report every 12 months at



Eligible federal student loan payments and interest have been suspended by the government through Aug. 31, 2022. If you have federal student loans, we recommend reviewing your current and potential future benefits before refinancing.


Automatic Payments Discount: The discount requires continued enrollment of automatic payments. The borrower authorizes automatic payments from a personal account via Automated Clearing House (ACH). If automatic payments are canceled at any time after enrollment, the rate reduction will not apply until the automatic payments are reinstated. Automatic payments may be suspended during periods of forbearance and deferment. For variable-rate loans, the APR, including the 0.25% rate reduction, may not fall below the floor rate.

This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.