FAQs

Student Loan Refinancing Frequently Asked Questions

Deciding to refinance is a big decision. These are the questions we receive most often from our borrowers.

What is student loan refinancing?

When you refinance your student loan, you borrow money from a lender to pay off your current loans. The amount of money you owe doesn’t change, but you save money by getting a lower interest rate than you currently have. Even a 1% difference in interest rates can save hundreds, even thousands of dollars over the life of the loan. You can also choose your repayment time frame. Choosing a longer repayment period can reduce your monthly payment choosing a shorter one will save you on interest.

You can use this calculator to see how much you can save by refinancing your loans through LendKey.

What is the difference between student loan refinancing and student loan consolidation?

Refinancing student loans saves you money because you have a new, lower interest rate. Consolidating loans just means combining multiple loans into one.

Why should I refinance?

If you want to save money, you should refinance your student loans. There are two ways to save by refinancing. Borrowers who refinance to a lower interest rate but for the same or a shorter time period may have a higher monthly payment but can save as much as $10,000-$30,000 over the life of the loan due to the lower interest rate.

For borrowers currently struggling to make their monthly payments, refinancing for a longer term, extending the life of the loan, can reduce those monthly payments considerably giving them some breathing room in their budgets. Look below for a testimonial from a happy customer who was able to reduce her monthly student loan payment by $300 when she refinanced through LendKey!

Can I refinance private and federal student loans together?

Yes! However, if you want to combine your federal and private student loans, you’ll have to do it through a private lender like Lendkey since the Federal Direct Consolidation Loan program does not consolidate private loans into Federal loans.

When a borrower refinances Federal loans, they do lose access to some repayment programs like Income-Based Repayment and Pay As You Earn.

LendKey Student Loan Refinancing FAQs

What are the requirements to refinance through LendKey?

A minimum loan balance of $5,000 and a maximum of $125,000 for undergraduate degrees, up to $250,000 for graduate degrees, and up to $300,000 for medical, dental, or veterinary degrees.
You are earning a minimum of $24,000 per year.
Your monthly debt payments are no higher than 33% of your monthly income.
Your credit score is at least 660 (Fair).
You graduated from a school that participates in Title IV federal student aid programs.
You are an American citizen or permanent resident. LendKey does not service borrowers in Maine, Nevada, North Dakota, Rhode Island or West Virginia.

What is the difference between a fixed rate loan & a variable rate loan?

The interest rate on a fixed rate loan stays the same for the life of the loan. Variable rate loans can fluctuate during the life of the loan with changes in the LIBOR rate.

Which is better? If you like the certainty of knowing exactly how much money you will owe each month or are going to take several years to pay off your student loan, the fixed rate is the better choice.

If you can pay your student loan off quickly, a variable rate loan may appeal to you because of the lower rates of interest they offer.

Does browsing my LendKey offers affect my credit score?

No, once you have provided LendKey some general information and current student loans, you will be able to see your preliminary loan offers. This does not affect your credit score at all.

What if I lose my job or am having trouble making my monthly payments?

When you refinance federal student loans, you do give up some protections like income-based repayment. But LendKey offers borrowers some protections.

Should you lose your job, you can snooze your payments for up to six months at a time, up to three times over the life of the loan. This option to defer payments for 18 months, is the longest offered in the student loan refinancing industry.