Student Loan Refinance Calculator
Calculate potential savings from refinancing your student loans at a lower interest rate.
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About the Student Loan Refinance Calculator
Refinancing student loans replaces your existing federal or private loans with a new private loan at a (hopefully) lower rate. The question isn't just 'is the new rate lower' — it's whether you're giving up valuable federal protections in exchange.
The Formula
Monthly savings = Old payment − New payment. Total interest savings = Old total interest − New total interest. Refinance only if the savings exceed what you might lose in federal benefits.
Worked Example
$60,000 federal student debt at 6.8% over 10 years = $691/month, $22,920 total interest. Refinance to 4.5% over 10 years = $621/month, $14,520 interest — saves $70/month, $8,400 lifetime. But you give up PSLF, income-driven repayment, federal forbearance options.
When refinancing makes sense
Strong case: stable high-income career (medicine, law, engineering), no plan to work in public service, private loans at high rates, excellent credit. Weak case: any chance of public-service employment, income-driven repayment savings exceed refinance savings, looming forbearance need (job change, family emergency).
The PSLF trap
If you're in a qualifying public-service job, every dollar you pay above the income-driven minimum is wasted relative to forgiveness. Refinancing erases your PSLF progress entirely. Confirm your PSLF status, certify employment, and stay on income-driven plans if forgiveness is in reach.
Variable vs fixed refinance rates
Variable rates start lower (sometimes 1-2% below fixed) but rise with market rates. If you plan to pay off in 1-3 years, variable can save money. For 5-10+ year repayment, fixed is safer.
Common Mistakes
- Refinancing federal loans before knowing your career path. Once private, you can't reverse it.
- Choosing the longest available term to lower the monthly payment. Refinancing for 20 years usually wipes out interest savings.
- Refinancing with a cosigner you can't release later if your finances change.
Frequently Asked Questions
Can I refinance federal loans back to federal?
No — there is no federal refinance program. Federal-to-private is one-way.
Does refinancing affect my credit?
Short-term yes (hard inquiry, new account). Long-term, lower utilization can help. Net effect is usually positive after 3-6 months.
This calculator is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a licensed professional before making significant financial decisions.