Compare your current loan against a refinance offer: savings, break-even, total cost
Refinancing pays when the rate drop is big enough to matter. On a $38,500 balance with 10 years left, going from 7.49% to 5.99% cuts the payment from $456.80 to $427.24, saving $29.57 a month and $3,548 in lifetime interest. Most big lenders (SoFi, Earnest, Credible partners) charge $0 in fees, so break-even is immediate, but refinancing federal loans trades away the Repayment Assistance Plan and federal forgiveness for good. The lowest advertised 5-year fixed rates in late August 2026 sit near 3.99% to 4.45% for top-tier credit.
Interest figures compare each loan over its own full term. Payment comparisons are only apples-to-apples when the terms match; a longer new term lowers the payment but usually raises total interest.
| Current Rate | Current Payment | Monthly Savings | Interest Saved |
|---|---|---|---|
| 6.39% | $395.46 | $7.07 | $848 |
| 7.49% | $415.27 | $26.88 | $3,225 |
| 8.49% | $433.76 | $45.37 | $5,444 |
| 9.49% | $452.70 | $64.30 | $7,716 |
The pattern: every extra point of rate on a $35,000 balance is worth roughly $2,300 over a 10-year payoff. Small rate cuts on small balances barely move the needle. Big cuts on big balances do.
| Lender | Fixed APR Range | Variable APR Range | Notes |
|---|---|---|---|
| SoFi | 3.99% – 10.99% | from 5.74% | 5-yr fixed 3.99% – 9.80% with all discounts, as of 8/27/26 |
| Earnest | 4.49% – 9.99% | 5.88% – 9.99% | Includes 0.25% autopay discount; ~650 min credit score |
| Credible marketplace | from ~3.99% | from ~3.62% | Aggregates multiple lenders, one form |
| Federal Direct (for comparison) | 6.39% undergrad (2025-26) | n/a | Federal rates are fixed; PLUS runs 8.94% |
Advertised floors require top-tier credit (mid-700s+), steady income, and often autopay enrollment. Most borrowers land well above the floor. Rates move weekly, so treat this as a snapshot and get quotes from at least three lenders. Sources: lender rate pages and Credible/NerdWallet/Bankrate roundups, August 2026.
The engine is standard amortization, run twice. Your current payment comes from your balance, rate, and remaining term. The refinance payment comes from the same balance at the new rate and new term (fees you pay upfront stay out of the loan; the calculator assumes any financed fees would be added by the lender's quote). Savings is the gap between the two payments, and lifetime interest is the total interest each schedule produces over its own term.
Payment = P × r × (1+r)^n ÷ ((1+r)^n − 1), where P is the balance, r is the annual rate divided by 12, and n is the number of monthly payments. Break-even months equals upfront fees divided by monthly savings. With $0 fees, which is the norm at the major lenders, break-even is day one.
Take the defaults: $38,500 at 7.49% with 120 months left. The payment is $456.80 and the loan will cost $16,316 in interest if you ride it out. Refinance to 5.99% over the same 120 months and the payment drops to $427.24, saving $29.57 a month, with total interest of $12,768. That's $3,548 back in your pocket, and with no fees the break-even is instant.
Second example, at a bigger scale: $60,000 at 6.8% for 10 years costs $690.48 a month. Refinancing to 5.25% cuts that to $643.75, a $46.73 monthly savings and $5,608 less interest. If that lender charged a $500 fee, break-even would land at 10.7 months, so anyone planning to keep the loan more than a year comes out ahead.
Lenders love quoting a lower payment that quietly comes from a longer term, not just a lower rate. Refinancing $60,000 at 6.8% over 10 years ($690.48) into 5.25% over just 5 years raises the payment to $1,139.16 even though the rate fell. The calculator shows total paid for each path so you can see the trade: shorter terms cost more per month but far less overall.
This is the part no rate table captures. Federal loans carry income-driven options, and since July 1, 2026 the Repayment Assistance Plan caps payments between 1% and 10% of income with a $10 floor, waives interest your payment doesn't cover, and forgives the rest after 360 payments (30 years). Private refis have none of that: fixed payments, limited hardship options, and no federal forgiveness, permanently. If your income is stable and your rate is well above current offers, refinancing federal debt can still win. If your income is shaky, price the federal side first with our RAP calculator before you sign anything.
Middle paths exist. You can refinance a subset (say, just a high-rate grad PLUS loan) and keep the rest federal. You can refinance once, then again later if rates fall further; there's no limit on refinance count, though each application triggers a hard credit pull.
It usually comes down to two numbers: how far your rate drops and how long you keep the loan. On a $38,500 balance, moving from 7.49% to 5.99% saves $29.57 a month and $3,548 in interest over a 10-year term. A drop under half a point rarely clears the hassle, while a 1.5 to 3 point drop on a five-figure balance saves thousands.
Most lenders want a credit score in the mid-600s at minimum, but the advertised low rates go to borrowers in the mid-700s and up with steady income and a low debt-to-income ratio. Lenders like Earnest list a minimum around 650. If your score sits below that, a creditworthy cosigner usually unlocks the better tier, and most large lenders offer cosigner release after a set number of on-time payments.
As of late August 2026, the lowest advertised 5-year fixed rates run from about 3.99% (SoFi, with all discounts) to 4.45% (Earnest), with typical fixed ranges topping out near 10% to 11% depending on credit and term. Variable rates start lower, around 3.6% to 5.9% at the very best credit tiers. Rates move weekly, so treat any table as a snapshot and shop at least three lenders.
Usually nothing upfront. The major refinance lenders, including SoFi, Earnest, and the lenders on Credible's marketplace, charge no origination fees and no prepayment penalties. That means the classic break-even math on fees often collapses to zero months. The real cost is what you give up, because refinancing federal loans into a private loan permanently ends access to federal plans like the Repayment Assistance Plan, deferment options, and federal forgiveness paths.
Only if you're confident you won't need federal protections. Federal loans carry income-driven plans, the new Repayment Assistance Plan with payments as low as $10 a month, and forgiveness after 360 payments (30 years) on that track. Refinancing converts the debt to a private loan and there is no way back. Borrowers with strong credit, stable income, and rates above about 7% who simply want the loan gone fastest are the typical winners. Everyone else should price the federal options first.
Rate shopping causes a small, temporary dip. Most lenders run a soft credit pull for the initial quote, which doesn't affect your score at all. Once you accept an offer, the hard pull and the new loan account can shave a few points for a few months. Multiple hard pulls for the same purpose inside a 14-to-45 day window are usually scored as one shopping event.