How Often Can You Refinance Student Loans? (2024)

Refinancing your student debt can have many benefits, including saving money on interest, lowering your monthly payments or changing your repayment terms.

With so many advantages, you might wonder just how often you can refinance your student loans—and when it might be a better idea to wait. See what to consider before refinancing multiple times.

How Does Student Loan Refinancing Work?

When you refinance a student loan, you take out a new loan (ideally, one with lower interest rates or better terms) and use that to pay off your existing education debt. Refinancing can be a useful way to lower your monthly payment, save money on interest or adjust your repayment timeline.

Your first step should be researching and comparing refinance lenders. Consider lenders that offer low interest rates, few fees and perks like flexible forbearance periods or a co-signer release, if needed.

Many lenders let you prequalify for a loan. To do so, you’ll submit some basic information about yourself before the lender does a soft credit check. Once you prequalify, you can compare the estimated interest rates, repayment terms and monthly payments you may qualify for.

After you’ve narrowed down your desired lenders, you can submit an application online. Be prepared to provide personal information including your Social Security number, driver’s license and recent income and tax documents. If approved, your refinance lender will typically pay off your old student loans directly. Once that’s complete, you’ll begin making payments to the refinance lender.

How Many Times Can You Refinance Student Loans?

There’s no limit on how many times you can refinance a student loan. And because many lenders do not charge prepayment penalties or origination fees, there is often no extra cost associated with student loan refinancing.

Some borrowers might refinance more than once to take advantage of low interest rates. Borrowers with poor credit may refinance their loans multiple times as their credit score improves and they become more desirable candidates.

But just because you can theoretically refinance your student loans an infinite number of times doesn’t mean you should. For example, if your goal is to save money on your education debt, you may prioritize refinancing to lock in a lower interest rate. But after a certain amount of time, it may be impossible to find a lower interest rate than what you already have. At that point, refinancing again wouldn’t serve a purpose.

Pros and Cons of Refinancing Multiple Times

Pros

For many borrowers, the best part of refinancing student loans multiple times is the ability to pay less in total interest. If you can refinance to a lower interest rate, you may be able to save hundreds or even thousands in interest.

Some borrowers choose to refinance multiple times to get the lowest monthly payment possible. If you extend your repayment timeline, for example, you could lower your monthly bill. By doing so, borrowers can free up cash for other goals, such as investing for retirement, paying off high-interest debt or saving for a house.

However, extending your repayment term typically results in more interest paid over the life of the loan. A refinancing calculator can help you see exactly how your debt is affected when you change your interest rate or repayment term.

Cons

Refinancing often takes a good amount of research and comparison to find the best deal. The process may not always be worth the time and effort if you won’t save much money or earn any real benefits with your new loan.

Refinancing frequently can also have an impact on your credit. Each time you submit a loan application, the lender will complete a hard credit check, which can negatively affect your credit score. In addition, regularly opening and closing new loan accounts can also be reflected on your credit in potentially harmful ways.

When to Consider Refinancing Again

There’s no exact formula to decide if or when you should refinance your student loans again. It largely depends on the interest rate you currently have, the rates that are currently available and your overall financial goals.

If your financial situation has gotten better since you last refinanced, you may benefit from doing so again. For example, if your income or credit has significantly improved, you may now qualify for better rates than you did a year ago.

Larger economic trends may also influence your decision. If interest rates are generally low across all types of borrowing, you might find better rates now than when you last refinanced. Similarly, if rates are expected to rise soon, you may choose to refinance now to lock in a low rate.

If you previously had to use a co-signer to refinance and have since improved your credit, you may now qualify to refinance by yourself and remove the co-signer. Your loan appears on your co-signer’s credit report, so it’s helpful to remove them if you can.

What to Consider Before Refinancing

One of the most important things to review before refinancing is the type of student debt you have. If you have federal student loans, refinancing will convert them into private debt and you’ll lose all related federal benefits, including income-based repayment plans, more flexible forbearance programs and access to loan forgiveness programs.

Refinancing is permanent and cannot be undone. For that reason, carefully consider if you should refinance your federal student loans and make sure you won’t need access to those federal perks in the future.

You should also review your own credit before refinancing. Check your credit score and see if you’re able to qualify for a competitive loan on your own. If you will need a co-signer to get the best deal, weigh the pros and cons of this strategy before moving forward.

Lastly, think about your other financial goals and how refinancing might affect them. If you’re about to apply for another loan—especially a mortgage—refinancing could impact the interest rate a mortgage lender gives you. And because mortgages are so large and last so long, that interest rate difference could result in you paying tens of thousands more over the life of the loan.