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Knowledge Hub / How Much Can You Save By Refinancing Student Loans?
How Much Can You Save By Refinancing Student Loans?

How Much Can You Save By Refinancing Student Loans?

Living with Student Loans
ELFI | June 13, 2024
How Much Can You Save By Refinancing Student Loans?

Student loan refinancing is a way to simplify your payments, save money and pay off your debt faster. When you refinance, you work with a lender to take out a new loan to replace your existing loans, and you could qualify for a lower rate or different repayment term. However, only some qualify for refinancing, and it’s not always a good idea. 

Should I refinance my student loans? It’s a common question, but whether it makes sense to refinance depends on the type of loans you have, your current interest rates and your financial goals. 

Refinancing Creates Breathing Room for Your Budget

Student loan debt is a growing problem, and many people are struggling to get a handle on their debt. 

As of 2023, the average student loan balance per borrower was $38,290. But in some professions, higher levels of debt are common because of the amount of education they require. For example, law school students take on substantially more debt than other borrowers. According to the American Bar Association, law school graduates had an average balance of $130,000 per borrower

How much you can save through refinancing depends on your existing balance, your rates and what loan options you can qualify for when you apply. However, at ELFI, our customers reported saving an average of $278 every month or seeing an average of $20,777 in total savings after refinancing their student loans with Education Loan Finance.

When To Refinance Student Loans

Refinancing is a smart way to manage your debt in the following scenarios: 

Learn more: How Soon Can You Refinance a Student Loan? 

When Not To Refinance Student Loans

Although refinancing can be beneficial for some borrowers, it’s not a good idea for everyone. If you are in the following scenarios, think twice about refinancing your debt: 

Who Qualifies for Student Loan Refinancing

Although borrower requirements vary by lender, you generally need to meet the following criteria to qualify for student loan refinancing: 

Risks of Student Loan Refinancing

Before refinancing your loans, make sure you fully understand the risks: 

Student Loan Alternatives To Refinancing

Although refinancing is one way to manage your debt, other strategies may be a better fit for you: 

Still have questions about if refinancing is right for you? ELFI’s personal Student Loan Advisors are ready to help answer them!