How This Calculator Works
Refinancing a student loan means a new lender pays off your existing loan(s) and issues you a single new loan — usually at a different interest rate and term. This calculator runs both loans through the same standard amortization formula lenders use, so you can see your new monthly payment side by side with your current one, plus how much interest you'd pay in total under each scenario. Any origination fee you enter is treated as an upfront cost that's subtracted from your lifetime savings.
Federal vs. Private: The Decision That Matters Most
The numbers in this calculator only tell part of the story if any of your current balance is federal student loans. Refinancing federal loans through a private lender is a one-way door — once it's done, that debt is private, permanently. You lose access to income-driven repayment plans (which cap payments as a percentage of your income), Public Service Loan Forgiveness and other federal forgiveness programs, and federal deferment or forbearance options, including any future emergency relief the federal government might offer. Private student loans generally don't carry these protections in the first place, so refinancing a private loan into another private loan with a better rate is a much more straightforward decision.
When Refinancing Makes Sense
Refinancing tends to make the most sense when you have stable income, strong credit (or a creditworthy cosigner), and either don't need federal protections or have already used the ones that matter to you (for example, you've completed PSLF). A meaningfully lower interest rate — even half a percentage point on a large balance — can save thousands over a 10-year term. Keeping the same term while lowering the rate improves your numbers on every line of this calculator; shortening the term raises your monthly payment but can cut total interest dramatically, while lengthening it lowers your payment but often increases total interest even at a lower rate.
Origination Fees and Other Costs
Many student loan refinance lenders charge no origination fee, but some do, and a few build the cost into a slightly higher rate instead. If you're comparing multiple offers, ask each lender for the APR (which factors in fees) rather than just the nominal interest rate, and enter any flat origination fee above so it's counted against your lifetime savings. Also check for prepayment penalties (rare for student loans, but worth confirming) and whether the rate is fixed or variable — this calculator assumes a fixed rate for the life of the new loan.
Reading Your Results
The verdict line summarizes whether the new loan beats your current one on a monthly basis, over the life of the loan, both, or neither. "Lifetime savings" nets out the origination fee against the difference in total interest paid, so a small fee on a large rate improvement usually still comes out strongly positive — while a "no fee, slightly lower rate but much longer term" offer can sometimes look better monthly while costing more overall.