How it works
Refinancing student loans replaces your current mix of federal and private loans with one private loan at a new rate and term. The engine amortises the balance under both sets of terms — current rate and term versus new — and reports the monthly payment change plus the total-interest difference over the loan's life. The output separates two very different deals: refinancing to a lower rate on the same term saves real money with no downside beyond the lost federal protections; refinancing to a longer term 'saves' on the payment but can raise total interest even at a lower rate, because the clock stretches. The calculator uses the term you enter for both sides, so the honest comparison — same term, lower rate — is one click away. The trade nobody sees in the monthly payment: federal loans carry income-driven repayment, forgiveness programs and forbearance options only until they become private.
Formula
Payment(n) = P x r(1+r)^n / ((1+r)^n - 1), computed at both rate/term sets
Tips
- Refinance only the private portion if you want federal protections on the rest.
- Keep the same term when comparing — payment savings at a stretched term are borrowed from total interest.
- Private rates quoted well — 0.25% autopay discounts and variable-rate options shift the numbers.
- A refinance with a great rate is worse than no refinance if it costs you loan forgiveness you were counting on.
Frequently asked questions
- Should I refinance federal student loans?
- Only if you are certain you will not use income-driven repayment or forgiveness: refinancing converts federal loans to private, ending those protections permanently. The rate cut needs to be worth the lost safety net — and many borrowers correctly decide it is not.
- What rate can I get refinancing student loans?
- Excellent-credit borrowers see 5-7% in current markets; fixed rates run about a point above variable. Quoting several lenders in the same 14-30 day window counts as one credit pull — shop or the quote is fiction.
- How is this different from the student loan refinance I'd get at a bank?
- It is the same product; this calculator just reveals both halves of the deal — the rate change and the term change — as separate effects. Bank marketing leads with the lower payment, which is often just a longer term in disguise.
- What fees do I pay to refinance student loans?
- Generally none — lenders charge no origination or application fees, and there is no prepayment penalty. The costs hidden in the fine print are rate adjustments (variable rates, autopay discounts you could lose) and the value of federal protections you give up.