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Getting a personal loan is typically a simple process but many lenders require at least a good credit rating and a stable income for approval. Banks tend to have stricter qualification requirements than private lenders. The type of personal loan you get — secured or unsecured — can also have an impact on how hard the loan is to get.

Once approved, a personal loan offers a lot of flexibility — you can use the funds for a wide variety of expenses, from planned home repairs to unexpected medical bills. Unlike loans with a specified purpose, like an auto loan or mortgage, personal loan funds can be used for virtually any type of expenditure.

Here’s what you need to know about personal loans and how to increase the chances that you’ll qualify.

Types of Personal Loans

A personal loan is essentially a lump sum of money borrowed from a bank, credit union or online lender that you pay back in fixed monthly payments, or installments. Lenders typically offer loans from $1,000 to $50,000, and this money can be used for virtually any purpose. Repayment terms can range from two to seven years.

While there are many different types of personal loans, they can be broken down into two main categories: secured and unsecured. Here’s how the two types of personal loans work:

•   Secured personal loans are backed by collateral owned by the borrower such as a savings account or a physical asset of value. If the loan goes into default, the lender has the right to seize the collateral, which lessens the lender’s risk.

•   Unsecured personal loans do not require collateral. The lender advances the money based simply on an applicant’s creditworthiness and promise to repay. Because unsecured personal loans are riskier for the lender, they tend to come with higher interest rates and more stringent eligibility requirements.


💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.

Getting a Personal Loan From a Bank

In addition to the type of personal loan you choose, the lender you borrow from can have an effect on how hard the loan is to get. For many borrowers, their bank is an obvious first choice when the time comes to take out a personal loan.

Banks sometimes offer lower interest rates than other lenders, particularly if you’re already an account holder at that bank. However, they may also have steeper eligibility requirements, such as a higher minimum credit score. Compared to an online lender, banks tend to have a more time-consuming application process, and the loan may take longer to disburse.

Still, the convenience of utilizing the bank you’re already familiar with and the comfort of in-person customer service may be worth the trade-off for qualified borrowers.

Getting a Personal Loan From a Private Lender

A private online lender is a non-institutional lender that is not tied to any major bank or corporation. Online lenders are less regulated than banks, allowing faster application processes and more lenient eligibility requirements. However, some online lenders will have higher interest rates and fees compared to traditional banks, so it’s key to shop around. One of the biggest advantages of a private online lender is convenience. You can complete the entire process online and funding is typically available within the week.

Recommended: What Are Personal Loans & How Do They Work?

Is It Harder to Get a Personal Loan From a Bank or Private Lender?

Generally speaking, it may be more difficult to get a personal loan from a bank than a private lender — but your best bet is to shop around and compare a variety of personal loan options, then see where you’ll get the best interest rate.

Here are the basic differences between getting a personal loan from a bank versus a private lender at a glance:

Is It Easier to Get a Small Personal Loan?

Generally, yes. Loan size is another important factor that goes into how hard it is to get a personal loan. It’s much less risky for a lender to offer $1,000 than $50,000, so the eligibility requirements may be less stringent — and interest rates may be lower — for a smaller loan than for a larger loan.

That said, there are exceptions to this rule. Payday loans are a perfect example. Payday lenders offer small loans with a very short repayment timeline, yet often have interest rates as high as 400% APR (annual percentage rate). Even for a smaller personal loan, it’s generally less expensive to look for an installment loan that’s paid back on a monthly basis over a longer term.

Recommended: How Much of a Personal Loan Can I Get?

What Disqualifies You From Getting a Personal Loan?

There are some financial markers that can disqualify you from getting a personal loan, even with the most lenient lenders. Here are a few to watch out for.

Bad Credit

While the minimum required credit score for each lender will vary, many personal loan lenders require at least a good credit score — particularly for an unsecured personal loan. If you have very poor credit, or no credit whatsoever, you may find yourself ineligible to borrow.

Lack of Stable Income

Another important factor lenders look at is your cash flow. Without a regular source of cash inflow, the lender has no reason to think you’ll be able to repay your loan — and so a lack of consistent income can disqualify you from borrowing.

Not a US Resident

If you’re applying for personal loans in the U.S., you’ll need to be able to prove residency in order to qualify.

Lack of Documentation

Finally, all of these factors will need to be proven and accounted for with paperwork, so a lack of official documentation could also disqualify you.

How to Get a Personal Loan With Bad Credit

If you’re finding it hard to get a personal loan, there are some steps you can take to improve your chances of approval. Here are some to consider.

Prequalify With Multiple Lenders

Every lender has different eligibility requirements. As a result, it’s worth shopping around and comparing as many lenders as you can through prequalification. Prequalification allows you to check your chances of eligibility and predicted rates without impacting your credit (lenders only do a soft credit check).

Consider Adding a Cosigner

If, through the prequalification process, you find that you don’t meet most lender’s requirements, or you’re seeing exorbitantly high rates, you might check to see if cosigners are accepted.

Cosigners are family members or friends with strong credit who sign the loan agreement along with you and agree to pay back the loan if you’re unable to. This lowers the risk to the lender and could help you get approved and/or qualify a better rate.

Include All Sources of Income

Many lenders allow you to include non-employment income sources on your personal loan application, such as alimony, child support, retirement, and Social Security payments. Lenders are looking for borrowers who can comfortably make loan payments, so a higher income can make it easier to get approved for a personal loan.

Add Collateral

Some lenders offer secured personal loans, which can be easier to get with less-than-ideal credit. A secured loan can also help you qualify for a lower rate. Banks and credit unions typically let borrowers use investment or bank accounts as collateral; online lenders tend to offer personal loans secured by cars.

Just keep in mind: If you fail to repay a secured loan, the lender can take your collateral. On top of that, your credit will be adversely affected. You’ll want to weigh the benefits of getting the loan against the risk of losing the account or vehicle.


💡 Quick Tip: If you’ve got high-interest credit card debt, a personal loan is one way to get control of it. But you’ll want to make sure the loan’s interest rate is much lower than the credit cards’ rates — and that you can make the monthly payments.

The Takeaway

You can use a personal loan for a range of purposes, such as to cover emergency expenses, to pay for a large expense or vacation, or to consolidate high-interest debt. Personal loans aren’t hard to get but you usually need good credit and a reliable source of income to qualify. The better your financial situation, generally the lower the interest rate will be.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

FAQ

Is it hard to get a personal loan?

Personal loans aren’t necessarily hard to get but you typically need good credit and reliable income to qualify. Secured personal loans (which require pledging something you own like a savings account or vehicle) are generally easier to qualify for than unsecured personal loans

Is it hard to get a personal loan from a bank?

Banks tend to have more stringent qualification requirements for personal loans than private online lenders. Getting a personal loan from a bank can be a good move if you have good to excellent credit, an existing relationship with a bank, and time for a longer approval process.

What disqualifies you from getting a personal loan?

You will be disqualified for a personal loan if you do not meet a lender’s specific eligibility requirements. You may get denied if your credit score is too low, your existing debt load is too high, or your income is not high enough to cover the loan payments.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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It’s possible to refinance your student loans with bad credit, but you may face challenges getting approved with a low credit score. This may also lead to a higher interest rate.

When you refinance your student loans, a private lender will take a look at your credit score to evaluate how well you’ve paid off debt in the past. A higher credit score may improve your chances of approval and could help you secure a more competitive interest rate. But your credit score isn’t the only factor lenders review. Lenders typically also take a look at your income, current employment situation, and financial history.

Read on for strategies to refinance student loans with bad credit.

What Is Student Loan Refinancing?

Refinancing student loans means that you take some or all of your student loans and replace them with one new loan to achieve a repayment advantage. For example, you may refinance in order to get a lower interest rate and, as a result, pay less over the life of your loan. You may also refinance to extend your loan term, which will lower your monthly payments (but doing so will also result in paying more interest over time).

You can refinance both private and federal student loans. As you are deciding when to refinance student loans it’s important to understand that if you refinance federal student loans, you lose certain benefits with your loan, such as deferment and public service-based loan forgiveness.


💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

What Is Considered Bad Credit?

Your credit score is a three-digit number that shows how well you pay back debt.

What is a bad credit score? The definition of “bad credit” varies depending on the credit scoring model used. A credit scoring model is a statistical analysis used by credit bureaus to evaluate your creditworthiness. “Bad credit” simply means that your credit reports, or records of how well you’ve paid off debt, reveal negative credit actions that you’ve had in the past.

According to FICO®, one of the most popular scoring models, a bad credit score is anything below 670. Another popular scoring model, VantageScore, considers a bad credit score below 661. To put it in perspective, a credit score ranges from 300 to 850.

Some lenders require a minimum credit score to refinance student loans. Requirements vary by lender, so check in with the lenders you are considering to understand their minimum requirements. And keep in mind that lenders evaluate factors beyond just your credit score when making lending decisions.

Strategies for Refinancing With Bad Credit

If you plan on refinancing student loans with bad credit, you may want to consider backtracking and checking your credit reports. There may be mistakes on your credit reports that are hurting your credit score. For example, you have already paid off a particular loan but your credit report shows that you haven’t yet.

You can obtain a free copy of your credit report at AnnualCreditReport.com from each of the three major credit bureaus — Equifax, Experian, and TransUnion — which track your credit.

There are other strategies you can consider as well: refinancing with a cosigner, improving your credit score or debt-to-income (DTI) ratio, looking into credit unions, considering nonprofit debt consolidation, checking into secured loans, and looking for lenders with lower credit requirements. Let’s take a look at each option for student loan refinance for bad credit.

Refinance With a Cosigner

If you have a relatively low credit score, applying with a cosigner increases your chances of getting approved for a student loan refinance.

Refinancing student debt with a cosigner means that you ask someone else to agree to help you repay a loan along with you. Cosigners are equally obligated to repay a student loan and are liable if you fail to repay your loan. Any missed payments will affect both you and your cosigner’s credit history.

Build Your Credit Score

You can build your credit score by making payments on time to your creditors, catching up on accounts for which you still owe money, and limiting credit applications. Let’s take a look at all of these student loan refinance need to know opportunities to build your credit score:

•   Make on-time payments: Making all payments on time is one of the best ways to improve your credit score. You may want to consider setting up auto pay to avoid missing or making late payments.

•   Pay off delinquent or defaulted accounts: If you have accounts for which you still owe money, pay them off. Pulling all accounts up to “paid” status can help your credit score. If you think you need help organizing and prioritizing, you may want to reach out to a credit counselor for assistance. It’s also a good idea to get current on revolving credit balances (such as credit cards and other lines of credit) because paying late or skipping payments can hurt your credit as well.

•   Limit credit applications: Continually applying for credit can hurt your credit score because every time a lender does a hard credit check, your credit takes a small hit. All of those credit checks can slow your progress in improving your credit score.

Building credit by doing things like making on-time payments is one of the best ways to improve your credit score. Use credit cards responsibly and pay off the balance each month, get a secured credit card, or become an authorized user on another individual’s credit card.

Improve Your Debt-to-Income Ratio

What is a debt-to-income (DTI) ratio? DTI refers to your monthly debt payments divided by your gross monthly income — the amount of money you have coming into your household.

The best way to improve your DTI is to reduce your debt payments each month or add more income to your household each month. There are several ways to make this happen: paying off your debt (including credit cards, personal loans, auto loans), adding a second or side job to your already-existing income, negotiating a raise at work, working overtime, or applying for a higher-paying job.

Recommended: Why Your Debt to Income Ratio Matters

Check Credit Union Requirements

In addition to banks, online lenders, and other types of lenders, credit unions also offer student loan refinancing opportunities. A credit union is a non-profit financial services cooperative that exists to serve its members. You must be a member of a credit union in order to borrow money from it.

If you already belong to a credit union, consider finding out the credit qualifications necessary for refinancing student loans with that credit union. Shop around among credit unions or other alternative banking solutions to learn more about interest rates, overall payoff amounts, repayment flexibility, and how well each institution treats its customers.

Nonprofit Debt Consolidation

Nonprofit debt consolidation can help you put all of your debts into one manageable payment. It offers a two-pronged advantage: You lower your monthly payment and eventually eliminate unsecured debt, which is debt that isn’t backed by collateral.

Credit card debt is a good example of a debt not backed by collateral. A mortgage, on the other hand, is backed by collateral — the collateral is the home that you borrowed money to purchase. A student loan is a type of unsecured debt because it is not backed by collateral.

Why tap into a nonprofit credit counseling agency for help? They must act in your best interest, though you will have to pay fees for the service. Trained debt counselors can help you come up with a debt payment plan, debt settlement plan, debt consolidation loan, or, if absolutely necessary, declare bankruptcy.

It’s important to note that only unsecured debt is eligible for consolidation.

Secured Loans

Secured loans are backed by collateral, such as a car (in the case of an auto loan) or a house (in the case of a mortgage). If you stop making your payments, the lender can take the collateral backing your loan (the auto or home) to satisfy the debt.

Generally, personal loans are unsecured and can be used for almost any expense. However, some personal loans may be secured by some form of collateral. When evaluating a secured vs. unsecured personal loan, look at things like the interest rate and the type of collateral required to back the loan. Keep in mind that collateral can be seized by the lender if there are issues with repayment.

However, you can use a secured loan to pay for a student loan refinance if you find better terms through a secured loan. For example, you could choose to get a second mortgage to pay for educational expenses.

Unsecured debt is usually considered riskier by lenders (because it isn’t backed by collateral) and may come with a higher interest rate, which is why secured debt may seem more appealing.

Look for Lenders With Lower Credit Requirements

Think you’re ready to pursue a student loan refinance with lower credit requirements? Let’s take a look at the pros and cons of doing so.

In order to get the best rates and terms, you may want to consider beefing up your credit score before you apply for a refinance. Consider taking a look at a calculator for student loan refinancing to help you learn about the costs.

Alternatives to Refinancing Student Loans

Refinancing your student loans isn’t your only option. Keep in mind that refinancing federal loans eliminates them from federal programs and protection like income-driven repayment (IDR) plans. You may also want to consider a few alternatives, including consolidation, forgiveness, deferment, or forbearance (for federal student loans), or talk to your lender about your options.

•   IDR plans: The U.S. Department of Education has a website called Federal Student Aid where student loan holders can find four types of IDR plans. They are, with the repayment terms, as follows:

◦   IDR Pay As You Earn (PAYE) Plan: 20 years

◦   Saving on a Valuable Education (SAVE) Plan: 10 or 25 years

◦   Income-Based Repayment (IBR) Plan: 20 or 25 years

◦   Income-Contingent Repayment (ICR) Plan: 25 years

•   Consolidation: Consolidation allows you to combine all of your federal student loans into one monthly payment with one servicer. Consolidation won’t lower your interest rate — the new rate is the weighted average of your existing interest rates. You cannot consolidate private student loans — you may only refinance them.

•   Forgiveness: If you have federal student loans, you may want to consider looking into student loan forgiveness options, which means that you do not have to repay your loans in part or full if you meet specific requirements. For example, you may be able to tap into teacher loan forgiveness, Public Service Loan Forgiveness (PSLF), income-driven repayment plans, military service forgiveness, or other options.

•   Deferment or forbearance: Deferment and forbearance allow you to temporarily postpone or reduce your payments. Borrowers with federal loans may qualify to defer repayment due to cancer treatment, economic hardship, graduate school, military service and post-active student duty, rehabilitation training, unemployment, and more. Private lenders may have their own programs for forbearance. Check in with your private lender directly.

•   Talk to your lender or loan servicer: You can also talk through all your payment options with your loan servicer. If you’re having trouble making your payments, explain how and why (and be prepared to show proof).

The Takeaway

Borrowers with a low credit score (a bad credit score is defined as a FICO score below 670 or a VantageScore below 661), may find it challenging to get a student loan refinance with bad credit without a cosigner.

However, there are other avenues you can take for student loan refinancing with bad credit, including improving your credit score, improving your DTI, researching options with a credit union, non-profit debt consolidation, or getting a secured loan. You may also want to consider alternatives to refinancing private student loans with bad credit if you have federal student loans, through consolidation, forgiveness, deferment, or forbearance. You may also try talking to your lender or loan servicer for all your options, asking them about alternative options to refinance a student loan with bad credit.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

Photo credit: iStock/Vladimir Vladimirov

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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If you are feeling the weight of your student loans, you are not alone. Student debt is currently the second largest kind of debt in the US after mortgages, and it can feel as if it’s taking a very long time to pay it off. Some borrowers find that a cash-out refinance, which allows you to tap into the equity in your home and receive cash back at closing, can be a good move. In some cases, it may allow for payment terms that better suit your budget and needs.

However, a student loan cash-out refinance isn’t the right choice for everyone. It can be helpful to weigh the pros and cons to help you decide if it makes sense for your personal financial situation. Read on to learn the definition of refinancing student loans, what a cash-out refinance is, and what the upsides and downsides are.

Refinancing to Pay Off Student Loans

Before considering a cash-out refinance, let’s review what refinancing is. Typically, student loan refinancing means that a lender pays off your existing loans with a new student loan ideally at a lower interest rate, which can save you money over time.

If you have some type of federal student loans, you can only refinance with a private lender, which means losing certain federal student loan benefits and protections, such as income-driven repayment and forgiveness plans.
Also, it’s important to note that if you refinance for an extended term, you may well pay more interest over the life of the loan, even if your monthly payment is lower.

Calculate paying off your student loan before you decide whether this method makes sense for you.

Next, consider a different option. If you are a homeowner, you might look into a cash-out home refinance. This is a very different financial arrangement than a student loan refinance. When you complete a cash-out refinance, you are refinancing a home loan to tap the equity in your home and then use the funds to pay down or off your student loans.


💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

What Is a Student Loan Cash-Out Refinance?

Here’s a closer look at the last option mentioned above, which can be a good path for some borrowers. If you own a home and have student loan debt, you can roll your student loan into your mortgage using a student loan cash-out refinance.

Here’s how cash-out refinance works: You get a mortgage loan that allows you to tap into your home’s equity to pay off your student loan debt. You consolidate your mortgage loan and your student debt. You also get a lump sum of money upon closing, which comes out of your home’s equity, and can be put toward your student loan debt.

If your home is valued at $450,000 and you have a $300,000 mortgage and over $50,000 in student loan debt, you might take out a cash-out refinance loan for $350,000 and get $50,000 to pay off your student loans. You would then have eliminated that educational debt, but now owe more against the value of your home.

Some notes:

•   To qualify, you typically must have a credit score (a number that indicates how likely you are to pay back a loan on time) of at least 620 to get a mortgage that isn’t from a government agency.

•   You also generally need to have a debt-to-income ratio (DTI) of under 43%, which refers to your monthly debt payment compared to your monthly gross income.

•   You’ll also need at least 20% of equity in your home in order to take advantage of a cash-out refinance.
Your lender pays off your first mortgage, which results in a new mortgage loan, which probably has different terms than your original loan (a different type of loan and/or a different interest rate).

How Cash-Out Refinance Works for Student Loans

Typically, you can borrow up to 80% of your home’s equity. Equity refers to the difference between the current value of your home and the amount of money you owe on your mortgage.

To get a student loan cash-out refinance, you can prequalify and choose the right mortgage refinancing option for you. Your lender will detail the interest rate and monthly payments that fit your goals.

Once your application has been approved, you’ll sign your paperwork. Your lender will pay off your student loan at closing by sending the cash to your student loan servicer to take care of your student loan debt.

Taking out money for a cash-out refinance means you just move debt from one location to another. Ultimately, you still have to pay off that debt — it just takes a different form.

Recommended: Cash-Out Refinance vs HELOC

Pros of Cash-Out Refinance for Student Loans

Why might you want to use a cash-out refinance to pay off student loans? Here are some of the reasons why it might be a good choice.

•   You could get a better interest rate. Before you refinance, you want to make sure you’re getting a lower interest rate than your current student loan interest rate and your current mortgage interest rate.

Calculating the new interest amount will tell you whether you’ll save money. (You’ll also want to figure in any fees.) If you lengthen your loan term along with your cash-out refinance, you may lower your monthly payments but pay more interest over the long run.

•   You may tap into tax deductions. The interest you pay on student loans and your mortgage are both typically tax-deductible. However, you’ll have to itemize deductions if you choose a cash-out refinance with your mortgage.

You can take either the standard deduction or itemize deductions on your taxes. If your allowable itemized deductions are greater than your standard deduction or you cannot use the standard deduction, you can itemize. However, it’s important to note that the new larger standard deduction means you may want to consider whether it makes sense to itemize.

In tax year 2023 (meaning taxes filed by April 2024), the standard deduction for married couples filing jointly is $27,700. For single taxpayers and married individuals filing separately, the standard deduction is $13,850. For heads of households, the standard deduction is $20,800.

•   You no longer have to make two payments. Instead of making both a mortgage payment and a student loan payment, you would make one payment. This can simplify your financial life and help you stay on top of your payments.


💡 Quick Tip: If you have student loans with variable rates, you may want to consider refinancing to lock in a fixed rate before rates rise. But if you’re willing to take a risk to potentially save on interest — and will be able to pay off your student loans quickly — you might consider a variable rate.

Cons of Cash-Out Refinance for Student Loans

It’s important to consider the downsides of cash-out refinancing for student loans as well.

•   You give up certain borrower protections. Refinancing a federal student loan via a cash-out refinance means you forfeit certain borrower protections that come with federal loans, such as income-based repayment plans, loan forgiveness, and other options through the Department of Education.

•   You turn unsecured debt into secured debt. Student loans don’t require any collateral. However, your mortgage does, which means that you turn what was once unsecured debt into secured debt. If you stop making your mortgage payments, you could lose your home to foreclosure.

•   You’ll pay closing fees. You’ll pay closing costs to refinance a mortgage, which can include title fees, appraisal fees, settlement fees, recording fees, land surveys, and transfer tax. The amount you’ll pay depends on your mortgage, the terms, and your state. They can be 3% to 5% of the loan’s value. You’ll want to consider whether these fees are worth what you’ll gain by refinancing.

When to Execute a Student Loan Cash-Out Refinance

It can be hard to decide when to refinance your student loans. This option may make sense for you if you:

•   Know you’ll save money in the long run: It’s important to fully understand how a student loan cash-out refinance works. If you’ve calculated your new loan amount and know you’ll save money after streamlining your debt, you could be a good candidate for a student loan cash-out refinance.

A new repayment term over a longer period may seem like a great deal because you’re lowering your monthly payments, but you’ll pay more in interest over your loan term. You may also pay more in interest due to the higher loan amount which might give you higher potential fees and expenses.

•   Have a plan to tackle your debt after refinancing: It’s important to be sure that you’ll be able to make your mortgage payments every month.

•   Want just one payment: Having just one loan with a longer repayment term means you simplify your debt. This way, you don’t have to keep track of multiple payments every month.

Finally, you may want to go through with a student loan cash-out refinance if you know for sure that you won’t need or be eligible for federal student loan repayment programs, forgiveness options, or other benefits, and have a plan to tackle debt. It’s a good idea to envision your top priorities — whether you want to save money, prefer just one payment, or would like to lower your monthly payments — or prefer all three benefits!

There are other reasons you may consider getting a cash-out refinance to pay off student loans, but this list gives you a jump start.

Refinancing Your Student Loans With SoFi

Considering cash-out refinancing or student-loan refinancing. SoFi offers both.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

How long does underwriting take for cash-out refinance?

Refinancing a mortgage typically takes 30 to 45 days but can take up to 90 days, depending on how quickly you provide information to your lender, the complexity of the loan, and your lender or broker. Often, the faster you provide documentation, the quicker your lender can underwrite and process your loan.

How do you get your money from a cash-out refinance?

Upon closing, you get a lump sum from your lender when you get a cash-out refinance. The loan proceeds pay off your existing mortgage(s), including closing costs and any prepaid items. You can do what you want with the remaining funds.

Do you pay closing costs on a cash-out refinance?

Yes, you’ll pay closing costs to refinance a mortgage. The amount you’ll pay depends on a variety of factors but is typically 3% to 5% of the loan amount. It’s a good idea to consider how long it’ll take you to recoup your closing costs after refinancing.

Photo credit: iStock/FatCamera

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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If you’re feeling as if your student loans are hard to manage, you’re not alone. Currently, more than 43 million Americans are grappling with student loan debt, and the amounts they carry aren’t small. The average amount of federal student debt per borrower is $37,338, and for those with private student loan debt, the number is $54,921.

That kind of steep debt can be a challenge to pay back. In October of 2023, as the pandemic-driven freeze on loan repayment expired, a whopping 40% of borrowers missed payments.

If your loans feel like a real challenge to repay and you’re stressed about your financial situation, take heart. Not only are you far from the only person out there with this issue, but there are also a variety of ways you can get help with student loan debt. Here, you’ll learn more about those resources and steps you can take. Remember, you can and will get through this challenging moment. Now, read on for some guidance.

Where to Start

If you’re finding it hard to manage your student debt, your best first step may be to contact your loan servicer. Both the federal government and many private lenders assign a student loan servicer to each borrower. You can think of these servicers as go-betweens who monitor accounts, keep track of payments, and help borrowers maintain their accounts in good standing and switch plans, if need be. You can find your federal student loan servicer by logging into your student aid account; if you have private student loans, ask your lender how to make billing inquiries.

Student loan servicers can help you understand your options if you are finding your current loan hard to pay off. But do educate yourself before calling your servicer, because they are loan professionals vs. advocates for borrowers. It’s possible that they may offer options that are not necessarily in your best interest.

However, there is likely considerable value in hearing what alternatives are available so you can begin getting help with your student loan debt. You’ll learn more about options below.


💡 Quick Tip: Ready to refinance your student loan? You could save thousands.

What to Do If You’re in Default

When you default on your student loans, it means you are not repaying them according to your schedule. Almost 10% of borrowers can find themselves in default within the first three years of repayment.

When you first miss a student loan payment, your loan is considered to be delinquent, or late. The exact definition of being in default will depend on the kind of loan you have. Here are some guidelines:

•   If you have federal student loans, you are considered to be in default when your payments are 270 days (or about nine months) late. With Perkins loans, you can be in default as soon as you don’t make a payment on its due date.

•   For private student loans, many lenders consider a loan to be in default at the 90 day or three-month mark. Policies do vary, so check your loan’s promissory note for details.

You can find out if you are in default by contacting your loan servicer. If you are indeed in default, the consequences can be serious. The full amount of the loan becomes due ASAP. The loan holder can take other funds from you, late fees and interest can accrue, and your credit score can be negatively impacted, among other impacts.

Yes, that sounds scary, but this is a situation to be worked through; don’t let it define you or make you feel panicky. You might research the Fresh Start program for federal loans in default, or look into a student loan settlement, which would allow you to pay back less than what you owe. Student loan rehabilitation is another path and can be a one-shot solution to get federal loans out of default, repay them at a reasonable rate, and help build your credit score.

If you have private loans that are in default, it can be a wise move to speak to someone who specializes in student loans at the National Association for Consumer Advocates. You may then get assistance finding out if you can get a student loan settlement (that is, pay less than the full amount you owe) or find another road forward.

Next, though, learn about ways to avoid reaching the default stage if you are having trouble with your student loan debt.

Ways to Lower Your Federal Student Loan Payment

If you’re struggling to make your monthly federal student loan payments, it may be worth taking a look at your loan repayment plan. Federal student loans have several different loan repayment plans available, which may offer different monthly payment amounts based on your discretionary income and other factors.

Choosing a federal loan repayment plan that could give you a lower monthly payment, if available, could help you more easily make your monthly student loan payments. Consider these options.

Recommended: What Student Loan Repayment Plan Should You Choose? Take the Quiz

Income-Driven Repayment

You may have been placed on the Standard Repayment Plan when you graduated, which is the standard for students repaying federal loans.

Under this plan, you have 10 years to pay off your student loans, and you make a fixed payment amount each month in order to ensure that your full loan is paid by the end of the 10 years. This plan may have higher monthly payments than other federal repayment plans.

In addition to the Standard Repayment plan, there are the following plans:

•   One option is the Graduated Repayment Plan. Under this plan, loan payments are made over a 10-year period. But unlike the Standard Repayment plan, loan payments start at a lower amount and are gradually increased every two years.

•   Another option when it comes to federal repayment plans is the Extended Repayment Plan. The Extended Repayment Plan has a longer repayment term option — up to 25 years. Monthly payments under this plan can be either fixed or graduated amounts. The extended repayment term means that you may have lower monthly payments.

Be aware, however, that choosing a longer repayment period could cost you more over the life of the loan due to interest that accrues every month that the loan is still outstanding. Think carefully about what might best suit your needs so you can pay off your student loan debt comfortably.

There are also four income-driven plans that calculate monthly payments based on a percentage of the borrower’s discretionary income. The percentage will vary based on the specific income-driven repayment plan you are enrolled in, but can be between 5% and 20%. Depending on the plan, repayment is extended over 20 or 25 years.

The plans available are:

•   The new SAVE Plan (Saving on a Valuable Education; it goes into full effect on July 1, 2024), which replaces the REPAYE plan

•   The PAYE Plan (Pay as You Earn)

•   The ICR Plan (Income-contingent Repayment)

•   The IBR Plan (Income-based Repayment)

With federal loans, you can change your repayment plan at any time. If you are interested in switching the plan you are enrolled in to better manage your debt, the Federal Student Aid website offers a repayment
calculator that could help give you an idea of what your monthly payments may be like under each of the different payment plans.

This could help you make an informed decision about which plan may work best for your personal situation, based on what you qualify for. You could also use an online Student Loan Payoff Calculator to get an idea of when your loan payoff date may be based on your interest rate and monthly payments. Yes, crunching numbers can take a bit of time, but these tools can make it simple, show you your alternatives for managing your debt, and provide some much-needed peace of mind.

Deferment and Forbearance

If you’re really in dire straits and can’t afford to make your normal monthly payments on your student loans at all, you may be able to put your federal student loans into deferment or forbearance.

These programs offer options to temporarily reduce your monthly payment amount or pause your monthly payments entirely for a limited period of time. Not all borrowers are eligible for deferment or forbearance — in order to qualify you need to meet certain eligibility requirements.

A few points to note:

•   If you’re interested in deferring your federal student loans to help with student loan debt, you’ll want to contact your student loan servicer. Your student loan servicer may require you to fill out paperwork or talk to an advisor before approving a deferral or forbearance of your student loans.

•   Student loan servicers may offer assistance with student loan debt management at no cost. They also may be able to explain how student loan deferral or forbearance will work in your specific circumstances.

•   It is also important to know that during deferment, depending on the type of loan borrowed, the borrower may still be responsible for paying interest that accrues.

•   If a loan is in student loan forbearance, the borrower will be responsible for paying accrued interest.

While deferring your student loans can be helpful when you’re undergoing a brief period of economic hardship, it may not be as helpful when it comes to managing loans long-term, since interest may continue to accrue and neither option changes your loan repayment terms. Keep reading to learn more options beyond deferment and forbearance.

Forgiveness Programs

One source of federal student loan debt help are loan forgiveness programs. These programs essentially forgive a remaining portion of federal student loan debt after you meet certain requirements. That means you don’t have to pay it; you may also hear this referred to as loan cancellation or discharge.

Here are specifics about student loan forgiveness:

•   One of the most well-known loan forgiveness programs is the Public Service Loan Forgiveness program. This program offers federal student loan forgiveness for some people working full-time in qualifying public interest fields for 10 or more years.

Public Service Loan Forgiveness, also known as “PSLF,” offers federal student loan forgiveness for certain public servants (teachers, government workers, and some health professionals) and non-profit employees who qualify after 120 on-time qualifying payments.

Unfortunately, PSLF isn’t available to everyone. To qualify for Public Service Loan Forgiveness, you must work for a qualifying employer. Generally, government organizations and certain non-profits will be considered qualifying employers for the purpose of PSLF, but to be sure that your job counts for the PSLF program, you can submit a PSLF employment certification form to verify your employer’s eligibility for the program.

•   If you have a disability, you may qualify for student loan forgiveness.

•   If your school closed or misled you, your loan(s) may be discharged.

•   If you have declared bankruptcy, your debt may be canceled.

💡 Quick Tip: If you have student loans with variable rates, you may want to consider refinancing to secure a fixed rate in case rates rise. But if you’re willing to take a risk to potentially save on interest — and will be able to pay off your student loans quickly — you might consider a variable rate.

Options for Private Student Loan Borrowers

What you’ve just read covers how to get help with federal student loans. But what if you have private student loans? (Private loans are also an option for refinancing federal loans, but if you do so, be aware that you forfeit federal protections, such as forbearance, and if you refinance for an extended term, you may pay more in interest over the life of the loan.)

If your private student loans are proving challenging to pay, here are some ways you might move forward:

•   You could see whether refinancing your private loans with a different private loan can secure a more affordable payment.

•   See if your employer offers an assistance program. Some will match repayments of student loans up to a certain amount.

•   Retool your budget. The debt avalanche or debt snowball method might help you reframe your income and spending to help you get on top of your student loans.

•   Seek credit counseling. Learn more about that below.

Credit Counseling

If you are feeling overwhelmed or are in a quandary about how to proceed with your student loan debt, consulting with a nonprofit credit counselor could be a good idea. You can gain the expertise and insights of someone who specializes in this terrain and hear ideas for how you might handle the situation. One well-regarded example of such an agency is the National Foundation for Credit Counseling, or NFCC.

Here’s how credit counseling can help when you’re in this stressful situation:

•   A counselor can review your student loan debt and finances and develop a plan which you then manage on your own.

•   Another option may be to have the counselor join you on a phone call with the issuer of your student loans to discuss options.

Having a trusted professional in your corner can be a key source of support when you face challenges with your student loan debt.

Avoid Student Loan Scams

Here’s a sad fact: Yes, there are scammers out there, looking to take advantage of people who have student loan debt. They typically offer deals to help you get out of debt but wind up cheating you. Getting involved with these people can make a difficult situation even worse, so be cautious.

The two main kinds of scams to know about are as follows:

•   Student loan consolidation scams: In this ploy, a company promises to consolidate your federal loans. They charge you an upfront fee (never pay upfront fees, by the way) and then don’t do anything on your behalf. If you want to consolidate your federal student loans, you can do so for free at StudentLoans.gov.

•   Student loan debt relief scams: Companies that advertise or contact you, saying they can reduce or eliminate your debt, may be part of a scam. Above, you’ve read about the available options for managing your debt. There are no magic solutions to making the amount you owe vanish, so don’t be fooled by these promises.

How to spot these scams:

•   As noted, promises of making debt disappear to help with student loans are likely bogus.

•   Those that give you an urgent deadline to apply in order to eliminate debt are probably also fraudulent.

•   Requesting an upfront fee to apply for relief via the Department of Education is a signal that you are dealing with a scammer.

•   A company that says they are affiliated with the Department of Education but isn’t listed at StudentLoans.gov is one to avoid.

•   A business that says they need your FSA ID could well be a scammer.

Recommended: Student Loan Help Center

Student Loan Refinancing

As mentioned briefly above, another option for help with student loans may be refinancing them. For some borrowers, refinancing student loans could help lower monthly payments. However, if you refinance federal loans with private ones, keep in mind that you’ll forfeit federal protections and may, with an extended term, pay more interest over the life of the loan.

When you refinance your loans, a new private lender pays off your current federal and private student loans and offers you a new loan. The goal is to secure a better interest rate or better repayment terms, which can help you take control of your student loan debt. It’s one of several options you have available to get through what can be a challenging moment in your life.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

A college degree can be a major rite of passage and career stepping stone for millions of Americans. Putting one’s education to work can unlock professional rewards and a solid financial future.

However, there’s no denying that the cost of tuition can be daunting. The student loan debt balance has surged 66% over the past decade and, according to the Federal Reserve, currently totals more than $1.77 trillion (that’s trillion, not billion).

Having those payments unfurling before you can be stressful and frustrating, and the effects of student loan debt can be far-reaching. It can seem as if some of your personal, professional, and financial goals will have to wait until you can pay off what you owe. But there are ways to manage those loans and navigate this situation. After all, student debt is what you are going through, not who you are.

Here, you’ll learn more about student loan debt, how it can impact borrowers’ life decisions, and ways to minimize those effects and manage debt more effectively.

Student Loan Debt Statistics

To understand how impactful student loan debt can be, here’s some perspective. Consumer debt in the United States is measured by the Federal Reserve in five distinct categories — home, auto, credit card, student, and other debt.

Using the Federal Reserve Bank of New York data from 2023, here’s how household debt stacks up in the U.S.:

•   Mortgage debt (excluding HELOCs, or home equity lines of credit): $12.14 trillion

•   Student loan debt: $1.599 trillion

•   Auto loan debt: $1.595 trillion

•   Credit card debt: $1.079 trillion

Here’s how educational debt stacks up more specifically: In 2023, the average student loan borrower carried $37,338 in federal debt and $54,921 in private debt.


💡 Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

Impact of Student Loan Debt on Life Plans

Given the cost of student loan debt, some borrowers may delay big life decisions, such as buying a home or starting a family until they are further along in their loan repayment or have their debt totally paid off. Here are some specifics about the potential negative effects of student loan debt. Then, more happily, you’ll find tips on managing what you owe.

Homebuying

One landmark study in the Journal of Labor Economics found that a $1,000 increase in student loan debt lowered the rate of homeownership by approximately 1.8% for people in their mid-twenties who went to a public college for four years. This is equivalent to a delay of about four months in achieving homeownership per $1,000 in debt.

Indeed, as student debt has increased, homeownership among younger Americans has decreased. Experts, however, caution that this is a complex situation and not a matter of student debt meaning you can’t buy a house.

It’s true that student loans can raise a person’s debt-to-income ratio (DTI), a critical measure of creditworthiness. And it can slow an individual’s ability to save for a down payment.

That said, there are ways to get a mortgage with a student loan. By managing debt responsibly and building your credit score, you can achieve this goal. It’s also wise to look into the various mortgages available with as little as 3% down or even 0% for qualifying candidates.

Pursuing Graduate School

If you have undergraduate student loan debt, you may decide to delay or forgo enrolling in a graduate or professional degree program. Graduate school can often mean even more debt. According to the Education Data Initiative, the average graduate student loan debt is $76,620 among federal borrowers, with only 14.3% of that coming from the borrower’s undergraduate studies.

That said, an advanced degree can mean increased job opportunities. For example, the starting salary for those who majored in computer and information sciences of a recent graduating class was $86,964 with a bachelor’s degree and $105,894 with a master’s degree. And if you want to go to medical school, law school, or business school (which can lead to fulfilling and lucrative careers), you will need significant additional training. So it’s important to determine if taking out the debt is worthwhile vs. your anticipated earning potential.

Recommended: Average Cost of Medical School

Employment and Career Choices

What you’ve just read indicates some of the ways that student loan debt can impact your career plans. There are a couple of other ways that your loan balance might impact your career:

•   If you have significant debt and are faced with the choice between your dream job at a lower salary and a basic job at a higher pay grade, you might opt for the one that fattens your bank account even though it doesn’t thrill you.

•   Also, some companies (particularly those in the financial industry) may check your credit score as part of your job application. Student loans could build your score if you pay on time, and they could broaden your credit mix. But loans also create the opportunity to make a late payment or miss one entirely. Those are aspects of your payment history, the single largest contributor to your score. If you don’t stick to your schedule and pay what you owe every month, you could wind up with a lower score.

Recommended: Average Student Loan Debt by State

Marriage and Divorce

Student loans can also impact one’s personal relationships. According to a 2023 Student Loan Planner® survey, one in four borrowers said they delayed their marriage plans due to student debt. In addition, more than half of respondents (57%) said their student loans were a source of considerable stress in their marriage or relationship.

Marriage can impact your student loan payments, depending on the types of loans you have and the repayment plan you are on. If you are on an income-based repayment plan, your monthly bill might change based on how much you and your spouse earn and how you file your taxes.

Marriages and money can create complex situations that are hard to fully decode. When looking at the impact of student loan debt on divorce, it can be tricky to unravel the interplay of factors. One survey conducted a few years ago found that 13% of respondents attribute student loan debt as a cause of their divorce. Yet some couples with student loan debt were more likely to delay divorce due to their student loans and how it might impact their ability to repay their debt. So in matters of the heart and the wallet, there isn’t a clear consensus.

Recommended: How Marriage Can Affect Your Student Loan Payments

Starting a Family

According to the USDA and other government statistics, it can cost more than $330,000 to raise a child to age 18. That’s no small amount, and it’s a daunting figure for many. Those carrying a hefty amount of student debt may delay parenthood as they pay off their loans.

One landmark New York Times survey in 2018 found that among people who didn’t plan to have children at all, 13% said it was as a result of student debt. In a more recent study of those with high student debt, 35% said they were waiting to have kids due to the impact of their loans on their finances. Still others may respond to this scenario by adopting strategies to pay off student loans faster.

Saving for Retirement

One of the negative effects of debt on young adults is that their retirement savings can be impacted. A recent study conducted by Fidelity found that 84% of borrowers felt that their loans impacted their ability to save for their retirement.

A study from a few years ago bore this out: Research by the Center for Retirement Research at Boston College found that Millennials who had never borrowed student loans saved twice as much for retirement by age 30 as college graduates who have student debt.

Here’s another bit of intel that supports the fact that student debt can make it harder to save for your future. Fidelity also found that the percentage of student loan borrowers who put at least 5% of their salary into their retirement plan rose from 63% to 72% during the Covid-19 loan payment pause.

Delaying retirement savings can mean playing catch up in your later years. Typically, the earlier you start saving for retirement, the more time your money will have to benefit from compound interest.

It can seem overwhelming to start saving for retirement while you’re still paying off student loan debt, but doing both at the same time can help you meet your financial goals in the future.


💡 Quick Tip: Refinancing could be a great choice for working graduates who have higher-interest graduate PLUS loans, Direct Unsubsidized Loans, and/or private loans.

How to Manage Your Student Loans

As you’ve just read, student loans can impact many areas of your life. But you are not alone in this situation, and your loans will not be with you forever. Focus on smart solutions to help you manage your debt repayment. Consider the following strategies.

Keep Paying

Even when money is tight, it’s wise to pay on time, as much as possible. Timely payments are the single biggest contributing factor to your credit score, an important financial metric. So do your best to keep current on those monthly installments.

Make a Budget

It’s hard to effectively manage your student debt and your finances in general if you don’t know how much money you have coming in and going out. If you don’t yet have a budget or yours isn’t working well for you, commit to reviewing different budgeting methods and finding one that works.

This process of tracking your money and possibly trimming your spending could reveal ways to free up more funds to pay off your debt.

Repayment Plans

There are federal student loan repayment plans that base your monthly payment on your income or ones that give you a fixed monthly payment. Those that are based on your income may help you lower your monthly payment.

It can be worthwhile to consider your options. For fixed payments, you may have a choice between standard, graduated, and extended plans. If you focus on income-driven repayment (IDR) plans, you will likely review the SAVE Plan (which replaces REPAYE), PAYE, IBR (income-based repayment), and ICR (income-contingent repayment) plans. With IDR plans, once you satisfy a certain number of months of qualifying payments, you can be eligible for forgiveness on the remaining balance of your loan(s).

Deferment and Forbearance

If you are finding it challenging to pay your federal student loans, you may be able to take advantage of deferment or forbearance, which are both ways of pausing or lowering your payments for a specific period of time. Perhaps you haven’t yet found a job after graduation or have another situation that is impacting your ability to pay; these programs can help qualifying borrowers out.

The main difference between is that during deferment, borrowers are not required to pay the interest that accrues if they have a qualifying loan. With forbearance, however, borrowers are always responsible for paying the interest that accrues, no matter what kind of federal loans they have.

Forgiveness

Here’s another path to lessening the impact of student loans on your life: forgiveness, which means you may not have to pay back some or all of your federal student loans. For these programs, there are a variety of qualifying factors, such as whether you’re a teacher, government employee, or worker at a nonprofit. Other factors could be that you have a disability, your school closed, or you declared bankruptcy, among others. It’s worthwhile to research your eligibility because the upside could be significant.

Recommended: A Look at the Public Service Loan Forgiveness Program

Refinancing

Another possible way to reduce the impact of student debt on your life is student loan refinancing.

When you refinance your loans you take out a new loan with a private lender. Depending on your credit history and financial profile, you can qualify for a lower interest rate, which could substantially lower the amount of money you pay in interest over the life of the loan (depending on the term you select, of course). Two important notes about this:

•   When you refinance federal loans with a private loan, you forfeit federal protections and benefits (such as the forbearance and forgiveness options mentioned above).

•   If you refinance for an extended term, even though your monthly payment may be lower, you may pay more in interest over the life of the loan.

To see how refinancing could help you manage your student loans, take a look at an online student loan refinance calculator.

The Takeaway

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.