How Long Does Refinancing Student Loans Take?

Q: How long does it take to refinance your loans?

Refinancing your student loans can take anywhere from two weeks to two months, depending on the lender and whether you submitted appropriate documentation. The application itself may take only 15 minutes, but the lender must review the application, process the paperwork, approve it, and send funds to your loan servicer.

Q: What are the requirements to refinance a student loan?

Every student loan refinancing lender has its own eligibility requirements to qualify for a refinancing loan. In general, lenders review credit score and credit history, debt-to-income ratio, current income, employment history, and degree status. You can check the lender’s website to see if they have listed any requirements you should be aware of.

Q: How does refinancing student loans affect my credit score?

When you submit an application for refinancing, the lender will review your credit history. As part of this, there’ll be a hard inquiry on your credit report. Typically, a hard inquiry results in a slightly lower credit score. However, if you make payments on the new refinancing loan on time, your credit may bounce back.

How Long It Takes to Refinance Student Loans

Melanie LockertUpdated November 20, 2022

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

The amount of time it takes to refinance your student loans depends on the lender and other factors, but it generally takes a couple of weeks. If the refinancing lender needs additional documentation, it may delay the process and you may wait between one and two months. Student loan refinancing can help student loan borrowers qualify for a lower interest rate, which can ultimately mean paying less in interest. Read on to learn more about how to pay off student loans, how to figure out who to pick for refinancing your loans, and how long that process takes.

What Is the Student Loan Refinance Process?

If you’d like to change your interest rate and work with a new loan servicer, student loan refinancing is a way to do that. The perks of refinancing your student loans include shaving off interest points from your rate and working with a new company to tackle what you owe. When you refinance, you are replacing your existing federal loans with the terms and conditions of a private loan agreement. There are some advantages and disadvantages of refinancing a student loan.One of the big disadvantages of refinancing federal student loans with a private lender is you’ll be forfeiting federal benefits, including access to Public Service Loan Forgiveness and student loan deferment, for the amount of your loan that you refinance. If you feel you’re a good candidate for student loan refinancing, bear in mind that this is not something you want to jump into without research, consideration, and getting your financial info in order. To help prepare, here are steps to take in the student loan refinance process. Recommended: How Much Do I Owe in Student Loans?

Step 1: Check Your Credit Score

Private lenders who offer refinance deals for student loans impose specific underwriting criteria to make sure you’re a good candidate.One measure private refinancing lenders look at is your credit score. This number offers lenders a snapshot of your credit history. Your credit report holds the information that makes up your credit score.

Step 2: Shop Around for Refinancing Lenders

As a consumer, it makes sense to shop around and discover all of your options before deciding on one option. If you review at least three options, you can compare offerings, interest rates, appealing perks, repayment terms, and repayment options. You pick your private loan servicer. This is a major difference from your federal loan servicer, who is assigned to you. Because you may be giving up important benefits like loan forgiveness, you will want to work with a reputable company that can support you on your repayment journey. You can network with friends, look up online reviews, read the “frequently asked questions” on the loan servers’ websites, and absorb what people are saying on social media. The company you select for student loan refinancing should feel like a good fit for your needs and financial situation.

Step 3: Select a Loan Offer

After doing a deep dive into your student loan refinancing lending options, double-checking eligibility requirements, and reviewing potential rates, you can select a loan offer. To understand the loan offer, look at:

Repayment options offered by the lender
Repayment terms, which are typically 5, 7, 10, 15, or 20 years
Monthly payment, which is directly related to the length of the repayment term
Annual Percentage Rate (APR), which includes any upfront charges and fees the lender may add to the loan principal
Fixed-rate vs. variable rate interest
Potential fees

Even though student loan refinancing may help lower your loan’s interest rate or reduce the size of your monthly payment, it’s a loan that must be paid back. It’s essential that borrowers understand how the new loan terms will impact their finances.

Step 4: Apply for a Student Loan Refinancing Loan

After selecting a loan offer, it’s time to apply. Each student loan refinancing lender may have a different process. In general, the application process shouldn’t take more than 15 to 20 minutes.To make the student loan refinance process easier, collect some facts, numbers, and documents ahead of time, including:

Loan servicer information
Government-issued I.D.
Proof of income, such as pay stubs and tax return
Student loan account number(s)
Loan balance
Your degree, as proof of completing your education. (Note: You can refinance while still in school with some lenders, but it may not be a good move just yet.)

Having this information available can streamline the student loan refinancing application process.

Step 5: Sign and Refinance

If the application for your refinancing loan is approved, you’ll need to sign the Promissory Note. Promissory notes are legally binding contracts that state the terms of a loan, such as the amount to be repaid, the interest rate that will be charged, and any other important terms and conditions of that particular loan. Once you sign, the refinancing process will begin. Note: Set up an online account with your new lender, but be sure not to miss your monthly payments with your former loan servicer until the refinancing process is complete.

How Long Does It Take to Apply for Student Loan Refinancing?

How long does it take to refinance student loans, exactly? The first part, which is filling out the application, usually takes 15 to 20 minutes. Every refinancing lender may have different processes and requirements, but generally, this part shouldn’t take up too much of your time. Having your loan information and financial documentation ahead of time can help you get through it faster.

How Long Does It Take for a Lender to Process an Application?

How long it takes a student loan refinancing lender to process your application can vary by lender, but in general, it may take a few days. The process may take longer if the lender needs additional documentation. For example, if a tax return or pay stub isn’t legible, is incomplete, or is missing altogether, you may be informed that you need to get them to the lender.If you’re applying with a cosigner, the time to refinance student loans may take a week and a half.

Total Time to Refinance Student Loans

All in all, how long does student loan refinancing take? The whole process may take two weeks to two months. Consider that it may take 30 to 60 minutes to research refinancing lenders. Then another 15 minutes to apply for student loan refinancing. After that, it could take 1 to 10 days to hear back about your application. If you have questions, that could lengthen the processing time. After all is approved, your refinance lender will send the funds to pay off your loans with your former loan servicer. Then, you start repayment with your new student loan lender. If there are no hiccups along the way, it may just take a couple of weeks to get the process finalized. If there are bumps in the road, there may be delays that could take 1 to 2 months.

The Takeaway

How long does it take to refinance student loans? It depends on a number of factors, such as if you’re applying with a cosigner or if you have all your supporting documentation ready. Typically, the process lasts just a few weeks, making it relatively quick and painless. That way you can work with your new lender and pay back your loan on your terms.

3 Student Loan Refi Tips

Once the pandemic-related pause on federal student loan payments ends, going back to making payments may be hard on budgets. One solution is to refinance to a lower interest rate, longer loan term, or both, depending on your situation. (The tradeoff is that you’ll be forfeiting federal benefits such as repayment programs.) Find and compare your student loan refinance options.
Paying extra each month on your student loan can reduce the interest you pay and so lower your total loan cost over time. (The law prohibits prepayment penalties on federal or private student loans.)
Depending on their income, qualified borrowers can deduct the interest they pay for student loans, both federal or private, up to $2,500 per year. The deduction phases out for modified adjusted gross incomes of $70,000 to $85,000 for single individuals and $145,000 to $175,000 for people married and filing jointly.

Frequently Asked Questions

How long does it take to refinance your loans?

What are the requirements to refinance a student loan?

How does refinancing student loans affect my credit score?

Photo credit: iStock/SrdjanPav

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About the Author

Melanie Lockert

Melanie Lockert is the founder of the blog and author of the book, Dear Debt. Through her blog, she chronicled her journey out of $81,000 in student loan debt. Her work has appeared on Business Insider, VICE, Allure, and more.

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