A Student Loan Refinancing Q&A

Learn when to refinance student loans, if there is a downside to refinancing, if it costs money to refinance, and if refinancing can hurt your credit score.
Man using computer to learn about student loan refinancing

When speaking to student loan borrowers in our webinar programming or via email or phone, we receive numerous questions related to refinancing. While refinancing your student loans can provide substantial benefits, it's not for everyone, and it's important to weigh the facts before making a decision. We've highlighted some general questions below that have popped up in recent months about the topic and provided our answers.  

Q: When should I refinance my student loans?

A: It's best to refinance when your credit score is high/strong enough to get a lower interest rate on your loans. When you refinance, getting a lower interest rate can mean lower monthly payments and more money in your pocket each month. Many lenders, including MEFA, allow you to get your preliminary rate by providing a few pieces of information and without hurting your credit score. This can help you determine if refinancing is best for you.

Q: Is there a downside to refinancing student loans?

A: Refinancing can lengthen the amount of time it takes to pay off your loans completely, even if it does reduce your monthly payments. It can also result in paying off a larger amount for your loans in total. Before you refinance, check with your refinancing lender to see if there is any penalty to paying off your refinanced loan early, in case you decide you'd like to do so. Also, keep in mind that if you refinance federal loans, you will lose any benefits associated with those loans.

Q: Does it cost money to refinance my student loans?

In most cases, there are no fees associated with refinancing your student loans. However, prepayment penalties may occur for zeroing your balance before the end of your loan term. Late payment fees for submitting your payment past the deadline are another possible "extra" cost for refinancing as well as collections fees for defaulted loans if you have missed payments.

Q: Does refinancing student loans hurt your credit score?

A: Refinancing your student loans doesn't typically cause a great deal of damage to your credit, though you should know that there is a hard credit hit for each final application.

We hope this provides some helpful information in regards to refinancing your student loans. MEFA does offer a refinanced student loan, which you can learn about here. If you have any additional questions about refinancing, do not hesitate to reach out to our College Planning Team at or (800) 449-MEFA (6332).

Learn about MEFA REFI