You can refinance student loans without a degree, but it may not be easy. That’s because lenders commonly require student loan refinance borrowers to graduate.
While you may get student loan refinancing offers that don’t require a degree, the terms might not beat what you have now, especially if you have federal student loans. Here is how to get the best deal if you’re trying to refinance student loans without a college degree, plus alternatives to refinancing.
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Earnest is an online lender offering private student loans to college and graduate students, as well as student loan refinancing. The company was founded in 2013. Borrowers can choose their own loan terms to fund up to the full cost of their education.
Citizens Bank was founded in the late 1800s in Rhode Island. Today, it’s one of the largest commercial banks in the U.S. Branches are concentrated in the New England, mid-Atlantic and Midwest regions.
PNC offers student loans in all 50 states for students at all stages of postsecondary education, including professional training loans and refinancing. The bank is also engaged in a number of community efforts, including financial literacy programs and PNC Grow Up Great, which supports early childhood education. For eligible undergraduate students, PNC offers opportunities to win $2,000 scholarships toward education expenses.
Credible is a loan comparison marketplace that allows would-be borrowers to shop around for student loans and student loan refinancing that meet their needs. The company was founded in 2012 in San Francisco as a tool to empower borrowers to shop rates and products.
Sparrow, founded in 2020, is an online marketplace where students and parents can fill out a single application to see whether they qualify for loan offers from a variety of lenders. Although Sparrow is not a lender, the free service allows you to compare rates across lending partners. Sparrow is also available to international students.
NaviRefi, established in 2018, offers student loan refinancing to borrowers looking for better interest rates or simplified payments. The loans are made by the online lender Earnest, which is part of student loan servicer Navient in Wilmington, Delaware. Borrowers must meet the lender’s eligibility criteria and receive an invitation to apply.
Note: After years of legal battles, Navient agreed in January 2022 to cancel $1.7 billion in student loan debt owed by more than 66,000 borrowers. Navient has not admitted to any wrongdoing under the settlement.
Best for fixed APR
The Rhode Island Student Loan Authority is a nonprofit quasi-state authority that provides college financing to students and parents. Its loans are available to students across the country.
Best for no fees
Discover Bank has been operating for more than 100 years, and since 2010, it has offered private student loans to students attending more than 2,400 colleges and universities. Loans of up to 100% of education costs with fixed or variable rates are available.
Find the Best Student Loan Refinance Lenders
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When you refinance a student loan, you combine some or all of your student loans into a new loan, giving you one payment and ideally a lower interest rate, a lower monthly payment or both.
You can refinance private student loans through private lenders and roll up federal student loans into a federal direct consolidation loan. Refinancing federal student loans into a private student loan is also possible, but it generally isn’t a good idea because you’ll give up the benefits and protections that come with federal loans.
Yes, you can refinance your student loans without a degree.
Some, but not all, private lenders will refinance student loans for borrowers who haven’t graduated, though you shouldn’t expect the best terms, says Robert Farrington, student loan expert and founder of The College Investor personal finance blog.
Generally, private lenders may want to see that you’ve had 12 months of on-time payments after leaving school or may require a co-signer. They will also assess your income, credit history, debt obligations and other factors, such as degree completion, to determine whether you are a good credit risk.
Qualifications to refinance with a private lender when you didn’t graduate are:
- A good credit score of about 650.
- Proof of employment and stable income. Some lenders have minimum annual income requirements.
- A maximum debt-to-income ratio of 43%, but lower is always better.
Requirements to consolidate federal student loans are not credit-based, and most types of federal student loans are eligible.
Accepting a loan offer without researching it is one of the biggest mistakes borrowers make when refinancing student loans, says Jan Miller, president of Miller Student Loan Consulting. But how do you know a good student loan refinance offer when you see one?
- Monthly payment: “Be certain that you’re stable enough financially that you can afford this payment through the rest of the term,” Miller says.
- Interest rate: Look for the loan that will cost you the least in interest over time, but try not to be driven solely by interest rate, Miller cautions. A lower interest rate doesn’t necessarily mean a lower monthly payment, he says.
- Consumer protections: Ask about the safety nets that come with your new loan, including options for deferment, forbearance and discharge.
Once you’ve compared offers, choose the loan that works best for you. But don’t stop there: Be ready to refinance again soon because private student loan terms change often and a better deal may become available.
- Lower interest rates. By refinancing your student loans, you may qualify for a lower interest rate.
- Pay the debt off faster. You’ll have the option to adjust how long you want your repayment term to be.
- Decrease your monthly payment. You could decide to extend your loan term, which would decrease the amount you need to pay monthly.
- Simplify your loans. If your student loans came from multiple lenders, they will combine into one loan under one lender that has one monthly payment after refinancing.
- New loan servicer. You’ll have the chance to choose a new loan servicer – which is great if you aren’t happy with your current one.
- Chance to release a co-signer. If you previously had a co-signer, you will have the chance to release him or her from future liability when you refinance your student loans.
- No income-based repayment plans. When you refinance your federal student loans into a private loan, you lose the chance of choosing an income-driven repayment plan.
- No federal repayment protections. Along with losing access to income-based repayment plans, you’ll also lose out on protections such as forbearance and deferment.
- No grace period. You will no longer have a six-month grace period for your student loans.
- Possibly higher interest rates. Interest rates can go up if you choose a variable rate, rather than a fixed rate.
- A co-signer may be required. If you don’t qualify for refinancing, you may need to find a co-signer on your refinanced loan.
Refinancing your student loans if you didn’t graduate isn’t always the best choice. Once you research loan offers, you may find that a student loan refinance doesn’t add up in your favor.
These are some other options:
- Modify your federal student loans. Retain the protections of federal student loans, but change your payment terms. You could switch to an income-driven repayment plan or extend your terms from 10 years to 25 years.
- Ask your lender for flexibility. Your lender may be able to offer temporary assistance, such as forbearance, a lower interest rate, interest-only payments or other flexible terms, especially if you can demonstrate a hardship.
- Apply for forgiveness or discharge programs. You may be eligible for a closed school discharge or Public Service Loan Forgiveness, which doesn’t require a degree.
- Use employer-sponsored student loan repayment benefits. Generally, you can take advantage of these whether or not you graduated, Farrington says.
- Pay off the highest-rate loan first. Pursue forbearance or other assistance, Miller says, to lower your federal student loan payments and devote more of your budget to paying down higher-rate private loans.
- Think about going back to school. If you enroll at least half-time, you can put your loans in deferment and complete your degree to increase your earnings.
- Consult an expert. Assistance from a student loan consultant can help you understand your options.
U.S. News selects the Best Loan Companies by evaluating affordability, borrower eligibility criteria and customer service. Those with the highest overall scores are considered the best lenders.
To calculate each score, we use data about the lender and its loan offerings, giving greater weight to factors that matter most to borrowers. For student loan refinance companies, we consider each company’s customer service ratings, refinancing fixed APR, refinancing variable APR, refinancing minimum and maximum loan terms, refinancing maximum loan amounts, refinancing minimum FICO score, product availability, and online features.
The weight each scoring factor receives is based on a nationwide survey on what borrowers look for in a lender.
To receive a rating, lenders must offer qualifying loans nationwide and have a good reputation within the industry. Read more about our methodology.
To recap, here are the picks:
8 Lenders for Refinancing Student Loans for Borrowers With No Degree
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