Refinancing is often about timing. Wait too long to refinance and you'll miss out on potential savings. Refinance too early and you may not qualify for the best rate and terms.

To make the best decision, you'll need to do a cost-benefit analysis based on your current financial situation. We'll walk you through how to do just that below.

Should I Refinance My Student Loans?

When deciding whether you should refinance your student loans, there are several factors to consider. Here are the main benefits and drawbacks of refinancing.

Pros

Refinancing your student loans can lead to a lower monthly payment, less interest paid over the life of the loan or, in many cases, both.

Let’s say you owe $40,000 with a 9% interest rate and a 10-year term. If you refinance to a 4.5% interest rate and a 10-year term, you’ll save $11,058 in total interest. Your monthly payment will also be $92 less each month. You can use that difference to pay off other loans, save for a down payment or invest for retirement. 

There are no downsides to refinancing private student loans. If you have private loans with a high interest rate, you can apply to refinance and see how much you can save. 

Because refinancing student loans doesn’t come with extra application or origination costs, there’s no harm in refinancing as often as possible to save on interest. Some borrowers refinance as often as every year to minimize their total interest. 

Cons

If you have federal student loans, refinancing will convert them into private student loans. 

Refinancing your federal loans will strip away benefits such as loan forgiveness programs, income-driven repayment plans, and long deferment and forbearance periods.

Refinancing is a permanent choice and cannot be reversed if you change your mind. Before you refinance federal loans, double-check to make sure you're not eligible for any loan forgiveness options. The federal government recently expanded some loan forgiveness programs to include borrowers who were not eligible before.

If you refinance to a longer term than the one you currently have, you may end up paying more interest over the life of the loan. Before refinancing, do the math and make sure that you’re not paying more interest. 

Refinance with Juno

Juno works with three different lenders that let you refinance both private and federal student loans. Parents may even be able to refinance their federal Parent PLUS Loans into their child’s name in order to cede financial responsibility for the loan. 

All Juno lenders allow you to see your interest rates without a hard inquiry on your credit report. This way, you can view your potential interest rate and decide your next steps without harming your credit.

Juno offers both fixed-rate and variable-rate loans. A fixed-rate loan will have the same interest rate for the entire loan term, while the rate on a variable-rate loan will increase or decrease depending on the overall market rates. Borrowers who plan to pay off their loan quickly may save more with a variable-rate loan, but they should be aware that their payments could drastically change every month.

Here’s how the three Juno partners compare.

Earnest

As of Nov. 2, 2021, fixed interest rates start at 2.44% APR and variable interest rates start at 1.88% APR when you refinance with Earnest. Borrowers who refinance with Earnest through Juno will get an interest rate that is 0.25% lower than if they refinanced with Earnest separately.

Earnest does not allow co-signers. If you need a co-signer to qualify for a student loan refinance, you’ll have to use one of the other two Juno-affiliated lenders. 

Splash

Splash is a lending marketplace that connects borrowers with several different lenders. When you complete an application with Splash through Juno, you’ll likely receive offers from multiple lenders so you can find the best deal.  

As of Nov. 2, 2021, fixed interest rates start at 2.44% APR and variable interest rates start at 1.88% APR. Splash allows borrowers to use a co-signer.

If you refinance between $50,000 and $150,000 with Splash through Juno, you’ll get a $500 bonus. If you refinance more than $150,000, you’ll get a $1,000 bonus. This bonus is available only if you refinance with Splash through Juno.

If you’re a parent with a federal Parent PLUS Loan, Splash will let you refinance the loan in your child’s name. To qualify for this deal, your child must have a credit score of 700 or more, a debt-to-income ratio of 40% or less, a bachelor’s degree and a salary of at least $42,000. If the borrower has a co-signer on the loan, the minimum income requirement is only $25,000. 

Laurel Road 

Laurel Road offers student loan refinancing for medical professionals, including physician assistants, nurses, dentists, optometrists and physicians. As of Nov. 2, 2021, fixed interest rates start at 2.50% APR and variable interest rates start at 1.89% APR. 

Doctors will have to make only $100 monthly payments on their medical school loans while in residency or fellowship. Because physicians earn low salaries during this time, those $100 monthly payments could make it easier to manage cash flow.

Borrowers who refinance with Laurel Road through Juno will get an interest rate that is 0.25% less than if they refinanced with Laurel Road separately. Laurel Road does allow borrowers to use a co-signer.