One of the key differences between federal and private student loans is the ability to control your interest rate through refinancing. Federal loans lock in at a particular rate when they’re issued, and even consolidation usually has only a modest effect on the interest rate. Most private loans (excepting those with a “variable rate”) have a fixed rate that’s determined when the loan is issued, but you can also refinance those loans to take advantage when lower rates become available. While you can refinance federal loans, borrowers should think long and hard on it before doing so. It’s a one-way street: you can take your federal loans private, but once they’re private, they’ll never be federal loans again or qualify for things like emergency forbearances, Public Service Loan Forgiveness, Income-Driven Repayment, and more. If you’ve already got private student loans, or you would benefit from taking your federal loans private, you can essentially trade your old ones in for new ones, hopefully with better terms.
There are two primary factors to consider for private student loans, and they’re the same as most every type of loan: term of repayment and interest rate. If you only have 18 months left on your loan, you probably don’t want to refinance it into a 10-year loan, but sometimes you can get a term as short as 5 years. In most cases, borrowers refinance to take advantage of a lower interest rate, which lowers their monthly payment amount and, ultimately, how much they’ll pay over the life of their loan. Also, most private student loan lenders do not charge origination fees, so you don’t have to worry about any up-front costs eating into your potential savings. When looking to refinance, it’s important to keep a close eye on rates as they can change quickly and dramatically.
For example, if you have a $100k private loans with a 10 year fixed-rate loan at 10.37% (the lowest average rate recorded by student loan marketplace Credible on March 30, 2026):
Your monthly payment would be $1,342.08/month
The total interest you would pay over the life of the loan would be: $61,049.74
The total amount your loan would cost you would be: $161,049.74
By contrast, if you had the same loan, but with 3.99%, gotten just six months later (the lowest average rate recorded on October 1, 2026):
Your monthly payment would be $1,011.98/month
The total interest you would pay over the life of the loan would be: $21,437.14
The total amount your loan would cost you would be: $121,437.14
By waiting just three months to refinance, your monthly payments would be $300 less, and you would have saved almost $40k! If you’re considering refinancing your student loans, give us a call. We’ve helped many physicians through the refinancing process and can make sure you’re getting the best deal for your situation. We’re here to help you save money and worry less, wherever your student loan journey takes you!
.png)
