Student loan refinancing is the process of changing the terms (e.g., interest rate, payment schedule) of an existing student loan agreement. This is accomplished by entering into a new student loan agreement that replaces your previous student loan agreement.

The criteria for refinancing your student loan are similar to other financial transactions, like getting a car loan, or a home mortgage, and typically include an evaluation of your annual income, credit score, and financial assets (e.g. savings).

The qualification requirements vary between different financial institutions. If you are not able to qualify, you may need to get a co-signer for your loan.

You should consider refinancing your student loan when (1) you can reduce your monthly payment because of lower interest rates, or (2) you can save the amount of interest you pay by shortening your loan duration.

The decision to refinance will depend on your individual circumstances. Be careful to look for unfavorable terms and origination fees or other charges.

The general rule of thumb is that the higher your credit score, the more likely you are to receive lower interest rates and better terms. Each financial institution has its own criteria and minimum requirements which may require a credit score of 660 or higher to qualify.

The main additional risk associated with student loan refinancing is when you refinance Federal loans and replace them with private loans. This could mean that you no longer have access to Federal programs such as income-driven repayment plans, deferments, or student loan forgiveness.