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Refinance a student loan

Want better interest rates on your student loan? Consider refinancing your debt into one easy and affordable payment.

Ready to refinance? Compare personal loans
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If you’re drowning in student debt, you might benefit refinancing your student loans. This means taking out a new loan at a lower interest rate to pay off your existing debts. Getting lower interest rates on your student loans can be tricky business depending on how much you owe and what type of loans you need to pay back. This guide is designed to give you the information you need to make an informed decision, so that you can save money and repay your loans in as little time as possible.

How do you refinance a student loan?

Student loan refinancing works just like any other type of refinancing. You take out a new, private loan with lower interest rates or more favourable terms to wipe out your current debt. Then, you can begin making repayments on your new loan with a clean slate.

Your ability to get a better deal on your new loan will depend on your creditworthiness and financial history. Factors that lenders will typically consider when processing your eligibility for a new loan include your credit score, income, job history and educational background.

This information will typically dictate how much you’ll be required to pay in interest when you refinance.

Types of student loans in Canada

Refinancing vs. consolidating your student loan

Before we delve into the specifics of student loans, it might help to clear up any confusion around the difference between refinancing and consolidating your student debts.

  • Student loan refinancing. Refinancing deals with paying off a loan with a new loan to get a lower interest rate or better terms.
  • Student loan debt consolidation. Debt consolidation involves combining multiple loan types into one affordable and easy-to-manage payment, in addition to refinancing for better terms.

While these terms are often used interchangeably, they represent slightly different loan repayment strategies. Most refinancing loans can also be used for the purpose of consolidation. To simplify this post, we’ll use the term ‘refinancing’ to encompass both strategies.

Loan types for refinancing student debt

There are several types of loans you may be able to qualify for as a recent graduate. Take some time to figure out which type best suits your needs.

  • Secured loans. If you own any assets (like a house or vehicle) you should be able to take out a secured loan. These loans often offer the lowest rates and better terms but they also come with the risk of losing your asset if you can’t make your repayments on time.
  • Unsecured loans. These loans don’t require you to put up any kind of collateral. Lenders rely on your credit score to see if you’re eligible, so it’s important to have a good credit score and financial history (which you’ll be much more likely to have if you pay back your debts and credit cards on time).
  • Bad credit loans. If your credit history needs work, you may be able to qualify for a bad credit loan to refinance your debts. These loans typically come with higher interest rates, so be careful about taking them out to refinance your student loans.
  • Guarantor loans. If you want low interest rates but you don’t have a good enough credit history, then you might be able to ask family or friends to cosign your loan. This should bring your interest rates down and you may even be able to qualify for a larger amounts.

What to look for when choosing a refinancing loan

  • Interest rates. Look at which lender offers the best rates and determine whether a fixed rate or variable rate would work best for your budget.
  • Fees. Read the fine print and contact the customer service team if you have any questions regarding extra fees.
  • Loan amount. Figure out how much you can borrow with a private loan as some lenders may have caps on how much they’re willing to lend for debt refinancing.
  • Term length. Aim for a shorter term to get lower interest rates but make sure that you can still meet your minimum monthly payments.
  • Cosigner options. Look for a lender that will let you refinance with a cosigner if you can’t meet the qualifications needed to get the best rates on your own.
  • Customer service. Check out online reviews and contact private lenders directly to get a feel for how they treat their borrowers.
  • Other perks. Find out if you can qualify for additional perks like loan insurance and unemployment protection.

Fixed vs variable interest rates

If you want to refinance your loan, you’ll need to choose between a fixed or variable interest rate.

  • Fixed interest rates. Fixed rates stay the same for the whole term of your loan, which makes it easier to budget for repayments. This means that your rates won’t change or go up unexpectedly.
  • Variable interest rates. Variable rates are tied to prime rates, and will fluctuate depending on what the market is doing. While they typically start lower, they can often rise to the same level as your highest fixed interest rate.

How much could I save by refinancing my student loan?

The answer to this question will depend on a few factors including the interest rate and loan term that you’re offered, as well as your current interest rate and term. As an example, let’s take a look at how much Kendall, a recent graduate from university, could stand to save by refinancing her $40,000 student loan with a lower interest rate and a shorter loan term.

Current loan

Balance: $40,000
Interest rate: 6%
Remaining loan term: 15 years

New loan

New interest rate: 3.99%
New loan term: 10 years

Original loanNew loanMary’s savings
Total interest$20,758.00$8,575.00$12,183.00
Monthly payment$338.00$405-$67
Interest rate6%3.99%2.01%
Term15 years10 years5 years

Mary would save over $12,000 over the course of her loan, but she would have to pay $67 more each month. Additionally, she would be able to pay off her loan five years faster.

Compare personal loans to refinance your student loan

Compare loan offers from reputable online lenders below. Before applying for a personal loan, contact the lender to see if they allow you to refinance the specific type of student loan that you have (federal, provincial and/or private).

1 - 8 of 8
Name Product Ratings APR Range Loan Amount Loan Term Broker Compliance Requirements
Spring Financial Personal Loan
Finder Score:
Customer Survey:
10.8% - 46.99%
$500 - $35,000
6 - 60 months
Requirements: min. income $1,800/month, 3+ months employed, min. credit score 500
Loans Canada Personal Loan
Finder Score:
Customer Survey:
6.99% - 46.96%
$300 - $50,000
3 - 60 months
Loans Canada is a loan search platform with access to multiple lenders. Applicants will be matched with a suitable lender based on credit history and borrowing requirements.
Requirements: min. credit score 300
LoanConnect Personal Loan
Finder Score:
Customer Survey:
8.99% - 46.96%
$500 - $50,000
3 - 120 months
LoanConnect is a loan search platform with access to multiple lenders. Applicants will be matched with a suitable lender based on credit history and borrowing requirements.
Requirements: min. credit score 300
easyfinancial Personal Loan
Finder Score:
Customer Survey:
9.99% - 46.96%
$500 - $100,000
9 - 120 months
Requirements: min. income $1,200/month
AimFinance Personal Loan
Finder Score:
$1,000 - $5,000
9 - 24 months
Requirements: min. credit score 580
Mogo Personal Loan
Finder Score:
Customer Survey:
9.90% - 46.96%
$500 - $35,000
6 - 60 months
Requirements: min. income $35,000/year, min. credit score 600
SkyCap Financial Personal Loan
Finder Score:
Customer Survey:
12.99% - 39.99%
$500 - $10,000
9 - 36 months
Requirements: min. income $1,666.67/month, full time employment/pension, min. credit score 575, no bankruptcy
goPeer Personal Loan
Finder Score:
8.99% - 34.99%
$1,000 - $35,000
36 - 60 months
Requirements: recommended income $35,000/year, no payday loan debt, min. credit score 600, min. 5-year credit history. (Avg. approved rate of 15.80%)

When should I refinance my student loans?

Whether or not you should refinance your student loans depends on a number of factors. You might like to consider refinancing (or not refinancing) your student loans in the following scenarios.

It’s a good idea to consider refinancing if:

  • You have good credit. You can usually get lower interest rates on private loans if your credit score is over 650. Apply to get your credit score with credit bureaus like Equifax and TransUnion.
  • Your income exceeds the amount you owe. You’ll typically get better rates if you have a low debt-to-income ratio because it shows that you have enough income to make repayments.
  • You don’t have government-issued student loans. If you funded your post-secondary education through private loans, it’s often easier to negotiate better rates.
  • You have a job and a steady source of income. You’re more likely to be approved for better terms if you can show that you have a steady stream of money coming in to meet your minimum payments.

You might want to hold off on refinancing if:

  • You have bad credit. If your credit score falls below 650, you might have trouble securing a loan with better rates and terms. It will likely make more sense for you to make minimum payments on your current loan until you’re in a better financial position.
  • You owe more than you make. If you’re carrying a high debt load, most lenders will charge higher interest rates on your loan to make up for the risk they take on by financing you.
  • You have government issued loans. The majority of government-issued loans come with the best rates and terms on the market. You might be hard-pressed to find a private lender willing to match or exceed your current terms.
  • You’re unemployed or new to the workforce. Most providers are unlikely to negotiate better terms or give you low interest rates on a new loan if you can’t show adequate proof of a steady, long-term income.

Pros and cons of refinancing your loans

Before you consider refinancing your loan, be sure to weigh the pros and cons carefully.


  • Lower interest rates. You may be able to negotiate lower interest rates on your loan if you refinance it through a private lender.
  • Longer terms. With the right refinancing loan, you may find it easier to extend your terms for repayment and secure lower minimum monthly payments.
  • Easy payments. Refinancing loans can be used to consolidate several loans into one easy and affordable payment to help you better manage your debt load.
  • Improved credit rating. If you have a negative credit report, refinancing can help you get back on track and repair your bad credit.


  • Higher interest rates. Depending on your financial history, the interest charged on a private loan may be higher than what you’re currently paying.
  • No repayment assistance. You won’t be able to qualify for repayment assistance or reduced payments if you earn a low income when you refinance your government loan with a private loan.
  • No tax-deductible interest. Unlike government loans, you can’t deduct the interest you pay on private student loans off your taxes.

How to apply for student loan refinancing

Applying for student loan refinancing is usually less complicated than applying for a student loan. Before applying, you’ll need to make sure you meet the eligibility requirements for the loan.

Bottom line

If you have student debt, you may want to look into student loan refinancing to see if it will be beneficial for you. Even if you have a government subsidized loan, you can still refinance it with a lender that offers a more competitive exchange rate and better repayment terms. If you do decide to refinance your loan, make sure you compare all of your options and do your research before deciding on a provider.

Frequently asked questions

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