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What is a good debt-to-income ratio for student loan refinancing?

It depends on the lender — but the lower, the better.

Updated

How much money you have free to spend each month is a key factor in whether you can qualify for student loan refinancing. Many lenders measure this with your debt-to-income (DTI) ratio. Even if your lender doesn’t necessarily look at your DTI, having a low ratio can set you up for more competitive rates and terms.

What DTI do I need to refinance a student loan?

Generally, you need a DTI of around 40% or less to qualify for student loan refinancing, though it can vary by lender. This means your monthly bills and debt repayments must be no more than 40% of your monthly income before taxes.

What’s a good DTI for refinancing?

For the purpose of student loan refinancing, a good DTI is around 20% or less. You likely wont’ be able to qualify for the most competitive deals if your DTI is above that.

DTI requirements from 3 providers

Here’s the maximum DTI three student loan refinancing providers require or recommend when you apply for a loan:

  • Purefy: 40% or less recommended
  • Figure: 65% or less recommended
  • Splash Financial: 40% or less required

Many lenders don’t have fixed DTI requirements, but still consider your debt when you apply — you just need to show you make enough to support your new repayments. With these lenders, the best way to find out if your DTI is low enough is to fill out a prequalification application. If you prequalify for a rate, your DTI likely checks out.

What other factors do lenders consider?

In addition to debt and income, lenders typically look at the following factors when you apply to refinance your student loans:

  • Amount of student debt. Many lenders require you to have at least $5,000 to $7,500 in debt to qualify for refinancing. Some also cap it at around $100,000.
  • Credit score. Most refinancing providers require you to have good credit at a minimum — or a creditworthy cosigner.
  • Degree. Some lenders won’t refinance student debt from a program you didn’t finish.
  • Student loan repayment history. In some cases, you might be required to have a record of at least a year of on-time repayments to qualify for refinancing.
  • Career. While not a requirement, being in a high-paying field like medicine or law can sometimes get you a better deal.

How can student loans affect my DTI?

Since student loans are a type of debt, having them can increase your DTI. However, it’s not your student loan balance that affects your DTI, but your monthly repayments. Since student loans come with the option of longer terms to lower repayments, having a high balance might not have the same negative effect as other types of debt.

What other factors affect my DTI?

In addition to student loan payments, lenders typically consider the following types of monthly payments when calculating your DTI:

  • Mortgage payment
  • Personal or car loan payment
  • Child support
  • Credit card minimum monthly payments
  • Unpaid bills in collections

What you need to know about DTI

DTI ratio calculator

Calculate what percentage of your income is allotted to debt.

Your monthly debt payments
Credit card paymentsCar loan payments
$/ mo
$/ mo
Mortgage paymentsOther loan payments
$/ mo
$/ mo
Your monthly income
$

Fill out the form and click “Calculate” to see your DTI ratio.

Your debt-to-income ratio is %

Compare student loan refinancing offers

Data indicated here is updated regularly
Name Product Min. Credit Score Max. Loan Amount APR
Discover Private Consolidation Loan
Good to excellent credit
$150,000
2.80% to 12.49%
Splash Financial Student Loan Refinancing
660
None
Starting at 1.89%
Save on your student loans with this market-leading newcomer.
Credible Student Loan Refinancing
Good to excellent credit
None
1.99% to 9.24%
Get prequalified offers from top student loan refinancing providers in one place.
Education Loan Finance Student Loan Refinancing
680
None
2.39% to 5.99%
Lower your student debt costs with manageable payments, affordable rates and flexible terms.
Earnest Student Loan Refinancing
650
$500,000
1.99% to 5.64%
Get a tailored interest rate and repayment plan with no hidden fees.
SoFi Student Loan Refinancing Variable Rate (with Autopay)
650
Full balance of your qualified education loans
2.25% to 6.09%
A leader in student loan refinancing, SoFi can help you refinance your loans and pay them off sooner.
Purefy Student Loan Refinancing (Variable Rate)
620
$300,000
2.27% to 7.49%
Refinance all types of student loans — including federal and parent PLUS loans.
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Compare up to 4 providers

4 strategies to refinance your student loans with a high DTI

It might be possible to refinance — even if you have a high DTI — by using a few different strategies:

  • Lengthen your student loan term. Talk to your servicer about switching to a longer loan term to lower your monthly payments — and therefore your DTI.
  • Pay off other types of debt. Most other loans don’t come with terms as long as student loans, resulting in higher monthly repayments. Focus on paying those off before you refinance.
  • Ask for a raise. The more money you have coming in each month, the lower your debts will be in comparison to your income.
  • Wait it out. If lengthening your term doesn’t make much of a difference, hold off on refinancing until you’ve had time to make more of a dent in your student loan repayments.

Bottom line

Having a DTI below 40% is often a necessity if you’re interested in refinancing your student loans — but aim for below 20% if you want a good deal. It’s not the only factor lenders consider, however. Often your credit score and total student debt load count for as much — if not more.

You can learn more about how it all works by reading our guide to student loan refinancing.

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