Student loan refinancing - FAQs

If you have student loans, you may qualify for a lower interest rate. By refinancing more than one loan, you are in fact consolidating them.

Private loans can offer more favorable rates because they're based on your actual credit history and current financial situation. Usually you can qualify if:

  • You have a satisfactory credit history;
  • You’re making a steady income; and
  • You have the ability to repay your debt

How much could you save? Use this refinance calculator.

If you have several federal student loans, you can consolidate them under one loan. If you have Private student loans the only way to consolidate them into one loan is through refinancing. To get a lower monthly payment, you'd make repayments over a longer period of time.

You may need to consolidate under a federal loan program to qualify for special consumer protections. For example:

  • Public Service Loan Forgiveness: if you work at least 30 hours a week for a nonprofit or a government agency for ten years—and make 120 repayments on time—you may qualify to have your remaining federal loan balance forgiven.
  • Teacher Loan Forgiveness: If you teach full-time for five consecutive years at a qualifying low-income school, this program can forgive up to $17,500 of your Federal Direct and Stafford loans.
  • Income-driven Repayment Plans, where the amount of your monthly payment is based on your current income. While your income is low, your payments will be lower. As it increases, so will your payments.

For more information, visit the Federal Student Aid website and search for Loan Forgiveness Programs.

Yes. Only federal loans offer loan forgiveness. By refinancing, your loan becomes a private loan.

If you have federal loans, first check to see the consumer protections they provide, including loan forgiveness options; you stand to lose them if you refinance. If those protections don’t apply to you, if you have a steady income, and a good credit score, you may be a good candidate for refinancing.

Yes. You can make payments more frequently, make an extra payment, pay more than the minimum amount, or make a one-time, lump-sum payment.

Yes. When interest rates fall, or if your credit score has improved, you can refinance again.

Yes. You can refinance through Webster Bank’s Student Loan Refinancing solution.

Webster Student Loan Refinance program includes a comprehensive list of not-for-profit, traditional, four-year schools and graduate programs. If one of the schools is not on our list, you can request that we review and add it.

Refinancing itself shouldn't hurt your credit score. When you're simply shopping for a loan, lenders may pull a “soft” credit inquiry, which won't affect your score. Once you actually apply, Webster Bank will request your full credit report. That's called a “hard” inquiry, and it may drop your score by just a few points.

Multiple inquiries to different student loan providers over a short period of time are considered one inquiry. Therefore, they won’t have much impact on your score. However, if you make multiple applications for refinancing, each lender will pull a “hard” inquiry. That can have a negative effect on your score.

And of course, if you fail to make payments on your present loan while waiting for approval on refinancing, your credit score will fall.

Yes, you can consolidate both federal and private loans. If you wish to consolidate your federal loan, you may no longer be eligible for certain benefits that you may have been eligible for under the Federal Direct Loan Program. For more information about the benefits associated with your federal loan, please contact the servicer of that loan or visit studentaid.ed.gov/sa/.

×