Is Student Loan Refinancing Worth It? 2026 Calculator
This calculator weighs the interest savings of refinancing against closing costs, potential term changes, and the federal protections you give up. Enter your balance, current rate, lender offer, remaining term, and new term. The result shows your net dollar benefit or loss so you can decide before you apply.
New monthly payment
You pay today, so that is a month back in your pocket.
That is more than the you pay today — the shorter term costs more each month but clears the debt sooner.
- Over the whole termStay putRefinance
- Monthly payment
- Interest you pay
- Debt-free
- Total paid
No switching cost to earn back — you are ahead from the first payment, by over the life of the loan.
You earn the switching cost back after payments — around .
At these numbers the new loan never pays for itself: the monthly payment does not fall.
Careful — the lower payment comes from a longer term. Over the full term this deal costs more than staying put.
Both loans are modelled as fixed-rate, fully amortising, with no missed months. A refinance replaces your loan with a brand-new private loan — see what that costs you below.
Rate drop
Monthly change
Interest saved
Lifetime saving
What you give up when federal loans go private
- Income-driven repayment. A private lender sets one payment; it does not fall when your income does.
- Federal forgiveness programmes, including Public Service Loan Forgiveness and any income-driven forgiveness after the full repayment term.
- Federal discharge on death or total and permanent disability — private lenders decide their own policy.
- Federal deferment and forbearance rights, and the federal rehabilitation route out of default.
- The decision is one-way. Once a federal loan is refinanced privately, it cannot be turned back into a federal loan.
Refinancing private loans into a cheaper private loan gives up none of this — it is federal balances that carry the risk.
Four Factors That Determine the Answer
The rate gap is the most visible factor: the wider the spread between your current rate and the refinance offer, the more you save. But three other variables matter just as much. First, remaining term: if you have only three years left, the total interest at stake is small, and closing costs may never be recovered. Second, term length on the new loan: extending from seven remaining years to a fresh ten-year term lowers the monthly payment but can increase total interest even at a lower rate.
Third, and hardest to quantify, is career stability. A steady income makes fixed private payments manageable; an income drop with no access to income-driven repayment can lead to default. The calculator handles the first three factors numerically. For the fourth, assess honestly whether your income is likely to remain stable for the full refinance term. If your answer is uncertain, the value of keeping federal protections rises, and the rate gap needs to be wider to justify the switch.
When Refinancing Is Not Worth It
Refinancing is rarely worthwhile if you qualify for Public Service Loan Forgiveness and plan to complete 120 qualifying payments, because PSLF forgiveness is tax-free under IRC Section 108(f)(1) and refinancing eliminates your eligibility permanently. It is also a poor fit if your remaining balance is small enough that the closing costs approach or exceed the interest savings, or if your federal loans are on an income-driven plan that keeps payments affordable during career transitions.
Converting federal loans to a private loan permanently removes access to IDR plans, PSLF, forbearance, and death and disability discharge. Borrowers on student-loan forums report that refinancing regret surfaces most often after an unexpected job loss or a life event that would have qualified for federal forbearance. The calculator gives you a single net-benefit number. If that number is close to zero or negative, the answer is clear. If it is positive but modest, weigh it against the protections you surrender. For a detailed break-even timeline, use the break-even calculator.
Rate examples are illustrative. This tool does not constitute financial advice or a loan offer. Consult your servicer before refinancing federal loans.
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Related student loan calculators
- Student Loan Refinance Break Even Calculator
- Should I Refinance Student Loans Now or Wait?
- Student Loan Refinance Savings Calculator
Sources
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Sources: ed.gov federal loan protections; IRC Section 108(f)(1) (PSLF tax exclusion); r/StudentLoans refinancing regret threads (2024-2026).
- Federal Direct Consolidation Loan interest rate — the weighted average of the loans being consolidated, rounded up to the nearest one-eighth of one percent (Federal Student Aid, studentaid.gov, Loan Consolidation).
- Amortisation, daily interest accrual and payoff arithmetic — standard loan mathematics; every figure on this page is computed from the numbers you enter.