SOFR Student Loan Rate Calculator
Your variable student loan rate equals a benchmark index plus a fixed margin. Most private lenders now use SOFR, the Secured Overnight Financing Rate published daily by the Federal Reserve Bank of New York. When SOFR moves, your payment adjusts at the next reset date. Enter your SOFR value and margin above to see the effect on your monthly cost.
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.
How SOFR Plus Your Margin Sets the Rate
SOFR reflects the cost of overnight borrowing collateralised by Treasury securities and serves as the reference rate for most new variable-rate private student loans. Lenders add a fixed margin, typically a few percentage points, on top of the published SOFR value to arrive at your interest rate. That margin is locked at origination and does not change, so every movement in your rate comes entirely from SOFR itself.
Adjustment periods vary by lender and loan product. Some loans reset monthly, others quarterly. On the reset date your servicer takes the current SOFR reading, adds your contractual margin and recalculates the payment. If SOFR has risen since the last reset, your payment goes up; if it has fallen, you pay less. The rate cap calculator can show you the ceiling your loan contract imposes on these adjustments, giving you a worst-case monthly number.
Rate-Shopping and the Federal-to-Private Trade-Off
When comparing variable-rate offers from multiple lenders, focus on the margin rather than the headline rate. Every lender uses the same SOFR reading, so a lower margin is the only lasting advantage one offer has over another. You can apply to several lenders within a 14-to-45-day window and the credit bureaus will generally treat the multiple hard inquiries as a single event for FICO scoring purposes, meaning your score takes only one hit.
If the loan you are refinancing is federal, switching to a private variable-rate loan means permanently giving up income-driven repayment, forgiveness eligibility, and federal forbearance protections. That trade-off is worth modelling carefully before you commit. The variable-rate evaluation page walks through the scenarios where a SOFR-linked loan saves money versus where locking in a fixed rate provides more certainty for the full term.
SOFR values change daily. The calculator uses the value you enter, not a live feed, so check the New York Fed website for the most recent published rate.
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Sources
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Federal Reserve Bank of New York (SOFR publication); FICO inquiry deduplication window (14-45 days, credit bureau documentation).
- 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.