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Student Loan Refinance Calculator

Find out how much refinancing your student loan saves.

How it is calculated

The tool works out the standard monthly payment for the same balance and the same term at two rates and compares them. For each rate, with monthly rate i = annual rate ÷ 100 ÷ 12, payment = balance × i ÷ (1 − (1 + i)−months); at a 0% rate it is simply balance ÷ months. Monthly savings = old payment − new payment and total savings = monthly savings × months. The balance is what you owe now, and the term is the number of months remaining, used for both loans. It must be a whole number of months from 1 to 600; a fractional or longer term gives no result, and so does a balance of zero or a negative rate. The comparison assumes the new loan runs for the same number of months, and it does not include origination fees, later rate changes or lost federal protections. A negative result, shown with the sign before the dollar sign, means the new loan costs more.

Worked example

You owe 30000 at 7.5% with 120 months left, and a lender offers 5% over the same 120 months. Step 1: old payment at 7.5% is about $356.11. Step 2: new payment at 5% is $318.20, so the monthly saving is 356.11 − 318.20 = $37.91. Step 3: over 120 months the total saving is 37.91 × 120 = $4,549.05. If the new rate were 7.5% and the old one 5%, the same figures would show as negative (-$37.91 a month), meaning refinancing would cost you more.

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Common mistakes

  • Entering the original loan amount rather than the current balance. The calculation needs what you still owe today.
  • Entering the full original term instead of the months remaining. The payment on the old loan would be underestimated, so the savings would look smaller than they are. Terms above 600 months or with fractions of a month give no result.
  • Choosing a much longer term for the new loan and expecting the tool to show it. It uses one term for both, so the lower-payment-for-longer effect is not shown; run it separately to see how a longer term raises total interest.
  • Ignoring fees and the loss of federal benefits such as income-driven repayment. The tool counts only the interest difference.
  • Typing rates as decimals (0.075) rather than percent (7.5). The tool reads 0.075 as 0.075%, which makes both payments almost the same.

About this calculator

Refinancing a student loan means taking out a new private loan, ideally at a lower interest rate, to pay off one or more existing student loans — the new loan then replaces the old ones, with a new rate, term, and monthly payment. Because interest compounds over the life of the loan, even a modest rate reduction can produce meaningful savings, both in the monthly payment and across the full repayment term.

Refinancing federal loans with a private lender does come with a tradeoff worth noting: it forfeits federal protections such as income-driven repayment plans and loan forgiveness programs, so the decision is not just about the rate. This calculator compares your current loan's payment and total interest against a refinanced rate and term to show the monthly savings and lifetime interest savings.

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