Refinancing 30 March 2023

5 Ways to Refinance a Student Loan with Bad Credit and the Best Lenders for It

Struggling with bad credit, high student loan payments, and looking to refinance your loans? Here are 5 ways to refinance student loans with bad credit along with the best lenders for it.

Best student loan refinancing companies

Student loan debt can be a major burden for recent graduates as well as anyone who has pursued higher education. Refinancing your student loans can be a great way to lower your interest rates, reduce your monthly payments, and potentially save thousands of dollars over the life of your loan. However, if you have bad credit, you may have trouble finding a lender willing to work with you. Fortunately, there are ways you can get a student loan refinance with bad credit.

In this article, we suggest 5 ways you can get your student loan refinanced even with a credit that is not up to the mark. We also provide you with reviews of the best refinance companies that refinance student loans with bad credit, to help you find the right one if you have poor credit.

What is Student Loan Refinancing?

Refinancing allows you to bring together all or some of your student loans, federal and private, and replace them with a new single one. This is done to receive repayment advantages which can mainly include having one single monthly payment instead of multiple for easier management, a lower interest rate which can reduce total loan cost, and/or an extended loan term to reduce monthly payments.

However, keep in mind that refinancing student loans disqualifies you from taking advantage of federal benefits like loan forgiveness programs, deferment, forbearance, or income-driven repayment plans. Moreover, whether you qualify for refinancing also depends on your credit score – the higher the score the better the chances are of getting your loan refinanced. Nevertheless, there are ways to get student loan refinancing with bad credit.

5 Ways to Refinance Student Loans With Bad Credit

In the event that your credit score is still not where you’d like it to be, consider the following methods to help you refinance your student loans.

#1 Apply With a Cosigner

Refinancing with a co-signer who has good credit can help you qualify for better terms and lower interest rates. You can add someone from your friends or family when applying for a student loan refinance with bad credit.  The credit of your cosigner will then be considered so your poor credit won’t cost you the option of refinancing.

Moreover, if your cosigner’s credit is very good, you can even enjoy better loan terms or a lower interest rate on your refinanced loan. However, be aware that if you default on the loan, it can negatively impact the cosigner’s credit score as well as they will be liable for your debt too once the loan is signed.

#2 Improve Cash Flow and Debt-to-Income Ratio

Your cash flow is influenced by the Debt-to-Income ratio which is taken into account by lenders when refinancing loans. It basically is the ratio between your pretax monthly income and your total monthly debt payments. If your cash inflow or income is too low compared to your monthly loan payments, lenders will hesitate to facilitate you with refinancing.

Therefore, demonstrating steady income and cash flow can make you a more attractive candidate for refinancing.  You can consider taking on a part-time job or a side gig, get a higher-paying job, or work over-time to supplement your income, thus showing your ability to repay the loan.

You can even improve the ratio by reducing your debt by making more monthly payments, if you can, on time beforehand.

#3 Improve Credit Score

When applying to refinance your student loans, keep in mind that lenders will review your credit history too when deciding whether or not to approve you for a refinanced loan. Therefore, it is important to try and improve your credit as much as you can before applying for student loan refinancing. Better credit will also help you qualify for better refinancing terms and interest rates.

Here are some ways to help better your credit score.

1. Pay bills on time and in full

Late or missed payments are a major factor that can contribute to lowering your credit score. Paying bills on time and in full each month demonstrates responsible credit behavior, which can positively impact your credit score.

2. Reduce the amount of debt you owe

Owing large sums of debt, especially credit card debt, can reduce your credit score. Consider paying down debt or consolidating your loans into a single loan. This will help to reduce your debt-to-income ratio and improve your score.

3. Check your credit report for errors and dispute them

Errors on your credit report (such as inaccurate personal information, incorrect account balances, or fraudulent activity) can negatively impact your credit score. Regularly checking your report and disputing any errors can help maintain a healthy credit score.

4. Apply for a secured credit card or loan if needed

If you have little or no credit history, it can be difficult to obtain credit. A secured credit card or loan, where you provide collateral to the lender, can be a good way to establish credit and build a positive credit history, which in turn can improve your score over time.

#4 Make Sure Loans Are Not in Default

Loans that are in default or delinquent will negatively impact your credit score, and make it difficult to qualify for refinancing. Before applying for refinancing, make sure to bring your loans up-to-date and avoid any further missed or late payments to improve your chances at qualifying.

#5 Search for the Best Lenders

When looking for a student loan refinancing company, research and compare multiple lenders to find the ones that specialize in refinancing student loans for borrowers with bad credit.  The lender you work with should possess certain qualities, such as offering competitive interest rates and good customer service.

Following are the options for top student loan refinance companies or lenders that offer student loan refinancing. Most of these lenders require a credit score of minimum 650. However, even if you have a credit score below the mark, you can still qualify for a refinance loan with a cosigner that meets the credit score criteria and also by taking other measures mentioned above like increasing cash flow and debt-to-income ratio.

5 Best Lenders for Student Loan Refinancing with Bad Credit

LenderScholarooratingOur viewFixed ratesstarting (APR)Variable ratesstarting (APR)Learn more

Laurel Road

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4.8/5Best for low interest rates.

4.49%4.74%Visit website


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4.7/5Lowest fixed-rate loans.

4.49%6.94%Visit website


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4.5/5Best for mid-income earners.

4.49%4.76%Visit website


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4.2/5Provides plenty of added benefits to borrowers.4.99%5.38%Visit website


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4.0/5Best for borrowers without co-signers.

4.96%4.99%Visit website

#1 Laurel Road

This online lender provides personal loans, student loan refinancing, and mortgages. Although Laurel Road offers refinancing to all eligible borrowers, there are also special offers available to medical professionals.


  • Their competitive interest rates may help borrowers save a significant amount of money over time.
  • Repayment terms ranging from five to 20 years are available to help manage monthly payments.
  • Borrowers in medical residency programs are eligible to apply.


  • Special discounts are available only if borrowers open a Laurel Road checking account.
  • Eligibility criteria are strict, potentially making it tough for some borrowers to qualify.
  • Loans cannot be postponed for borrowers returning to school.

Eligibility criteria

  • Must be a degree-holding U.S. citizen or permanent resident.
  • Must have graduated from an eligible school.
  • Be of good credit standing with a score of at least 660.
  • No minimum income requirement exists.
  • Associate degree holders must have graduated from qualifying programs.


Splash Financial is a lending platform that offers federal and private student loan refinancing options. The platform partners with multiple lenders to provide borrowers with competitive interest rates and a range of repayment options.


  • Competitive interest rates are available through Splash Financial, potentially saving borrowers thousands of dollars over the loan term.
  • Borrowers can select from various repayment options, including fixed and variable interest rates and multiple repayment terms.
  • By submitting a single application, borrowers can access refinancing offers from several lenders.


  • Eligibility for refinancing with Splash Financial is limited due to strict credit score and income requirements.
  • The platform does not provide cosigner release, meaning that the borrower is responsible for the loan even if their cosigner passes away or becomes disabled.
  • Loan features and offers vary among refinancers.

Eligibility criteria

  • Must be a U.S. citizen or permanent resident.
  • Be of good credit standing with a score of at least 650.
  • A minimum income of $42,000 is required.
  • Must hold a degree from a Title IV-accredited institution.
  • Debt-to-income ratio, including the new loan, must be less than 45%.
  • Must be at least 18 years old.

#3 LendKey

LendKey is an online platform that helps borrowers refinance and consolidate student loans by connecting them with community banks and credit unions. The company’s goal is to offer borrowers competitive rates and flexible repayment options.


  • LendKey’s partnership with community banks and credit unions provides borrowers with competitive rates and terms for student loan refinancing.
  • Borrowers can save money on the overall cost of their loan as LendKey doesn’t charge origination fees.
  • LendKey offers a co-signer release option, which allows borrowers to remove their co-signer from the loan after making a certain number of on-time payments.


  • LendKey’s eligibility requirements may be stricter than other lenders, which may make it difficult for some borrowers to qualify.
  • The application process for refinancing with LendKey may be more involved and lengthy compared to other lenders, which may be a drawback for some borrowers.
  • LendKey is not available in all states, so borrowers in certain areas may not be able to use the platform.

Eligibility criteria

  • Must be a U.S. citizen or permanent resident.
  • Be of good credit standing with a score of at least 660.
  • Have an annual income of at least $24,000.
  • Owe at least $5,000 in outstanding debt.
  • Must have graduated from an eligible school and program.

#4 SoFi

SoFi is an online lending company that offers a wide range of financial products, including refinancing options for student loans. Its goal is to support individuals in achieving financial independence through affordable financing choices and customized services.


  • Competitive interest rates for refinancing student loans that can potentially help borrowers save money over time.
  • Multiple repayment options, including fixed and variable interest rates, and terms of 5, 7, 10, 15, or 20 years.
  • Provides resources such as career coaching and networking events to help borrowers advance in their careers and increase their earning potential.


  • SoFi has stringent eligibility criteria that include a minimum credit score of 680 and an annual income of at least $50,000.
  • There is no co-signer release option available.
  • Non-U.S. citizens or permanent residents need a co-signer who meets the qualifications.

Eligibility criteria

  • Must be a U.S. citizen or permanent resident.
  • Must have graduated from an eligible educational institution.
  • Borrower or their co-signer must demonstrate a solid financial history.
  • Must be currently employed, have adequate income, or have a job offer that will be effective within 90 days.

#5 Earnest

Earnest is a fintech company that provides personal loans and student loan refinancing. The company’s goal is to provide affordable and easily accessible education to people by offering loan refinancing that has personalized interest rates and relaxed eligibility requirements.


  • Borrowers can defer one payment annually.
  • Loan borrowers can tailor their loan terms.
  • There are no origination, application, or prepayment fees charged by Earnest.


  • Adding a cosigner to the loan application is not an option, making it difficult for those with an insufficient credit history or lower income to qualify for refinancing.
  • Earnest only provides fixed and variable interest rates, making it tough for borrowers looking for more customized loan options.
  • Not available in Nevada.

Eligibility criteria

  • Must be a U.S. citizen or hold a ten-year unconditional green card.
  • Must be 18 years old and above.
  • Have a good credit standing of at least 700.
  • Must have a loan balance of no less than $5,000.
  • The debt must be from a Title IV-accredited institution in the United States.
  • Must reside within the U.S.

Alternatives to Refinancing

If you are unable to qualify for student loan refinancing with bad credit, there are alternative repayment options that you can consider such as the ones given below.

Income-driven repayment plans

Income-driven repayment plans sets the monthly payment based on the income you earn and your family size. These plans allow individuals owing student debt to lower their payments and making the monthly instalments more manageable.


You can consolidate your federal loans which can help lower monthly payments on you loan and extending loan terms. Consolidation usually does not require a credit check, unlike refinancing, and you can keep the benefits associated with federal loans like access to loan forgiveness programs, etc. Moreover, instead of making multiple payments of federal loans you received, you can just make one single monthly payments to help with manageability. This method, however, does not change your interest rate.


Forbearance allows you to temporarily pause your monthly loan payments but there are a few conditions for it. Financial hardship can make you eligible for a forbearance. However bear in mind that if you opt for forbearance, the interest still accrues on your loan and capitalizes.


Deferment, like forbearance, temporarily postpones your student loan payments. Situations like unemployment, economic hardship, military service, cancer treatment, etc., can make you eligible for a loan deferment. If you get approved for  deferment, interest generally does not accrue on your student loan debt.

Loan Forgiveness

Students having federal debt can consider getting their loans forgiven through various loan forgiveness options available via federal and state government. Different forgiveness programs have different eligibility criteria. One such program is the Public Service Loan Forgiveness (PSLF).


Here are some frequently asked questions regarding student loan refinance for bad credit.

What credit score do you need for refinancing student loans?

The credit score needed for refinancing depends on the lender. Generally, most lenders require a credit score of at least 650, but some may require higher scores for the best rates and terms. Make sure you shop around and compare offers from different lenders to find the best refinancing option that fits your credit profile and financial situation.

What is a bad credit score?

Credit scores range from 300 to 850. Anything below 670 is usually considered bad by most lenders in terms of credit. The following ranges can help you determine if you have sufficient credit or if you need to improve it.

· Excellent: 800–850

· Very Good: 740–799

· Good: 670–739

· Fair: 580–669

· Poor: 300–579

Can I refinance student loans with bad credit?

It may be possible to refinance student loans with bad credit through the 5 ways mentioned above, but it can be challenging to qualify for the best rates and terms. Some lenders offer refinancing options for borrowers with lower credit scores or allow borrowers to apply with a cosigner who has a better credit profile. However, it is important to carefully consider the cost of refinancing with bad credit, as it may result in higher interest rates and fees.

Which company will refinance loans with bad credit?

Some best refinance companies that may refinance loans with bad credit include SoFi, Earnest, and LendKey. However, the eligibility requirements and terms for refinancing with bad credit may vary among lenders, so it is important to research and compare offers from different companies to find the best option for your financial situation.

Final Thoughts

In order to refinance student loans, several lenders require a minimum credit score of 650 or higher, which may make it difficult for borrowers with bad credit to qualify. Fortunately, lenders such as Earnest, LendKey, and Splash Financial offer refinancing options for borrowers with less-than-perfect credit. While these lenders may have stricter eligibility requirements, they provide competitive interest rates and a range of repayment options. Be sure to compare your options and choose a lender that best fits your needs and financial situation. Refinancing with bad credit may not be easy, but with some research and careful consideration, you can still find a solution that works for you.