Student Loan Refinance Savings Calculator

If your income is stable and you don't plan to use PSLF or income-driven forgiveness, refinancing student loans to a lower rate can save tens of thousands of dollars. But refinancing federal loans is permanent and gives up important protections. This calculator shows the savings so you can weigh them clearly.

What this calculator does

Enter the balance you'd refinance, your current interest rate and months left, and the refinance offer: rate, term and any fees. The calculator shows:

• your lifetime savings, after fees,
• your current and new monthly payments, and
• total interest under each option.

The formula in plain English

Both loans use the standard loan formula: the fixed monthly payment that pays off the balance over the term at the interest rate.

Total interest = monthly payment × number of months − balance.

Lifetime savings = interest on current loans − interest after refinancing − fees.

If you choose a longer term when you refinance, your payment drops, but total interest may go up even at a lower rate. If you choose a shorter term, your payment may rise, but savings grow.

A worked example

Dr. Lopez has $220,000 in federal loans at an average of 7.2%, with 10 years left. A lender offers 5.4% for 10 years, with no fees.

• Current payment: about $2,577 a month, with about $89,300 in interest.
• New payment: about $2,377 a month, with about $65,200 in interest.
• Lifetime savings: about $24,000, or about $200 a month.

That's real money. But Dr. Lopez works for a nonprofit hospital. If she qualified for PSLF, her remaining balance could be forgiven tax-free after 10 years of income-driven payments, which could be worth far more than $24,000. For her, refinancing would be a mistake. A colleague in private practice with no plans for PSLF might find it an easy decision.

Why it matters at each career stage

If you're: Resident / fellow

Residents rarely benefit from refinancing. Low federal payments during training, plus the possibility of PSLF, are usually worth more than a lower rate. Revisit the question when you sign your first attending contract.

If you're: Employed

If you work in private practice or for a for-profit employer and expect to pay your loans off within several years, refinancing often makes sense. Compare offers from several lenders, and consider refinancing again if rates drop.

If you're: Practice owner

Practice owners usually aren't PSLF-eligible. If your income is strong, refinancing and paying aggressively can free cash for the practice sooner. Keep enough cash on hand, because private lenders offer less flexibility if your income drops.

Refinancing more than once

You can refinance a private loan again if rates fall or your credit improves. There's usually no fee to refinance, so it's worth checking rates every year or two. Some people refinance to a shorter term once their income rises, locking in a lower rate and paying the loan off faster.

If you're unsure about PSLF, a middle path is to keep your loans federal for a few years while you see where your career goes, then refinance once you know you won't use forgiveness. You'll pay a bit more interest in the meantime, but you keep your options open.

Before you refinance

Rule out PSLF. If there's a real chance you'll work for a qualifying employer for 10 years, keep your loans federal.

Check your disability and life coverage. Federal loans are discharged at death or total disability. Make sure your insurance would cover a private balance, or choose a lender with similar protections.

Compare several offers. Rates vary by lender, credit score and income.

Refinance only what makes sense. You can refinance some loans, such as high-rate private loans, and keep others federal.

Next, compare with RAP and PSLF, or see how extra payments speed up payoff.