Best Law School Student Loan Refinance Options in October for 2025

by Alex Hillsberg , MA

Student Finance & Loan Expert

Share

In 2022, student debt in the United States reached $1.7 trillion, surpassing credit card debt and affecting over 43 million borrowers, including law school graduates. With no government subsidy on federal student loan interest for law students, these graduates face significant repayment challenges. In these situations, loan refinancing can be a lifeline when done with the right company. In this article, we highlight five of the best law school student loan refinance companies and provide essential information to help you decide if refinancing is the right choice for you.

Key Things You Should Know About Law School Student Loans

• Around 74% of law school graduates have student debt.
• In 2022, law graduates with student debt borrowed an average of $119,292.
• On average, it can take five to 25 years to repay law school debt.

Table of Contents

1. Who is eligible for a law school student loan refinance option?
2. What are the pros and cons of refinancing law school student loans?
3. What are the best companies for law school student loan refinance options?
4. Can I refinance both federal and private law school student loans?
5. What factors affect the interest rates when refinancing law school loans?
6. How do I apply for a law school student loan refinance option?
7. What is the difference between refinancing and consolidating law school loans?
8. What are the tax implications of refinancing law school student loans?
9. Can parent loans for college with bad credit be a better solution?
10. Can Refinancing Law School Loans Support Further Educational Opportunities?
11. Will refinancing law school loans enhance my career prospects?
12. What should I do to prepare for refinancing my law school loans?
13. Does refinancing law school student loans affect my co-signer's credit and liability?
14. How will refinancing law school loans influence my ability to secure future educational funding?
15. How does refinancing law school student loans affect my credit score?
16. How does refinancing affect loan forgiveness programs for lawyers?
17. How does loan refinancing impact my life in the long run?
18. Factors to Consider When Choosing a Loan Refinancing Option for Law School Debt
19. What pitfalls should I avoid when refinancing my law school loans?
20. What questions should I ask my lender before refinancing my law school loans?
21. Other Things You Should Know About Law School Student Loan Refinance Options

Who is eligible for a law school student loan refinance option?

Loan refinancing eligibility requirements vary between lenders. For law school students, the requirements typically include:

• Credit Score: A good to excellent credit score, generally 650 or higher.
• Income: A steady and sufficient income to cover loan payments, often with a minimum income requirement.
• Degree Status: A completed degree from an accredited institution.
• Employment: Proof of stable employment or a signed job offer if recently graduated.
• Debt-to-income Ratio: A favorable debt-to-income ratio, usually below 50%.
• Citizenship: U.S. citizenship or permanent residency.
• Loan Type: Federal or private student loans eligible for refinancing.
• Co-signer: This may be required if the borrower has insufficient credit or income.

What are the pros and cons of refinancing law school student loans?

Taking out another loan to pay off your student debt might seem counterintuitive and comes with the risks. It's essential to carefully weigh these pros and cons and consider how refinancing fits into your overall college planning process and long-term financial goals. Below are some of the advantages and disadvantages of student loan refinancing:

Pros

• Lower Interest Rates: Refinancing can secure a lower interest rate, reducing overall loan costs.
• Single Monthly Payment: Combining multiple loans into one simplifies repayment.
• Flexible Terms: Borrowers can choose new repayment terms that fit their financial situation, potentially lowering monthly payments.
• Potential Savings: Reduced interest rates and optimized repayment terms can lead to significant long-term savings.

Cons

• Loss of Federal Benefits: Refinancing federal loans with a private lender forfeits benefits like income-driven repayment plans and loan forgiveness programs.
• Variable Interest Rates: Some refinanced loans may offer variable rates, which can increase over time.
• Fees: Some lenders may charge origination or other fees, adding to the loan cost.
• Credit and Income Requirements: Qualification for refinancing depends on having a good credit score and stable income, which may be challenging for some graduates. Additionally, credit scores may significantly impact the monthly payment rate, with graduates having higher credit scores often qualifying for lower interest rates and better terms.

What are the best companies for law school student loan refinance options?

1. Advantage Education Loan

Advantage Education Loans are provided by the Kentucky Higher Education Student Loan Corporation (KHESLC), a state-based, nonprofit lender offering low fixed rates without origination or late fees. Advantage Education Loan can cover up to 100% of school-certified educational expenses for both students and parents. While available outside Kentucky, residents of certain states are not eligible, including Alaska, Delaware, Iowa, Maine, Maryland, Nevada, New Jersey, Rhode Island, Washington, and the District of Columbia.

• Minimum Credit Score: 670
• Fixed Annual Percentage Rate: 5.95-9.99%
• Variable Annual Percentage Rate: Not disclosed

2. Education Loan Finance

Education Loan Finance (ELFI), offered by Tennessee-based SouthEast Bank, provides private student loans and refinancing options. ELFI offers competitive fixed and variable interest rates, with no application or origination fees, making it an attractive option for borrowers. They also provide a range of repayment terms, allowing borrowers to choose the plan that best fits their financial situation. ELFI’s loans are accessible to students and parents nationwide, aiming to simplify the student loan process and offer potential savings.

• Minimum Credit Score: 680
• Fixed Annual Percentage Rate: 5.48-8.69% (subject to credit approval)
• Variable Annual Percentage Rate: 5.28-8.99% (subject to credit approval)

3. Navy Federal

Navy Federal Credit Union offers student loan refinancing for private and federal student loans with competitive interest rates and no application or origination fees. Eligibility requirements for Navy Federal student loan refinancing include having a minimum monthly income of $2,000 and a good credit score. If a co-signer is involved, the borrower must have at least $100 in monthly income, while the co-signer must meet the $2,000 monthly income threshold. These criteria ensure both the borrower and co-signer have the financial stability to manage the loan repayment effectively.

• Minimum Credit Score: Not disclosed
• Fixed Annual Percentage Rate: Not disclosed
• Variable Annual Percentage Rate: Not disclosed

4. LendKey

LendKey's student loan refinancing allows borrowers to consolidate federal and private student loans into one manageable payment. It offers a fast and simple application process with no origination or pre-payment fees. Borrowers can also choose between fixed and variable rates, with terms ranging from 5 to 20 years. LendKey partners with a network of community banks and credit unions to provide competitive rates and flexible repayment options.

• Minimum Credit Score: Not disclosed
• Fixed Annual Percentage Rate: 5.24%
• Variable Annual Percentage Rate: 5.54%

5. RISLA

RISLA, a nonprofit state agency, offers some of the lowest rates in the industry for student loan refinancing, with no application, origination, late, or insufficient funds fees. They provide borrowers protection, such as income-based repayment options and payment forbearance to temporarily suspend or reduce payments during financial hardship. Military members may also qualify for Servicemembers Civil Relief Act (SCRA) benefits, and loan forgiveness is available in cases of permanent disability or death. RISLA also offers a pay-later refinance option, allowing students to defer repayment until six months after graduation, even while attending school.

• Minimum Credit Score: 680
• Fixed Annual Percentage Rate: Starts at 6.34%
• Variable Annual Percentage Rate: Not disclosed

Can I refinance both federal and private law school student loans?

Yes, you can refinance federal and private law school student loans, combining them into a single loan with potentially lower interest rates and new repayment terms. It's crucial, however, to explore all options for paying for law school before resorting to student loans. The Law School Admission Council (LSAC) recommends prioritizing federal loans, which often have lower interest rates and more favorable terms than private loans.

What factors affect the interest rates when refinancing law school loans?

Several factors influence the interest rates when refinancing law school loans:

• Credit Score: A higher credit score often results in lower interest rates as it indicates lower risk to lenders. While it is common among private lenders to have double-digit interest rates, some, like the ones on our list, have significantly lower APRs.
• Income: A stable and sufficient income can help secure better interest rates, demonstrating the borrower's ability to repay the loan.
• Debt-to-income Ratio: A lower debt-to-income ratio suggests better financial health, which can lead to lower rates.
• Loan Amount and Term: The amount being refinanced and the chosen repayment term can impact the interest rate, with longer terms typically having higher rates.
• Economic Conditions: Prevailing economic conditions and market interest rates also play a significant role in determining loan rates.
• Lender Policies: Different lenders have varying criteria and risk assessments, affecting the offered interest rates.

How do I apply for a law school student loan refinance option?

Applying for a law school student loan refinancing involves several steps:

• Research Lenders: Compare various lenders to find the best interest rates and terms. You may use the list of lenders mentioned here as a point of reference.
• Check Eligibility: Ensure you meet the lender's credit score, income, and other eligibility requirements. If you don't meet these criteria, consider applying with a trustworthy co-signer with a strong credit score and sufficient income. This can improve your chances of approval and help you secure better interest rates and terms.
• Gather Documents: Collect necessary documents, such as proof of income, loan statements, and identification.
• Submit Application: Complete the lender's application form online or in person.
• Choose Terms: Select your preferred interest rate type (fixed or variable) and repayment term.
• Approval and Acceptance: Once approved, review and accept the loan terms.
• Loan Payoff: The new lender pays off your existing loans, and you start paying the new lender.

What is the difference between refinancing and consolidating law school loans?

While both serve the purpose of simplifying student loan payments, refinancing and consolidating law school loans are two distinct processes:

• Refinancing: This involves taking out a new loan to pay off one or more existing loans. The new loan typically has a lower interest rate and new repayment terms, potentially reducing your overall interest costs and monthly payments. Refinancing can include both federal and private loans but often results in the loss of federal loan benefits.
• Consolidating: This process combines multiple federal loans into a single Direct Consolidation Loan, simplifying repayment with one monthly payment. While it doesn’t necessarily lower your interest rate, it can extend your repayment term, reducing monthly payments but possibly increasing the total interest paid over time. Consolidation is available only for federal loans and retains federal benefits.

What are the tax implications of refinancing law school student loans?

Refinancing law school student loans can introduce certain tax considerations that borrowers should carefully evaluate. While the primary focus of refinancing is often on lowering interest rates or monthly payments, it's essential to understand how this step may influence your tax liabilities and potential deductions.

One key factor to note is the treatment of student loan interest deductions. Under current tax laws, borrowers may deduct up to $2,500 of student loan interest paid during the tax year if they meet specific income requirements. However, when refinancing a federal or private student loan with a private lender, this deduction is generally still applicable as long as the refinanced loan qualifies as a student loan under the IRS definition. It's essential to maintain thorough records of interest paid and consult a tax advisor to ensure eligibility for this deduction.

For borrowers pursuing income-driven repayment plans or federal loan forgiveness programs prior to refinancing, it's important to recognize that switching to a private lender eliminates eligibility for those federal benefits. While this change simplifies your repayment structure, it nullifies the potential for tax-free loan forgiveness that is often available under federal programs such as Public Service Loan Forgiveness (PSLF). This is especially significant because any forgiven balance under PSLF does not count as taxable income, whereas forgiveness through other means, like private lender settlements, may result in tax liabilities.

Additionally, borrowers should be aware of their new loan terms when refinancing, particularly if they decide to extend the repayment period. While extending the period may lower monthly payments, it could result in more interest paid over the life of the loan, thus potentially increasing the amount of deductible interest. Comparing the long-term financial impact with potential short-term savings is crucial.

Finally, when exploring refinancing options, borrowers should consider reputable lenders offering transparent terms on rates and fees. For those seeking alternatives, examining various private student loan options tailored to law school graduates can help identify options that align with both financial and tax goals. Taking a holistic view of how refinancing fits into your overall financial strategy ensures a more informed decision, reducing both repayment costs and potential tax concerns.

Can parent loans for college with bad credit be a better solution?

Evaluating alternatives to refinancing is crucial when managing educational debt. For families encountering credit challenges, exploring specialized funding options may provide competitive terms and enhanced flexibility. Lenders offering programs tailored for cases of limited credit history can present a viable alternative, potentially mitigating risks associated with conventional refinancing. Investigate offers from institutions focused on addressing credit limitations, such as options available for parent loans for college with bad credit, and assess how these alternatives integrate with your overall financial plan.

Can Refinancing Law School Loans Support Further Educational Opportunities?

Strategically refinancing law school loans can free up monthly cash flow to invest in further professional development and specialized legal education. Allocating available resources toward advanced courses or certifications may enhance career prospects in a competitive legal market. When considering additional education, assess refinancing options that offer stable repayment structures without hidden fees, ensuring that the financial flexibility gained does not compromise future academic investments. Investigate enrollment criteria and funding prerequisites, including what do I need to apply to online college, to align your refinancing decision with long-term professional goals.

Will refinancing law school loans enhance my career prospects?

Refinancing may lower monthly payments and reduce overall debt costs, which in turn can free up resources for targeted career development and advanced legal training. With improved cash flow, law graduates can invest in specialized certifications, skill-enhancing courses, and networking opportunities that position them for higher-level roles. This financial flexibility can facilitate transitions into competitive positions and bolster your qualifications for jobs that make over 100k, ultimately enhancing long-term earning potential.

What should I do to prepare for refinancing my law school loans?

Compile all necessary financial documentation—such as income statements, current loan balances, and credit reports—to ensure a smooth application process. Assess your credit standing and address any discrepancies to secure favorable interest rates. Review lender-specific requirements and fee structures in detail to avoid surprises. Explore alternative educational funding strategies, including insights from which is the easiest bachelor degree, to align your refinancing decision with your broader financial and professional objectives.

Does refinancing law school student loans affect my co-signer's credit and liability?

Refinancing law school loans often involves a co-signer, whose credit profile and financial responsibilities become interlinked with the new loan terms. When a co-signer is part of the agreement, any change in payment behavior—such as a delayed or missed payment—can adversely impact their credit score just as it does the primary borrower’s. Additionally, co-signers assume full responsibility if the primary borrower fails to meet the repayment schedule. It is therefore imperative for both parties to fully review the lender’s terms and assess potential risks before proceeding with refinancing. Evaluating alternative financing options, such as MBA student loans, may provide further insights into securing favorable terms while mitigating liability concerns for all involved.

How will refinancing law school loans influence my ability to secure future educational funding?

Refinancing alters your debt profile by transforming multiple loan terms into a single agreement, which may affect your overall debt-to-income ratio and future borrowing capacity. Lenders evaluating subsequent student loan applications might consider your current consolidated debt structure alongside your repayment history and updated credit profile. Carefully assess if refinancing could restrict eligibility for new funding opportunities—especially if further education or specialized legal training is anticipated. In scenarios where additional educational investment is likely, understanding the optimal timing can be crucial. Review factors such as loan term modifications and market interest rate trends while exploring resources like When do you apply for student loans? to make an informed decision.

How does refinancing law school student loans affect my credit score?

Refinancing law school student loans can impact your credit score in several ways. Initially, when you apply for refinancing, the lender performs a hard credit inquiry, which can temporarily lower your credit score by a few points. However, this impact is usually minor and short-lived.

Over time, successful refinancing can improve your credit score by helping you secure a lower interest rate and reduce your monthly payments, making it easier to consistently make on-time payments. This can also lower your law school debt-to-income ratio, which positively influences your credit profile. Additionally, having a single consolidated loan simplifies your repayment process and can further enhance your credit score by ensuring regular, timely payments.

To give you an idea of how much law school graduates might pay for their student loans from private lenders, below are the estimated monthly payments based on different income levels and APRs:

How does refinancing affect loan forgiveness programs for lawyers?

One of the biggest drawbacks of loan refinancing is its impact on loan forgiveness programs. Refinancing law school loans can significantly affect your eligibility, especially for federal loans. When you refinance federal loans with a private lender, you lose access to federal loan forgiveness programs like Public Service Loan Forgiveness (PSLF), available to lawyers in qualifying public service jobs. This loss of benefits can be a disadvantage if you plan to pursue a career in public service and rely on loan forgiveness.

Private loans, however, are not eligible for federal forgiveness programs from the start. Refinancing private loans typically aims to reduce interest rates and payments but does not offer any forgiveness options. Therefore, consider the trade-offs carefully before refinancing federal loans if you plan to pursue loan forgiveness.

In 2023, federal student loan forgiveness amounted to $17.5 billion in total distributed across different programs.

How does loan refinancing impact my life in the long run?

Refinancing your student loans can still affect your long-term financial health, potentially extending the repayment period to 20 years or more. However, because refinancing can reduce monthly payments and overall interest costs, it eases financial stress, making its impact less severe than regular student loans.

Due to the effects of rising college tuition on students, student debt appears to be unavoidable for many. It's important to remember that student debt, whether refinanced or not, can significantly impact important life decisions. Many individuals aged 60 and older still carry an average of $37,300 in student loans, significantly surpassing the average age to pay off student loans of around 40 years old. According to Gallup, 71% of students and former students report that student debt delays major milestones. Therefore, while refinancing provides immediate relief, careful planning is essential to avoid long-term financial strain.

Factors to Consider When Choosing a Loan Refinancing Option for Law School Debt

When selecting a loan refinancing option for law school debt, understanding the nuances of various lenders and their terms is vital to make an informed decision. While lower interest rates are often the primary incentive to refinance, borrowers must also weigh other considerations that could significantly impact their financial future.

One crucial factor to evaluate is the availability of flexible repayment options. Some lenders provide deferment or forbearance benefits during periods of financial hardship, allowing borrowers to temporarily pause or lower their payments without penalty. Additionally, the ability to choose between fixed and variable interest rates can help align the loan with your long-term financial goals.

Another aspect to consider is the credit score requirement. Those with limited credit history may face obstacles in securing favorable rates or even qualifying for refinancing. In such situations, exploring student loans without credit and no cosigner could be beneficial, particularly if you're just starting to build your credit profile and require accessible funding.

It's equally important to examine customer service quality and loan transparency. Leading refinance companies often offer robust support systems, including responsive customer service teams and online tools to help borrowers navigate the repayment process. Ensure the lender's terms are clearly detailed, with no hidden fees like origination or prepayment penalties that might inflate the cost of refinancing.

Finally, consider the long-term trade-offs of refinancing, especially if you're moving federal loans to a private lender. While this step might reduce your interest rate and monthly payments, you would forfeit access to income-driven repayment plans and federal loan forgiveness programs.

By diligently analyzing these factors, law school graduates can not only address the immediate burden of repayment but also safeguard their financial well-being in the years to come.

What pitfalls should I avoid when refinancing my law school loans?

When refinancing law school loans, scrutinize lender transparency and contract details to mitigate unforeseen risks. Look for hidden fees, unclear terms on repayment flexibility, and potential penalties for early repayment. Confirm that any loss of federal protections aligns with your long-term financial strategy while cross-referencing alternative funding options such as cheap online schools. Assess the reputability of the lender through independent reviews and verify that all disbursement conditions are clearly articulated to avoid misinterpretation.

What questions should I ask my lender before refinancing my law school loans?

Ensure you obtain clear details on interest rate structure, including conditions for rate adjustments and potential prepayment penalties. Clarify all fees associated with the refinance, such as application, origination, or any hidden charges, and request a full breakdown of repayment terms and options for payment flexibility during financial hardship. Inquire about any borrower protection features, such as forbearance or deferment options, and confirm how changes in loan terms may affect your credit profile. Additionally, evaluate how the lender’s offerings compare with alternative financial solutions, as seen by resources like What are the most affordable online universities for working adults?.

Key Findings

• In 2022, student debt in the United States reached $1.7 trillion, affecting over 43 million borrowers, including law school graduates.
• Around 74% of law school graduates have student debt, with an average borrowing amount of $119,292 in 2022.
• Repaying law school debt can take between five to 25 years.
• According to Gallup, 13% of students and former students report that they delayed marriage because of student debt.
• In 2023, federal student loan forgiveness amounted to $17.5 billion.

Other Things You Should Know About Law School Student Loan Refinance Options

Should I refinance my law school loans?

Refinancing law school loans can be a smart move if you can secure a lower interest rate, reducing your overall repayment costs and monthly payments. However, it's important to consider that refinancing federal loans with a private lender means losing federal benefits such as income-driven repayment plans and loan forgiveness programs. Evaluate your financial stability, credit score, and long-term career plans before deciding if refinancing is right for you. Consulting with a financial advisor can also provide personalized guidance based on your situation.

Can you defer student loans while in law school?

Yes, you can often defer student loans while in law school. Federal student loans typically offer in-school deferment, which allows you to postpone payments until after graduation. Some private lenders also provide deferment options, but the terms and availability vary. It's important to contact your loan servicer to understand your deferment options and any potential interest accrual during the deferment period.

Is taking out loans for law school worth it?

Taking out loans for law school has its pros and cons. On the positive side, a law degree can open doors to high-paying careers and opportunities in various legal fields. However, fewer than one in four new law school graduates believe their legal education was worth it considering how much online college or traditional college costs, highlighting the significant burden of student debt and the potential financial strain. It's essential to carefully weigh the long-term financial implications and consider potential earnings before deciding to take on such a substantial financial commitment.

What features should I look for in a law school loan refinance company?

When choosing a law school loan refinance company, look for competitive interest rates, both fixed and variable, as well as flexible repayment terms that fit your financial situation. Check for the absence of origination, application, or prepayment fees to minimize additional costs. Additionally, consider companies that offer strong customer service, clear eligibility requirements, and benefits such as unemployment protection or forbearance options in case of financial hardship.

What alternatives are there to refinancing law school student loans?

Alternatives to refinancing law school student loans include enrolling in income-driven repayment plans, which adjust your monthly payments based on your income and family size, and exploring loan forgiveness programs like PSLF for those in qualifying public service jobs. Other options include deferment or forbearance during periods of financial hardship and seeking traditional or online college scholarships, grants, or employer assistance programs to help manage or reduce your loan balance. Each alternative has its benefits and drawbacks, so it's important to consider your financial goals and employment plans when exploring these options. Additionally, determining what is the best way to save for college involves assessing various strategies that align with your long-term financial objectives.

References:

• ABA. (2022). Student debt: The holistic impact on today's young lawyer. American Bar Association. Retrieved July 23, 2024.
• Carter, M. (2024, May 14). Current student loan refinance interest rates. Credible. Retrieved July 23, 2024.
• Gallup. (2023, February 9). The state of higher education 2024. Gallup.com. Retrieved July 23, 2024.
• Hanson, M. (2023, June 30). Average law school debt. Education Data Initiative. Retrieved July 23, 2024.
• Hanson, M. (2023, October 10). Student loan forgiveness statistics [2023]: PSLF data. Education Data Initiative. Retrieved July 23, 2024.
• LawHub. (2023). Law school debt in the United States. LawHub.org. Retrieved July 23, 2024.
• Marken, S. (2024, April 17). Most student loan borrowers have delayed major life events. Gallup.com. Retrieved July 23, 2024.
• Scholarship America. (2022, September). The far-reaching impact of the student debt crisis. ScholarshipAmerica.org. Retrieved July 23, 2024.