How Many Times Can You Refinance?

Last Updated: July 10, 2021 by Melanie Hanson

There is no legal limit to the number of times you can refinance your student loans, either with a single lender or with multiple lenders.

How Many Times You Can Refinance Student Loans

Most refinance lenders do not limit the number of times you can refinance your loans with them. Further, student loan refinancing typically does not cost much, if anything. Many lenders do not charge application or origination fees.

Note that each time you refinance, you will have to submit a new application; every application requires a hard credit check that may affect your credit score.

Refinance With One Lender

You may refinance with the same lender multiple times. Generally, the number of applications you can make is limited to one (1) per month or one (1) per quarter; it depends on how long the lender makes their offer available. Most lenders leave an offer on the table, so to speak, for 30 days.

Aside from this limitation, you may choose to refinance again whenever your financial situation improves. Improved financial standing may qualify you for a lower interest rate with the same lender.

People also choose to refinance again with the same lender as a means of adding or releasing a co-signer. In cases where the lender does not allow spouses to combine student loan debts, adding a spouse as a co-signer is the only way for a married couple to share a debt.

Refinance With Multiple Lenders

Smart borrowers shop around for the lowest interest rates and pay attention to the best promotions.

Many lenders offer refinance customers a cash bonus. Any lender offering a bonus usually only offers them to new customers. Some borrowers practice strategic churning.

Lenders may also have bonus codes (similar to discount codes on retail websites) or referral programs. Rules vary regarding eligibility and restrictions.

Strategic Churning

It is not uncommon for private lenders to offer bonus cash to new customers who refinance. Some lenders offer over $1,000. To take advantage of these bonus offers, some borrowers practice “churning.”

Churning refers to borrowers leap-frogging from one lender to the next, refinancing their student loans several times over the course of months or years and collecting cash bonus offers with each subsequent refinance loan.

If you choose to practice churning, however, note that interest rates may change over time. For example, if interest rates begin to rise, churning may no longer be worth it; a $500 cashback bonus isn’t worth refinancing if it ultimately costs you $500 in additional interest.

Simultaneous Applications

Financial experts recommend applying to more than one refinance lender at a time. Simultaneous applications allow you to comparison shop, and you may be able to negotiate a lower rate with a representative.

When you receive an offer from a lender, even if the offer is just preliminary, you should also receive a point-of-contact name, phone number, and/or email address. This person will likely negotiate the final offer.

Some lenders do not allow any room for negotiation. Online-only lenders are the most reliant on data and algorithms to process refinance loan offers.

Sources

  1. Bogleheads.org, Student Loan REFI: Megathread
  2. reddit, Thoughts on Churning Student Loan Refinance Bonuses?