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How To Transfer Student Loans To Another Lender

You can save money by transferring your student loan to a new lender.

However, no one loan or method for transferring a loan is suitable for every person.

The best option for you is determined by your current situation and the goals you want to achieve with a new loan.

Take a look at these alternatives If you want to transfer your student loan to another lender.

Options To Transfer Federal Student Loan To Another Lender

1. Private Student Loan Refinance

Your federal student loans will be transferred to a private lender if you refinance.

If you go this route, the interest rate will be lower and you’ll have more options when it comes to how long you pay off your loan.

For borrowers with federal student loans, refinancing may be an excellent option for lowering their loan payments or the overall amount they will pay on their education debts.

But, It is not advisable to refinance your federal student loans right now.

Until May 2022, federal student loans are in interest-free forbearance and do not require any monthly payments.

If you refinance, you will lose this advantage and you’ll start to make payments.

Also, You will lose access to any federal loan perks if you refinance with a private lender.

If your interest-free forbearance period has come to an end, you may want to refinance if:

  • You have secure finances and a steady income that will allow you to get a low rate.
  • You won’t need access to federal student loan perks, such as income-based repayment plans.

If you meet none of the following criteria, student loan refinancing isn’t suitable for you:

  • You don’t qualify for a cheaper rate than you currently enjoy.
  • You’ll need access to federal student loan perks.

If you’re consider refinance your student loans, use our student loan refinancing calculator to estimate how much you could save and get quotes from multiple lenders.

2. Federal Student Loan Consolidation

You may switch student loan servicerswhile consolidating your federal student loans, but you will not be switching lenders.

Consolidation allows you to combine several federal student loans into a single, simpler-to-handle federal student loan.

If you refinance your federal student loan, it might reduce your payments, butthe interest rate is still the same.

The good news is that you’ll be paying less down the road. The bad news is that, because it has such a long period, you will pay more in the end.

you may want to consolidate if:

  • If you have FFEL loans, you want to know whether you qualify for Public Service Loan Forgiveness.
  • You want to move from a variable-rate federal loan to a fixed-rate one.
  • You wish to lower your monthly payment amount.
  • You’re dissatisfied with your servicer.

Consolidation is not the right option for you if:

  • You don’t want to end up with no income-driven repayment plan credit.
  • You want to lower your overall loan payment.
  • You want to get out of debt as soon as feasible.

You may fill out a consolidation loan application at studentaid.gov.

You may also like: How to Pay Off 200k in Student Loans

Options To Transfer Private Student Loan To Another Lender

Refinancing private student loans with a new lender at a lower interest rate and longer repayment period will help you save money.

Unlike federal student loans, refinancing your private student loan does not result in losing any of the perks.

If you have private loans and qualify for a reduced interest rate, consider refinancing.

Only those with excellent credit (or their co-signers) and financial histories qualify for the lowest rates to refinance private student loans.

Here’s a list of the best student loan refinancing lenders:

Fixed APR: 2.49-7.04%. Variable APR: 1.98-7.14%

4.8

Financeive Rate
Interest Rates
4.7/5
Loan Amounts
4.5/5
Customer Experience
5/5
Availability
5/5
Approval Rate
5/5
Fixed APR: 1.99-5.79%. Variable APR: 1.74% to 8.27%

4.5

Financeive Rate
Interest Rates
4.4/5
Loan Amounts
5/5
Customer Experience
4.6/5
Availability
5/5
Approval Rate
5/5
Fixed APR: 2.15% – 5.85%. Variable APR: 1.80% – 5.28%. + ($500 Gift)

5

Financeive Rate
Interest Rates
5/5
Loan Amounts
4.7/5
Customer Experience
4.9/5
Availability
5/5
Approval Rate
5/5

Even if you don’t meet the criteria for the lowest advertised rate, you can still save money.

You can refinance as many times as you meet the requirements, so keep an eye on your student loan refinancing rates.

For refinancing, lenders typically seek the following criteria:

  • A bachelor’s degree from a recognized institution is required.
  • Your credit score is in the high 600s.
  • The ratio of debt to income should be less than 50%.

If you don’t meet the requirements on your own, you may be able to refinance with a qualified co-signer.

You may also like: Student Loans And Savings: 6 Questions To Ask

How To Find Your Loan Servicer

You don’t have the option of choosing your loan servicer.

Your lender assigns one to you. If you’re not sure who your loan servicer is, go to My Federal Student Aid.

Check your credit report for private student loans at AnnualCreditReport to see who is currently managing your student loan.

What Happens After I Transfer My Student Loans To Another Lender?

Make a note of the due date for your student loans after you refinance or consolidate them, which might be different from the previous one.

To avoid late payments and to save money on your interest rate (up to 0.25%), set up automatic payments.

Late payments may be recorded on your credit report and lower your credit score.

After you’ve finished refinancing, go to the annual credit report to make sure the old loan has been expunged from your reports.

Your new loan should appear on your credit report.

If any problems are discovered, contact the credit reporting agency.

You may also like: Student Loan Advice: 12 Tips You Should Know In 2022

Frequently Asked Questions

  1. Can you transfer a student loan to another lender?

    You can't modify the servicers on a private student loan, but you can refinance it with another lender.

    The cash does not go over the loan. Rather, the new loan is used to pay off the old one.

  2. Can I refinance my student loans with a different lender?

    You might be able to refinance your student loans with a private lender and obtain a lower interest rate and other repayment conditions.

    You may consolidate your federal student loans to acquire a new servicer and obtain a longer repayment term that lowers your payment but raises overall interest.

  3. Can I switch my student loan from private to federal?

    You can't sell private loans to the government, but refinancing may help you get what you want.

    Refinancing can convert federal student loans into private loans.