Can I Refinance My Student Loans More Than Once? Should I?

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Flickr user Brandon Menth

Yes, you can refinance your student loans more than once.

But then that begs the question: Should you? That depends on your reason for wanting to refinance more than once.

When Multiple Refinancing May Be a Good Idea

Choosing to refinance your refinanced loan is a good idea if the lending rates have gone down and you pay a lower interest rate on your new loan. Even a small drop in the interest rate will help you pay off your student debt faster. For this you must keep an eye on prevailing interest rates so you can get the benefit when the rates go down.

Another time when you may want to consider refinancing your refinanced loan is if your goals or financial situation have changed and you want to change your repayment terms. For example, let’s say you chose to make lower monthly payments when you refinanced the first time. If your monthly income has increased since then, refinancing a second time with higher monthly payments will help you pay off your loan faster. On the other hand, if you have other monetary commitments, you may want to refinance again to lower your monthly payments even more.

Are There Any Downsides to Multiple Refinancing?

The major downside to multiple refinancing is the effect it will have on your credit score. Credit inquiries will lower your credit score by a few points—though it’s a temporary measure. If you shop around for student loan refinancing, be sure to do it all at once, because multiple credit checks in a small amount of time will let the credit bureaus know you’re shopping around.

Another downside is the time and effort that goes into keeping tabs of interest rates, applying to multiple lenders and comparing rates, and then setting up the new payments.

So make certain that refinancing again will truly be beneficial before you put in the effort of going through the process again.

College Raptor Staff

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