Did you know that 680 is around the average credit score in America (according to VantageScore)? It’s considered a “good” score. 650 to 680 is also generally the minimum credit score requirement that most lenders set for refinancing student loans. So yes, you will be able to refinance student loans with a credit score of 680. But, it won’t be easy.

Challenges You Can Expect To Encounter With A Credit Score Of 680

A good credit score is just one of many other criteria that you’ll have to meet to refinance student loans. If the lender’s minimum credit score requirement is 680, you will only have passed one criterion. With a lower credit score, the lender will assess the other criteria even more stringently. They’ll check your payment history, income, and debt-to-income ratio. If any of these are the least bit spotty, they may reject your application.

Even if you do get approved, you’ll end up paying a high-interest rate with a credit score of 680. Lenders typically offer borrowers customized interest rates based on their credit score and other financials. A high credit score means you’re a responsible borrower. This will qualify you for a lower rate of interest. While a credit score of 680 may qualify you for refinancing, it won’t qualify you for a better interest rate.

Lastly, you may be limited in your choice of lenders as some may have higher credit score requirements.

Is It Worth Refinancing Student Loans With A Credit Score Of 680?

The main purpose of refinancing is to save money with a lower interest rate. If your score doesn’t qualify you for a lower rate, you may want to re-think your strategy. It may not be worth refinancing if you can’t get a rate that’s lower than what you’re currently paying. This is especially true if you’re planning on refinancing federal student loans.

The federal government doesn’t offer refinancing so you can only refinance with a private lender. When you do this, the loan becomes private and loses all federal loan protections. With a lower credit score, you may be better off keeping your federal student loans as is. This will protect your access to income-based repayments as well as generous deferment and forbearance options.

One Option To Get A Better Interest Rate

With a 680 score, you may not get the benefit of better rates when you refinance. However, you may be able to score a lower interest rate if you refinance with a cosigner who has a high credit score. In this case, the lender will quote a lower rate of interest-based on the cosigner’s high credit score.

Is it worth refinancing with a cosigner? Yes, absolutely. With the lower rate, you’ll save a lot in interest over the life of the loan. It also gives you time to work on improving your credit score. When your credit score is high enough to qualify you for a lower interest rate, you can release your cosigner.

Before refinancing with a cosigner, make sure you under the pros and cons of choosing this option. Also, make sure that the lender offers a cosigner release option.