Is there such a thing as partial student loan refinance? If there is, should you do it? Why would anyone want to refinance only part of their student loans? How does it help? These are some of the questions we answer in this article.

Is There Such A Thing As Partial Student Loan Refinance?

Yes, there is such a thing as partial student loan refinance. It involves refinancing only some of your student loans instead of your entire student debt.

When you refinance, the lender pays off your current loans and replaces them with a new loan. The new loan has different terms and a different interest rate too.

If you have several student loans, partial student refinance is straightforward. In this case, you just choose the individual loans you want to refinance. Depending on your repayment goals, these may be the ones with the highest interest rates or with the largest balances.

You can even partially refinance if you have a single student loan. This can be done by asking the new lender to pay off only a portion of the balance instead of the entire debt. This is known as ‘underpayment’.

When To Consider Partial Student Loan Refinance

Students choose to refinance for a variety of reasons. Some refinance because their higher credit score qualifies them for lower interest rates. Others refinance to increase their monthly payments and still others to lower their monthly payments. Another reason may be to release a cosigner from a loan. Regardless of the reason, you don’t have to refinance all your loans together unless you want to.

You may want to consider a partial student loan refinance under two circumstances.

1: You have a mix of federal and private student loans. You don’t stand to lose any benefits or protections when you refinance private loans. However, when you refinance federal student loans, you’ll lose protections such as income-repayment plans, forgiveness programs, and deferment and forbearance options. It’s advisable not to refinance federal student loans unless you’re absolutely certain you won’t need these benefits anytime in the future.

2: You don’t qualify for full refinancing. Most lenders have approval limits based on your credit score and other criteria. If you don’t meet their requirements for refinancing all your student loans, you may be approved for partial student loan refinance.

How to Partially Refinance Student Loans

Not all lenders offer this option, especially if you want to partially refinance a single student loan. The best way to start is to first check which lenders offer partial student loan refinance. Don’t make the mistake of applying to the first lender you come across that offers this option. Take time to compare the terms, conditions, and interest rates offered by each one. Check if they also charge origination fees. Comparing lenders will help you identify the lender offering the best deal on a partial student loan refinance.