Student Loan Refinance Calculator: Interest Saved vs Protections Lost
A lower rate can save thousands in interest — but refinancing federal loans to a private lender permanently gives up income-driven repayment, PSLF, and federal forbearance. See the dollar savings, then weigh what you'd forfeit. Math runs locally.
The interest is the easy part. The protections are the catch.
Dropping a $35,000 balance from 6.5% to 4.5% over the same 10 years saves about $35/month and roughly $3,800 in total interest. That's real money — but for federal loans it comes at a price the calculator can't put a dollar on. Refinancing federal loans to a private lender is permanent and irreversible, and it forfeits income-driven repayment (which caps payments at 10-20% of discretionary income), Public Service Loan Forgiveness, the generous federal forbearance that paused payments interest-free during 2020-2023, and any future federal forgiveness.
The rule of thumb: refinancing private loans for a lower rate is close to a no-brainer when you qualify. Refinancing federal loans only makes sense if you have stable, high income, a solid emergency fund, and zero intention of using IDR or PSLF — because once you do it, those doors close for good.
How the math works
- Current payment = standard amortization of the balance at your current rate over the years left.
- Refinanced payment = amortization of the same balance at the new rate over the new term.
- Lifetime savings = remaining interest on the current loan − interest on the refinanced loan. Student-loan refis typically have no origination fee.
- A longer new term lowers the monthly payment but can increase total interest — keep the term at or below your years left to protect the savings.
Source: Federal Student Aid (IDR, forbearance, PSLF terms) and CFPB guidance on refinancing student loans.
Math runs locally. Inputs never leave your browser. Source on github.
Where this doesn't apply
- You're pursuing PSLF. If you work in public service and are counting payments toward forgiveness, refinancing federal loans throws away that entire progress. The interest saved is irrelevant against a full balance wiped out.
- Your income is variable or low. IDR plans cap federal payments at a share of income and can drop them to $0 in a bad year. A private loan has no such floor — the payment is the payment.
- You'd refinance to a variable rate. This models a fixed rate. A teaser variable rate can rise above your current fixed federal rate later.
- These are already private loans. Then there are no federal protections to lose, and the decision collapses to the pure interest math above — refinance whenever you can clear the rate.
What to actually do
- Separate federal from private loans — only the private ones are usually safe to refinance freely.
- For federal loans, ask: am I sure I'll never need IDR, forbearance, or PSLF? If there's real doubt, keep them federal.
- Get rate quotes (soft pull) from several lenders; refinancing rarely makes sense for less than a ~1-point drop.
- Keep the new term at or below your years left so a lower payment doesn't quietly raise total interest.
- If the goal is just paying less interest faster, compare against making extra payments on the current loan (the Loan Payoff tool).