Be wary of refinancing federal student loans - by doing so, you'll lose access to government protections like income-driven repayment plans, student loan forgiveness programs and deferment and forbearance.

While refinancing student loans is an option that helps thousands of borrowers save money on their monthly payments, it's certainly not for everyone. Make sure you double-check the payment protections you would have under a private lender for any worst-case scenarios, such as losing your job.

You should refinance private student loans if you qualify for a better interest rate. Refinance lenders don't typically charge upfront costs, so a lower rate can allow you to pay less each month, save on interest or both.

Consider refinancing your student loans if:

1. You have private student loans. Payments on federal student loans are paused and interest rates are set to zero percent until summer 2023.
2. Your finances are rock solid. It's best to refinance if you have a stable income.
3. You would save money.
4. You can qualify.

Depending on the type of refinance you get, your new loan could end up costing you more money in the long run than if you'd just stuck with your original loan. This can happen when you extend your loan term, because you're lengthening the amount of time you'll spend paying interest.

While refinancing can sometimes result in a lower interest rate or a shorter repayment term, it cuts off the borrower's access to government benefits like loan forgiveness, forbearance, emergency relief, and income-driven repayment.

Refinancing to Secure a Lower Interest Rate Historically, the rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 2%. However, many lenders say 1% savings is enough of an incentive to refinance. Using a mortgage calculator is a good resource to budget some of the costs.

Refinancing will hurt your credit score a bit initially, but might actually help in the long run. Refinancing can significantly lower your debt amount and/or your monthly payment, and lenders like to see both of those. Your score will typically dip a few points, but it can bounce back within a few months.

Private student loans, on the other hand, have a statute of limitations of anywhere from three to 10 years. After this, they become time-barred. The exact time frame depends on your state of residence.

Yes, Credible is a legitimate company founded in 2012. Credible initially began as a marketplace for student loan refinancing. Credible's lending marketplace has been in operation since 2014 and has an A+ rating from the Better Business Bureau.

Mortgage refinancing is not always the best idea, even when mortgage rates are low and friends and colleagues are talking about who snagged the lowest interest rate. This is because refinancing a mortgage can be time-consuming, expensive at closing, and will result in the lender pulling your credit score.

Refinancing your personal loan, in the right situation, can be a great way to pay off your debt and save money. Saving money by refinancing high-interest debt into lower-interest debt is often one of the main reasons people get personal loans in the first place.