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Should You Refinance Your Student Loans?

Words by Abbie Dyer on Dec 21, 2021 1:57:21 PM

Investing in your education, your future, and your dreams is always a smart choice. If you have student loans, maybe now it’s time to consider another smart option to help you pay them back. Refinancing your student loans could be a great option to help you save a little more each month.1 Learn more about what it means to refinance to decide if this is the right financial move for you.

Think of refinancing as a rewrite of your current loan(s). You’ll need to apply for a refinance2, just like you had to apply for your original student loans. Our partners at CU Student Choice will then look at the amount you currently owe on your student loans and see if you qualify for a lower interest rate or a new loan term (the amount of time you have to pay back a loan). If you have loans with multiple lenders, you may be able to combine all of these loans into one easy monthly payment when you refinance. After you close your refinanced loan, you’ll make your payments with us and CU Student Choice.

For a limited time, you could get $200 back3 after you close on your student loan refinance. Another $50 will be donated to the Lake Trust Foundation to provide college and trade school scholarships for students in Michigan.3 And you'll have no payments for three months.4 Visit to see program details or to apply.

Here are a few reasons you should consider refinancing your student loans today.

You could lower your monthly payment.

Interest rates are always changing, so you may qualify for a lower rate than you did when you originally took out your loan. And getting a lower interest rate could lower your monthly student loan payment and help you save money over the life of your loan.1 You can use a student loan refinance calculator2 to see how your payment amount might change with a new interest rate on either a fixed- or variable-rate loan. You’ll also get a better idea of how much you can save over the life of your loan by refinancing. An interest rate decrease of even one percent can make a big impact!

Extending your loan term when you refinance could also help you get a lower monthly payment. Just keep in mind that you may pay more money in interest over the life of your loan if you extend your loan term.

You could save and can give back too.

For a limited time, you’ll have no payments for 3 months and get $200 back after you refinance your student loans with us and our partners at CU Student Choice.3,4 And after you close your loan, an additional $50 will be donated to the Lake Trust Foundation to help provide scholarships for Michigan students.3 Let’s work together to make an impact and create more opportunities. For you. For your future. And for potential students.

You may be able to save and make one payment.

When you refinance your loans, you may have the opportunity to consolidate multiple loans into one monthly payment. So instead of trying to remember to make multiple payments to multiple lenders, you’ll only have to make one easy payment. This is an especially great option if you can get a lower interest rate.

You want your loans in your name.

If you didn’t have a lot of credit history when you took out your student loans, you may have needed a parent or other relative to sign on the loan with you as a co-borrower. Or your parents may have taken out a Federal Parent PLUS loan in their own name to help you pay for school.

Now that you’re done with school, you may want to refinance your student loans (if there is no co-borrower release option) so your loans are only in your name. By doing this, your loan payments will count toward your credit history. Making full, on-time payments can help increase your credit score, which may make it easier to get other types of loans in the future.

Other factors to consider. 

The CARES (Coronavirus Aid, Relief, and Economic Security) Act that passed in March 2020 set a pause on federal student loan payments and interest for millions of borrowers. This pause in payments is set to expire after May 1, 2022, meaning that you’ll resume your payments after this date if you have federal loans. Before refinancing your federal student loans, it’s important to understand the benefits that these loans offer. You can visit or CU Student Choice’s website2 for more information.

Ready to get started?

College can open the door to new possibilities. Helping you achieve your dreams. And find a new passion. But the price of paying back college expenses can make it difficult to achieve your other goals. Refinancing your student loans may help you achieve these goals sooner. Let’s work together.

SEE ALSO: 7 Easy Ideas To Help You Reach Your Savings Goals Factors That Affect Your Credit Score


This post was previously published on December 21, 2021 and then updated on April 1, 2022 to reflect new promotion information and details about the federal government's decision to extend the pause on federal student loan payments. 


1IMPORTANT NOTICE: Federal loans offer certain benefits and protections that do not transfer to a private loan. By refinancing federal student loans, you may lose certain borrower benefits from your original loans. These may include interest rate discounts, principal rebates, or some cancellation benefits that can significantly reduce the cost of repaying your loans. All loans subject to credit qualification and additional criteria, including graduating from an approved school. You may qualify for a Federal Direct Consolidation Loan. For additional information about a consolidation option for federal loans, contact the Department of Education at See for more details.


NOTE: The federal government has waived interest and suspended federal student loan payments. With these provisions, you should carefully consider your options for refinancing any federal student loans at this time. For the latest information, visit 


2Third party website. Lake Trust Credit Union is not responsible for the content, availability, security or compliance of any linked third party websites. In addition, the site's privacy policies may differ from those of Lake Trust.


3To qualify, the loan application must be started between 4/01/2022 and 5/31/2022. Upon approval and disbursement of your refinance loan, the primary borrower will receive a cash deposit of $200 and another $50 will go to benefit scholarships for Michigan students. The $200 will be awarded in the form of a deposit to your Lake Trust Membership Savings Account within 90 business days from the funding date of the loan. The primary borrower must be a credit union member in good standing at the time of deposit. Limit one cash award per borrower. The credit union reserves the right to modify the terms of this offer at any point in the future for new applications. 


4To qualify, the loan application must be started between 11/19/2021 and 8/19/2022 and the selected repayment term must be 10 years or less. Upon disbursement of your refinance loan, no payments will be required and no interest will accrue during a three-month promotional period. After this three-month promotional period ends, this loan requires full payments of principal and interest. The credit union reserves the right to modify the terms of this offer at any point in the future for new applications.



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