30-Year Student Loan Refinance: Extended Repayment Term Options

Federal student loans offer extended repayment plans, letting you repay your loans over 20 to 25 years — and, in some cases, 30 years. Considering that many borrowers carry huge six-figure student loan debt balances equal to a mortgage, you might wonder whether you can get a 30-year student loan refinance, too.

Unfortunately, you won’t find private student loans that offer a 30-year student loan refinance. Most private lenders offer student loan refinancing terms with a maximum of 20 years. But a few select lenders provide for an extended loan term for 25 years.

Here’s what you need to know about refinancing to an extended loan term beyond the standard 10 years.

Refinancing lenders that offer extended loan terms

Even if your mind is set on a 30-year student loan refinance, a 25-year term can be just as helpful at lowering your monthly payments. The bad news is that although these extended loans exist, they’re very limited.

The majority of student loan refinancing lenders have repayment options ranging from five to 20 years. However, there are a couple of lenders that allow for an extended 25-year term under certain conditions.

For example, Splash Financial works with a network of partner lenders to offer a variety of refinance interest rates and loan terms. Its fixed interest rate loans only go up to 20 years. But you might be able to secure a 25-year term if you’re willing to choose a variable-rate loan.

Additionally, U-fi from Nelnet offers a 25-year refinancing loan with variable interest rates.

Otherwise, your search for an extended loan term is going to be limited to 10- to 20-year refinancing loans.

Related: Splash Financial Review: How It Compares

Refinancing in action: 10-year vs. 25-year term

Just because you can refinance to an extended term doesn’t necessarily mean you should. A longer term generally means you’ll pay more in interest charges. When you’re considering a 25-year term, the additional interest really adds up.

Here’s a refinancing example that compares a 10-year term versus 25-year term.

Let’s say you want to refinance $100,000 in private student loans. For a straightforward comparison, let’s say you have the option to refinance at 3% for either 10 years or 25 years. Note that the length of the term will typically impact the interest rates that are offered.

With a 10-year refinance, your monthly payment will be $966. You’ll pay a total of $115,873 when all is said and done, meaning you’ll pay $15,873 in interest over the life of the loan.

In contrast, if you go with the 25-year refinance, you’ll drop your payment to $474 per month. That frees up just shy of $500 a month for other financial concerns or goals. However, you’ll pay substantially more over the life of the loan.

With the 25-year loan, you’ll pay $42,263 in interest, which means you’ll pay almost half as much in interest as what you originally borrowed. Your grand total will be $142,263.

An extended loan term always means you’ll pay more in interest charges overall. Always weigh your reasoning for wanting an extended repayment term.

If you legitimately can’t afford a higher monthly payment or have a specific financial goal in mind (e.g. saving for a home), then it might be worth securing the lowest payment.

However, there are a variety of terms to choose from some of the best student loan refinance companies. You might find a happy medium that offers a lower monthly payment without signing up for huge interest charges.

Use the Student Loan Planner Refinance Calculator to see how term length affects your monthly payment and interest costs.

Pros and cons of refinancing to the longest student loan term

Now that we’ve explored options and scenarios for the longest student loan term, let’s look at the pros and cons of an extended repayment term.

Pros

• Your monthly student loan payment is more affordable.
• You might lower your interest rate compared to your current loan rate.
• It could improve your credit history if you’re struggling to make your existing payments.

Cons

• You’ll pay more over the loan term due to interest accruing for a longer period.
• You might not get the lowest annual percentage rate (APR). Short-term refinancing loans (e.g. five to 10 years) typically have better offers.
• You’re limited to a variable rate loan if you want a 25-year term.
• You might not qualify for an extended repayment term depending on your loan balance and lender requirements (e.g. minimum credit score, minimum income, creditworthy cosigner, etc.).

Final thoughts for borrowers wanting a 30-year student loan refinance term

An extended loan term can reduce your loan payments, which might be needed depending on your existing budget and financial goals. The trade-off is you’ll pay more (probably a lot more) over the life of your private loans.

Realistically, a 20-year term isn’t dramatically different from a 25- or 30-year student loan refinance term when considering the monthly payment. But the shorter term could save you significantly more in interest fees. It’ll also give you more flexibility in choosing a fixed interest rate versus a 25-year term that requires a variable rate.

The right refinancing term depends on your unique situation. A shorter student loan term saves you money in the long-run and can offer lower interest rates.

Before moving forward with the longest student loan term for the sake of a lower monthly payment, be realistic about your finances. Have an honest conversation about why you’re considering an extended repayment term in the first place.