Should You Refinance Navient Student Loans? Pros and Cons of Refinancing With NaviRefi and Other Lenders

If you have student loans with Navient, you might be surprised one day soon to get a little envelope from a company called NaviRefi in the mail.

Sadly, it’s not as exciting as finding a Golden Ticket. Instead, you may be eligible to refinance your Navient student loans with NaviRefi for a cheaper interest rate and lower monthly payment.

Refinancing your student loans can be a great way to save money. But before signing on the dotted line, there are details you should know. We’ll walk you through the factors to help you decide if refinancing your Navient student loans with NaviRefi — or any lender at all — is right for you.

What is NaviRefi?

Most people are familiar with Navient as a student loan servicer. And, indeed, since the company began operating as a separate entity from Sallie Mae, that's been most of its business. But Navient also owns several other companies that deal with various aspects of student loans, including student loan refinancing.

Navient already owns Earnest, another student loan refinance company. However, it also recently created NaviRefi, a new refinance brand.

Refinanced loans under NaviRefi are actually made through Earnest. “NaviRefi” is simply a brand label that they use, but you’re essentially getting an Earnest refinancing loan.

Once your loan is refinanced through NaviRefi, the loan goes back to Navient for loan servicing. So, you’ll still end up working with Navient either way to repay your loans.

The only thing that’s different is that the Navient parent company will own your loans now, not whoever owned your loans before. For example, if you were working with Navient to pay off a federal student loan, the federal government will no longer own your loan.

What to consider before refinancing your student loans

First and foremost, NaviRefi is a private student loan lender. You can refinance your existing federal and private student loans with NaviRefi. But weigh this decision carefully, especially if you’re considering refinancing federal student loans.

As soon as you refinance federal student loans, they become private student loans. And private lenders simply can't match all the protections, forgiveness, and student loan repayment options provided by the Department of Education. For example, if you’re trying to get Public Service Loan Forgiveness, avoid refinancing because this program isn’t available for private student loans.

If you have federal student loans, our rule of thumb is to consider refinancing once you meet these conditions:

1. You’re employed in the private sector.
2. You have a solid emergency fund.
3. The total amount you owe is less than 1.5 times your annual income.

For example, let’s say you’re working as a software engineer for a private company making $100,000 per year. If you owe $75,000 in federal student loans, now would be a good time to consider refinancing because you owe less than 1.5-times your annual income (which would be $150,000 in this case).

In this financial situation, it’s unlikely you’ll need those handy protections that federal student loans offer. You’ll gain more by refinancing your loans.

Nitty gritty details: Refinancing student loans with NaviRefi

Here are the basic details you need to know to make an educated decision about whether it’s a good idea to refinance your student loans with NaviRefi.

Interest rates

The specific interest rate that you're offered from NaviRefi will depend heavily on your credit score and other factors. However, all borrowers can lower their interest rate by 0.25% by signing up for autopay. This is pretty standard for most private student loan lenders.

Fees

NaviRefi doesn’t charge origination fees for your loan refinance. It also doesn’t charge any fees for paying off your loan early.

There may be other fees that could drive up your loan cost, such as late payment fees, but these aren’t listed on its site.

Student loan refinance amounts

NaviRefi can refinance both federal and private student loans between $5,001 to $150,000.

If you went to a professional school (medical, dental, veterinary, or pharmacy school), you can refinance loans between $5,001 to $250,000.

Term length

NaviRefi offers a solid mix of student loan repayment options. You can refinance your loan term for anywhere between five to 20 years. This gives borrowers a lot of flexibility to pick a monthly payment that fits their budget.

If minimizing loan cost is your top priority, know that the best interest rates are usually offered to borrowers who choose the shortest terms. But a shorter term also means a higher monthly payment. Aim to pick a term that will offer you the best interest rate at a monthly payment that you can afford.

The only exception to the repayment options listed above is for borrowers who live in Kentucky. NaviRefi only allows Kentucky residents to refinance loans for up to 10 years if your student loans are $15,000 or less.

Who can refinance Navient student loans?

NaviRefi is pretty exclusive in that it’s offered to existing Navient customers by invitation only. This list includes borrowers who have private loans with Navient, as well as borrowers whose federal loans are serviced by Navient.

If you haven't gotten a letter in the mail from NaviRefi, you may still be able to refinance your Navient student loans with another one of the top refinancing lenders. But if you have received an invitation to apply to refinance Navient student loans with NaviRefi, you’ll need to meet these additional requirements:

• You must be a U.S. citizen or permanent resident.
• You must live in an eligible state. NaviRefi is currently not available in California or Nevada.
• You also must have attended a school that receives Title IV federal student aid. You’re not required to have graduated from the school, but you must have received your loans from attending an eligible school.
• You must be employed or have at least some other source of income. If you’re a stay-at-home spouse, for example, you can list your spouse’s income. And if you’re self-employed, you’ll just need to provide proof income (e.g., a 1099 tax form).

How to get approved to refinance Navient student loans

Borrower eligibility criteria for refinancing Navient student loans will vary based on the lender that you apply with. In the case of NaviRefi, here's what you'll need to be considered for approval:

• You must be a U.S. citizen or permanent resident.
• You must live in an eligible state. NaviRefi is currently not available in California, Delaware or Nevada.
• You also must have attended a school that receives Title IV federal student aid. You’re not required to have graduated from the school, but you must have received your loans from attending an eligible school.
• You must be employed or have at least some other source of income. If you’re a stay-at-home spouse, for example, you can list your spouse’s income.

Pros of refinancing with NaviRefi

Checking your interest rate and even completing the application are lightning fast. In fact, the company claims it only takes three minutes for you to complete an application. That’s probably because the company already has most of your information since you have existing Navient loans. All it has to do is pull some extra information, like your credit score and history.

Another benefit is that you can refinance federal and private loans together. That’s not uncommon among student loan refinancing companies. But it’s still worth noting as this isn't possible with a federal Direct Consolidation Loan.  

Although it’s not guaranteed, you may be able to access up to 12 months of forbearance depending on your financial situation. But this is determined on a case-by-case basis.

NaviRefi also offers 16 repayment options with annual terms of five to 20 years. This makes it easier for borrowers to match their monthly payment to their budget.

Finally, Navient does offer a student loan discharge in case of death or disability. If you can’t make your payments because you’ve passed away or are permanently and completely incapacitated, Navient will release the loan. You might think that’d be standard, but it’s an uncommon benefit among student loan servicers.

Cons of refinancing with NaviRefi

There are several factors to consider that might sway you away from NaviRefi, even if you do get this offer.

NaviRefi isn’t available in all states. Residents of California and Nevada are just plain out of luck. Even if you do live in a state where NaviRefi offers refinancing, you may not get the full suite of options advertised on its website.

Variable interest rate loans from NaviRefi aren't available if you live in:

• Alaska
• Colorado
• Connecticut
• Hawaii
• Illinois
• Kentucky
• Massachusetts
• Minnesota
• Mississippi
• New Hampshire
• Ohio
• Oklahoma
• Tennessee
• Texas
• Virginia

If you live in one of these states, your only option is a fixed-rate loan.

Residents of Kentucky also can’t refinance their loans for more than 10 years if they owe less than $15,000.

Additionally, NaviRefi doesn’t offer:

• The ability to use a cosigner if you have bad credit
• The option to refinance your parents’ PLUS loans along with your own loans

This also points to another disadvantage of refinancing your student loans with NaviRefi — Navient’s reputation is just plain bad. It’s consistently rated as one of the worst student loan servicers. If you’re looking to avoid working with Navient, consider avoiding NaviRefi because your student loans will end up right back with Navient again.

That said, this reputation is primarily due to Navient’s handling of federal student loans, not a private refinancing product that would be limited to borrowers with higher-than-average credit scores.

Consider other lenders when you refinance Navient student loans

Just because you get an offer in the mail inviting you to NaviRefi doesn’t mean you should do it. It may turn out that another lender is able to offer you a lower interest rate, benefits or terms. Shop around for the best refinancing offer so you get the most value.

You can fill out the application that NaviRefi sends you since it’s just a rate check, not a complete application. You have to accept the terms before it’s final. Then repeat this process and check your interest rates with other companies to see which one gives you the best offer.

By comparing multiple lenders, you can be assured you’ll get the best refinancing deal possible. This process helps keep more money in your pocket and can enable you to pay off your student loans even faster.