Specializing in Delinquent and Defaulted Student Loans
We Help Bad Credit Student Loan Borrowers Refinance
Bad credit can feel like a heavy financial burden to carry. Your credit impacts everything from obtaining a new private student loan to refinancing a current one, but it doesn't have to prevent you from taking control of your financial future.
3-Minute rate check without credit impact
Get monthly payments that fit your budget
Save thousands with your refinance
3-Minute rate check without credit impact
Get monthly payments that fit your budget
Save thousands with your refinance
Reasons Why Bad Credit Refinancing
with Yrefy Makes Sense
Get a low fixed interest rate
We specialize in working with borrowers with bad or no credit, and we can get you a low, fixed interest rate between 0.1 - 5.99%. We have helped thousands of borrowers with bad credit, and we can help you to.
Pay off your loan faster
With a lower fixed interest rate and better loan terms, you can pay off your student loan faster with Yrefy. We have helped thousands of borrowers successfully secure a lower fixed rate to pay off their loans faster.
Get lower monthly payments
Borrowers we worked with who had a high interest rate came to Yrefy to get a lower fixed rate and reduce their monthly payments. We helped them secure a better rate, lower payments, and save thousand's off the life of their loan, even with bad credit scores below 650.
Simplify your finances
Even if you have bad credit, we can help you consolidate your loans into one single, lower, and manageable monthly payment. No more tracking different lenders, due dates, or variable payments. With one loan, you will be able to budget and manage your finances more easily.
See if you qualify for refinancing
Apply for student loan refinancing
What Can You Do With the Extra Savings?
At Yrefy we specialize in working with borrowers who have bad credit or no credit to help them refinance their student loans into a lower interest rate and lower monthly payments. When other lenders turn you away for having a sub-credit score of 650, we can help you secure a better interest rate with better terms. Consider what you can do with the extra savings when you refinance with Yrefy.
Buy a House
Many of the borrowers who have come to Yrefy had bad credit, but were able to secure a better interest rate and loan terms, enabling them to rebuild their credit and buy a home with a lower debt-to-income ratio.
Buy a Car
With the extra savings from your refinance, you can potentially buy a new car. We have past borrowers save enough off their monthly payments to purchase a new car.
Start a Family
Many bad-credit borrowers with high interest rates typically also have high monthly student loan payments. In a recent Yrefy survey, 70.6% of our subscribers reported that financial stress prevents them from planning for the future and typically starting a family. Learn more
Pay Off Your Credit Cards
High student loan payments can prevent you from paying off other high-interest debts like credit cards. By securing a low fixed interest rate of 0.1 - 5.99% with Yrefy and obtaining a lower monthly payment, you can apply the extra savings to help pay off your credit cards.
How Refinancing with Bad Credit Works at Yrefy
Four simple steps to transform your student loan debt into a manageable financial plan and help you plan for the future.
Call us or apply online
You can fill out our simple form online or call us to start the process. Our goal is to provide you with an easy solution to get started.
Speak with a specialist
Every borrower gets their own dedicated loan specialist to help guide you through the refinancing process.
Start qualification
Getting started with the qualification process is simple and we are here with you every step of the way.
Get out of debt
With a lower fixed interest rate, you will have a lower monthly payment and loan terms to help you get out of debt faster.
Talk to a Person
Bad Credit, Low Credit? No Problem
We specialize in working with defaulted and delinquent student loan debt. We are one of the only financial institutions that can help bad credit borrowers. Unlike traditional lenders that require you to have a 650 FICO score or higher to refinance your private student loans, Yrefy does not use your credit score to determine eligibility for refinancing.
Bad or no credit
Our specialty is working with borrowers that are in financial trouble and have defaulted or are delinquent with their current private student loans.
Income-based payment plans
Our income-based private student loans are designed to help you get monthly payments that are affordable and manageable.
Co-borrower release
Making on-time payments can get your co-borrower released from the loan.
Why Choose Yrefy?
Not all lenders approach bad-credit borrowers the same way. Traditional lenders — banks, credit unions, and most large refinancing companies — typically have strict credit score thresholds and may decline applicants outright if their credit falls below a certain level.
Yrefy was built specifically for borrowers in difficult financial situations, including those with defaulted or delinquent private student loans. Here's how the two approaches compare:
| Yrefy | Traditional Lenders | |
|---|---|---|
| Target Borrower | Defaulted or delinquent private loans; low/bad credit | Generally requires good to excellent credit (670+) |
| Credit Check | Soft inquiry to explore options; focused on full financial picture | Hard inquiry; score heavily weighted in approval decision |
| Minimum Credit Score | No set minimum — bad credit borrowers considered | Typically 650–700+ required to qualify |
| Rate Type | Fixed rate | Fixed or variable |
| Cosigner Option | Yes! Co-borrower release available after qualifying payments | Yes — often required for low-credit applicants |
| Repayment Plans | Custom repayment plans tailored to borrower | Standard plans determined by lender terms |
| Defaulted Loans | Yes — specializes in defaulted/delinquent private loans | Rarely accepted; usually requires loans in good standing |
| Federal Loan Refinancing | Private loans only | Private loans; some accept federal (converts to private) |
If you have bad credit, a defaulted loan, or a complicated financial history, traditional lenders may not be an option at all. Yrefy's model is designed for exactly these situations.
Refinancing FAQs to Consider
What are the challenges and credit impact?
Refinancing a loan with bad credit isn't easy, but understanding why is a key step in navigating the process.
A credit score is like a financial report card — it's often the first thing a lender reviews. Missed or late payments, defaults, collections, or high credit utilization can lower a credit score and indicate higher risk. With higher apparent risk can come less favorable loan terms: higher interest rates, a required co-signer, or even outright denial.
Even applying for a refinance can temporarily lower your credit score. When you apply, a lender may conduct either a soft or hard credit inquiry:
- Soft inquiry: Allows the lender to review basic credit information without typically affecting your score.
- Hard inquiry: Provides a full credit report and can cause a small, temporary score drop, signaling to lenders that you may be taking on new debt.
Many lenders recognize that credit scores don't tell the whole story. Responsible financial behavior — consistent payments, reducing debt, and stable income — can help offset a lower score over time.
What do traditional lenders typically evaluate for refinancing?
When reviewing a refinancing application, traditional private lenders consider a borrower's full financial profile. Understanding their criteria can help you prepare — or identify when an alternative lender like Yrefy is a better fit:
- Credit Score: Borrowers with higher credit scores may qualify for lower interest rates. A score of 670–739 is generally considered good by most traditional lenders.
- Income and Career Stability: A record of stable monthly income demonstrates the ability to consistently repay loans.
- Debt-to-Income Ratio (DTI): Lenders review how much of a borrower's monthly income goes toward debt. A lower DTI indicates a stronger ability to meet repayment obligations.
If a borrower doesn't meet these thresholds, many traditional lenders will require a co-signer — typically a family member or close friend who shares the legal obligation to repay the loan. Co-signers can sometimes be released after a series of successful on-time payments.
What to do before refinancing with bad credit?
Even with low credit, there are steps you can take to improve your chances of qualifying — regardless of whether you pursue Yrefy or a traditional lender. The goal is to show financial forward motion:
- Review Your Credit Report: Correct any errors or outdated information. Even a small correction could improve your score.
- Build Payment Consistency: Make on-time (or early) payments on all current bills — utilities, car loans, rent, and credit cards. Small improvements in payment history demonstrate reliability.
- Consider a Co-Signer: If qualifying on your own is difficult, a co-signer with a stronger credit score can improve your chances. Make sure the co-signer fully understands their obligations before moving forward.
- Win Small Credit Victories: Pay off a smaller loan entirely. Closing out a loan on your credit report can have a strong positive impact and lowers your DTI ratio.
How does a recent bankruptcy filing work with refinancing a student loan?
If you have undergone bankruptcy or are considering it, there are impacts to understand regarding how it affects your ability to refinance student loans.
Chapter 7 Bankruptcy
Chapter 7 allows an individual to discharge many types of unsecured debt such as credit card debt and medical bills. However, federal and private student loans are not typically discharged, meaning they remain an active obligation. Chapter 7 typically remains on a credit report for ten years from the filing date, which can make qualifying with traditional lenders very difficult during that window. Yrefy works with borrowers who have complicated credit histories, including past bankruptcies.
Chapter 13 Bankruptcy
Chapter 13 establishes a court-approved structured repayment plan over three to five years. Student loans can be included in this plan. Chapter 13 typically remains on a credit report for seven years from the filing date, but successful completion of the repayment plan can have a positive impact over time.
The 7-Year Rule
Generally, most negative records on a credit report remain for up to seven years. After this period, they typically fall off, which can meaningfully improve your credit score and expand your refinancing options with both traditional and specialty lenders.
Can I refinance my federal & private student loans?
Yes, you can refinance both federal and private student loans, though Yrefy only offers refinancing for private student loans. We can consolidate all your private student loans into one low-interest-rate loan. Even with bad credit, we can refinance your private student loans since your credit score is not a determining factor at Yrefy.
How do I rebuild my credit after student loan default or delinquency?
Rebuilding Credit from 500 to 700+
Rebuilding your credit score takes time, but it's a critical effort toward a stronger financial future — and toward qualifying for better refinancing terms down the road. Here are the most impactful actions you can take right now:
- Pay Bills On Time: This has the single biggest impact on your credit score. Consider auto-pay if you struggle to remember due dates.
- Lower Credit Utilization: Try to keep overall credit card usage below 30%. High utilization negatively affects your score.
- Avoid Hard Inquiries: Hard credit checks temporarily lower your score. Stick to soft checks until your score is in better shape.
- Lower Debt: Pay off loans whenever possible — whether targeting the highest interest rates first or knocking out smaller balances to remove them from your credit report entirely.
Rebuilding from 500 to 700+ takes time, but practicing responsible credit habits and reducing overall debt will get you there. These actions not only raise your score — they expand your refinancing and consolidation options with a wider range of lenders.
Bad credit shouldn't stop you
from getting financial relief.
We work with borrowers of all credit backgrounds to find flexible
refinancing solutions with affordable monthly payments.
Talk to a Person
Refinancing Options We Offer
Bad Credit
We specialize in default and delinquent student loans. Learn more about how Yrefy works and what makes us unique.
Consolidation
We can help you consolidate multiple private student loans into one loan with a low fixed interest rate.
No Cosigner
We offer no cosigner private student loan refinancing options with low fixed rates.
Undergraduate
There are many undergraduate private student loans we help refinance and get you a lower rate.
Graduate
Graduate schools student loans can be expensive especially for business or medical school.