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Many students rack up debt in the course of obtaining a college degree. If you’re struggling to keep up with your student loan payments, you may be wondering whether it pays to refinance that debt.

How does refinancing work?

When you refinance a loan, you effectively swap one loan for another. Your new loan, however, should come with more favorable terms than your old one -- namely, a lower interest rate that lowers your monthly payments in turn.

In some cases, refinancing a loan will extend its repayment period, though that won’t always happen. That’s a good thing and a bad thing, because while having more time to repay your loans could lower your monthly payments, thereby making them more manageable, it also means you’re carrying that debt longer.

So should you refinance your student loans? In some cases, it’s a smart move. But here are a few situations where it doesn’t make sense.

1. You're already paying a low interest rate on your loans

One good reason to refinance any sort of debt is to snag a lower interest rate on your remaining balance. But if your interest rate is already fairly low, you don’t stand to gain much by refinancing.

If you took out federal loans for college, then you’re already paying a relatively low interest rate, because federal loan interest is regulated and capped. As such, refinancing may not pay (though in some cases, you can snag a lower interest rate even on a federal loan). On the other hand, if you borrowed privately for college and got stuck with a high interest rate as a result, refinancing could save you some money.

2. Your credit is poor

The higher your credit score, the more likely you are to get approved for a new loan at a competitive rate. If your credit is in the dumps, however, then refinancing may not make sense, because chances are, you won’t be eligible for a low enough rate to make it worth your while.

What's considered a bad credit score? Credit scores range from 300 to 850, but anything below 620 is pretty poor. If your credit score isn’t great, it pays to work on boosting it before applying to refinance your student loans. You can raise your score by paying your bills on time consistently, and also by paying off a chunk of your existing credit card debt.

3. Your loans are almost paid off

Though it is possible to refinance a loan without incurring any costs, often you’ll pay a fee to refinance. Therefore, if your student loans are close to being paid off, the savings you’ll reap by lowering your interest rate could be wiped out by the fees you’ll incur in the process of refinancing.

Furthermore, in some cases, refinancing could end up extending the life of your loan. Now, when you’re looking at eight more years of payments, pushing that schedule up to 10 years may not seem like such a big deal. But if you only have a year of payments left, there’s little sense in extending that timeline when you can already see the light at the end of the tunnel.

If you’re stuck with a ridiculously high interest rate, or have built your credit to the point where your score is now excellent, then refinancing your student debt could make sense. Similarly, if your current loans have a variable interest rate (which is often the case with private loans), then it could pay to refinance to an interest rate that’s not only lower than what you’re currently paying, but that’s fixed as well. But if the above scenarios apply to you, refinancing is a move you could wind up regretting.