For 10-year fixed-rate loans, the average student loan refinance rate rose slightly from the previous week to 4.16%, but 5-year variable-rate loan rates fell slightly to 3, 52%, according to Credible’s latest rates for the week ending March 28. That said, for those with credit scores of 780 and above, the average 10-year fixed rates are just 2.78%, while the average rate for those with scores below 680 is 4. 71%. Here are the lowest fares you could qualify for here.
Student loan refinancing is a way for borrowers to save money by essentially taking out a new loan to pay off their existing loan with a lower interest rate or more attractive terms. But while those low refi rates may be tempting, there are a few questions to ask yourself before you refinance your student loans.
The first is the type of loan you have. Indeed, just because you can get a lower interest rate doesn’t mean you should go ahead with a refinance, especially if you’re considering refinancing a federal loan into a private loan. The reason experts often advise against this practice is that federal loans offer borrowers unique protections like loan forgiveness and income-based repayment plans — two things borrowers will lose access to if they refinance their loans. federal loans. And once a borrower converts a federal loan into a private loan, there’s no turning back – you’re stuck with a private loan for the rest of time.
If, however, you have high-interest private student loans, refinancing can make a lot of sense, especially if you’ve recently improved your credit score or built up your credit application so you can take advantage of low rates that can save you a lot. sums of money each month. And if you’re able to take advantage of a shorter repayment term in the process, your monthly payment might go up, but you’ll pay off the loan sooner and end up saving more money in the long run. Here are the lowest fares you could qualify for here.
In short: it may be a good idea to consider refinancing your student loans if you are certain that your projected monthly savings will have an impact, or you may wish to shorten the term of your loan and lower your interest rate, particularly if you have private loans because you have less to lose in the protections department. But if you have federal loans and rely on income-based repayment options or are hoping to have your loans forgiven using public student loan forgiveness (PSLF), think carefully about refinancing and make sure that what you giving up is worth what you get in return.
Many people save thousands of dollars when refinancing student loans, but before you jump into the hassle of refinancing, you might want to ask yourself these 5 questions to make sure it’s the right decision for you.
*Prices correct at time of publication.