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According to Credible, average interest rates on refinanced student loans have risen across the board for the past two weeks. 5-year graduate refinance rates saw the biggest change, rising 66 basis points. All rates increased more than 2% from a year ago.
Rates have mostly increased since last year, and there is reason to believe that they will continue to increase in the future. For the 2022-23 school year, federal student loan rates will increase by the highest amount since 2005-06. These new rates won’t directly impact private student loan rates, but private rates may go up because they don’t have to stay so low to be on par with federal loan rates.
Variable 5-Year Student Loan Refinance Rates
5-year variable rate undergraduate student loan refinance rates rose 54 basis points last week and more than 2% from a year ago.
5-year variable graduate loan refinance rates increased 66 basis points.
Fixed 10-Year Student Loan Refinance Rates
10-year fixed undergraduate student loan refinance rates have increased slightly since last week. Undergraduate rates increased by 12 basis points, while graduate rates increased by 42 basis points. Rates on both loans are up more than 2% from a year ago.
Student loan interest rates by credit score
Your credit score has a significant impact on your rate. The higher your credit score, the higher your rate. Below, we’ve listed the 10-year fixed student loan rates by credit score:
How do I know if I will be approved to refinance my student loan?
Generally, the best barometer of loan approval is your credit score and history. Lenders like to see that you have a history of consistently repaying your loans on time, so the better your credit history, the more likely you are to qualify for a low rate. Also, most lenders will perform a soft credit check when you apply (which doesn’t affect your credit score), so you can find out from an individual lender if you’ll be approved without you. make of bad.
Fixed loan or variable loan
A fixed rate student loan has a fixed interest rate that remains the same throughout your loan. The rate you get when you take out your loan is the rate the lender will charge you until you repay your loan in full.
A variable rate loan has an interest rate that the lender will change periodically during the term of your loan. Lenders typically tie this rate to specific market benchmarks which are often impacted by the federal funds rate. Variable rates can start lower than fixed rates, but can climb higher over the life of your loan.
What is the difference between a 5 year loan and a 10 year loan?
If you want a better interest rate and are financially able to pay off your loan quickly, a 5-year loan could be a great choice. You’ll save money in interest and free up money to reach your other financial goals faster.
A 10-year loan term will cost you more overall, but you’ll make lower monthly payments. This can make it easier for you to repay your loan if your budget is tight.
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