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Some interest rates for refinanced student loans fell last week, while others held steady, according to Credible. But like interest rates on many types of loans, student loan rates have jumped since late 2021 overall.
Interest rates on private student loans are generally in line with a variable indexing rate and borrowers’ credit scores. Mark Kantrowitz, President of PrivateStudentLoans.guru, indicates that lenders can wait to change rates significantly until they see where federal loan interest rates stand in July. This could help businesses decide what interest rates to charge so they can get a better rate than Parent PLUS loans, for example.
Kantrowitz thinks rates will start to rise in June.
Variable 5-Year Student Loan Refinance Rates
The average 5-year variable undergraduate student loan refinance rate has dropped significantly over the past two weeks and now stands at 3.46%. It is now comparable to the rate of 3.29% a year ago.
On the other hand, variable refinance rates on 5-year graduate loans are up nearly 2% from two weeks ago.
Fixed 10-Year Student Loan Refinance Rates
Refinance rates for 10-year fixed undergraduate student loans haven’t changed much in two weeks, but they’ve skyrocketed in the past six months.
Graduate loan rates are just a little higher than two weeks ago. But like undergraduate rates, they have jumped since November.
Student loan interest rates by credit score
has a substantial effect on the rate you will receive when you refinance. Usually, the higher your credit score, the lower the rate you will receive. Below, we’ve listed the 10-year fixed student loan rates by credit score:
Why refinance a student loan?
You may qualify for a lower rate when you refinance your student loans. You can also switch from a variable rate loan to a fixed rate loan or change the duration. By choosing a different term, you may be able to spread the payments out over a longer period for smaller monthly payments, even though you’ll cough up more total interest.
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 track record of repaying your loans on time reliably, so the better your credit score, the more likely you are to qualify for a low rate as well. 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.
How to choose between a fixed rate loan and a variable rate loan?
Both types of loans make sense for different borrowers.
A fixed rate student loan has a fixed interest rate for the term of 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 regularly during the term of your loan. Lenders typically tie this rate to specific market benchmarks which the federal funds rate often impacts. Variable rates may start lower than fixed rates, but can increase significantly over the life of your loan.