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According to Credible, average interest rates on refinanced student loans have been mixed for two weeks. 5-year undergraduate and 10-year undergraduate loan rates have decreased, while 5-year undergraduate and 10-year undergraduate rates have increased.
While some rates fell last week, rates have generally been rising since last year, and there is a real possibility that they will continue to rise in the future. For the 2022-23 school year, federal student loan rates will increase by the highest amount since the 2005-2006 school year. 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.
Student loan refinance companies featured by Insider
Variable: 2.49% – 8.24%, Fixed: 4.24% – 8.49%
Variable: 1.74% – 9.51%, Fixed: 2.29% – 8.63%
Variable (with autopay discount): 1.89% – 7.99% APR, Fixed (with autopay discount): 3.49% – 7.99% APR
Variable 5-Year Student Loan Refinance Rates
Undergraduate loan rates fell 78 basis points last week, although they are still up more than 1% from six months ago.
Graduation rates rose slightly, rising four basis points. They are just above what they were a year ago.
Fixed 10-Year Student Loan Refinance Rates
Undergraduate rates on 10-year fixed loans have risen a hair’s breadth since last week, while graduate rates have fallen slightly. Undergraduate rates increased by 25 basis points.
Graduation rates were down 28 basis points, and up about 2% from 12 months ago.
Student loan interest rates by credit score
Your interest rate will generally improve with a higher credit score – we show this in the table below. We give you the 10-year fixed student loan rates by credit score:
No, you will not be eligible for any type of loan forgiveness if you refinance your federal student loans. President Joe Biden recently announced the government would forgive up to $10,000 in student debt for borrowers earning less than $125,000 a year and up to $20,000 for Pell Grant recipients.
All types of federal loans will be eligible for forgiveness, but private student loans will not be affected. Married couples or heads of households earning less than $250,000 will also be eligible for assistance.
Refinancing federal student loans might sound like a good idea if you get a better interest rate, but it will come at the cost of being ineligible for loan forgiveness — on a large scale and through programs like public service loan.
You may qualify for a better rate when you refinance your student loans. You can also switch from a fixed rate loan to a variable rate loan or change the term of your loan. By choosing a new term, you may be able to spread the costs over an extended period for smaller monthly payments, even though you will pay more total interest.
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. Plus, most lenders will do 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 hurting yourself.
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.