Personal Finance Insider writes about products, strategies and tips to help you make smart decisions with your money. We may receive small commissions from our partners such as American Express, but our reports and recommendations are always independent and objective. Terms apply to the offers listed on this page. Read our editorial standards.
Average interest rates on 5-year refinanced undergraduate student loans have fallen since two weeks ago, and 5-year graduate loans are at their lowest level in 12 months, according to Credible. The 10-year loan rate edged up.
Interest rates may not stay that low, though. For the 2022-23 school year, federal student loan interest rates will rise to the highest level since the 2005-06 school year. These new rates won’t directly affect private student loan rates, but private rates may increase because they don’t have to stay as low as federal loan rates.
5-Year Variable Student Loan Refinancing Rate
Refinancing rates for five-year variable-rate undergraduate student loans edged down over the past week, down 12 basis points from two weeks ago to 4.01%.
Refinancing rates on 5-year variable graduate loans have hit rock bottom, falling nearly 1% to a one-year low.
10-Year Fixed Student Loan Refinance Rate
Refinancing rates on 10-year fixed student loans rose last week from two weeks ago. Undergraduate rates rose 16 basis points, while graduate rates fell just 1 basis point. Interest rates have risen sharply from a year ago.
Student Loan Interest Rates by Credit Score
Your
credit score
Will greatly affect the rate you get. The higher your credit score, the better you usually get. Below, we’ve listed 10-year fixed student loan rates by credit score:
How do I know if I will be approved to refinance my student loans?
Generally speaking, the best barometer for loan approval is your credit score and history. Lenders want to see that you have a track record of consistent and on-time loan repayments, so the better your credit history, the more likely you are to get low interest rates. Also, most lenders will run a soft credit check when you apply (which won’t affect your credit score), so you can find out from individual lenders whether you’ll be approved without hurting you.
How to Refinance Your Student Loans
Start the refinancing process by reviewing your terms with different lenders. Check out the quotes and find out which rates and terms work best for you. Lenders often perform soft credit checks when you check interest rates, which won’t hurt your credit score.
You will need to apply for refinancing through a private student loan lender because you cannot refinance your student loans through the federal government.
Once you have selected a company, you will fill out its application and provide documents to verify your finances and identity. After the lender makes a final offer, you need to sign the agreement and accept the terms. Your new lender will then pay off your existing loan and you will get a new loan.
5-year and 10-year loans
If you want better interest rates and you can afford to pay off your loan quickly, a 5-year loan term might be a good option. You’ll save money on interest and free up funds to meet other financial goals faster.
A 10-year loan term will cost you more overall, but you’ll pay less each month. If you’re on a tight budget, this may make it easier to repay your loan.
Popular offers from our partners
