Personal Finance Insider writes about products, strategies, and advice to help you make smart decisions with your money. We may receive a small commission from our partners, such as American Express, but our reports and recommendations are always independent and objective. Terms apply to offers listed on this page. Read our editorial standards.
According to Credible, average interest rates on 5-year refinanced graduate student loans have risen for the past two weeks, and 5-year undergraduate loan rates have fallen. 10-year loan rates are less than 10 basis points from where they were two weeks 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 fell 45 basis points last week, but were up about 1% from a year ago.
5-year variable graduate loan refinance rates rose 71 basis points.
Fixed 10-Year Student Loan Refinance Rates
10-year fixed undergraduate student loan refinance rates are up slightly from two weeks ago. Undergraduate rates rose eight basis points, while graduate rates fell four basis points. Graduate loan rates are up nearly 2% from a year ago.
Student loan interest rates by credit score
Your credit score is a major factor in the rates you receive. You will usually get a lower rate, the better your credit rating will be. Below, we’ve listed the 10-year fixed student loan rates by credit score:
Should you refinance your student loan?
Refinancing your student loans can help you lower your interest rate, switch from a variable rate loan to a fixed rate loan, or change your term length. By changing the length of your term, you may be able to spread out payments over a longer period for smaller monthly payments, even though you’ll cough up more total interest.
Be careful before deciding to refinance a federal student loan. You will lose the main protections that come with federal loans if you refinance them. For example, you will no longer be eligible for the COVID-19-related student loan payment pause, currently in place until August 31, 2022, and federal student loan relief programs like Public Service Loan Forgiveness. public.
You also won’t be eligible for specific repayment options such as income-contingent repayment plans, which take into account your specific income and family size when determining monthly payments.
What is the difference between a fixed rate loan and a variable rate 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.
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.