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According to Credible, average interest rates on refinanced student loans are largely the same as two weeks ago. 5-year graduate refinance rates saw the biggest change, rising 24 basis points. No other rate moved more than 13 basis points.
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 13 basis points last week, but were up about 1.5% from a year ago.
5-year variable graduate loan refinance rates rose 24 basis points.
Fixed 10-Year Student Loan Refinance Rates
10-year fixed undergraduate student loan refinance rates remained essentially flat last week. Undergraduate rates fell two basis points, while graduate rates fell four basis points. Undergraduate loan rates are up nearly 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.
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.
Loan over 5 years vs 10 years
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.