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Average interest rates on refinanced graduate student loans have gone down from two weeks ago, according to Credible Student Loans. On the flip side, undergraduate rates are up on both 5-year and 10-year loans.
Although graduate rates are down this past week, rates are up overall since last year, and there’s a distinct possibility they’ll continue to go up in the future. For the 2022-23 school year, federal student loan rates will rise by the highest amount since the 2005-06 year. These new rates won’t directly impact private student loan rates, but private rates may increase as they don’t have to remain as low to be on par with federal loan rates.
Note: While you can refinance your federal loan into a private one, private loans usually come with higher interest rates and without benefits like the current repayment pause — which means federal loans are almost always the better option.
5-year variable student loan refinancing rates
The rates on undergraduate loans are up 76 basis points in the past week, and have skyrocketed by nearly 3% over the past year.
On the bright side, graduate rates have dropped by 50 basis points and are only slightly higher than they were at this point 12 months ago.
UndergraduateGraduateThis past week5.83%2.97%2 weeks ago5.07%3.47%6 months ago3.65%2.57%1 year ago2.93%2.65%
10-year fixed student loan refinancing rates
Undergraduate rates on 10-year fixed loans have increased by a hair since last week, while graduate rates have fallen slightly. Undergraduate rates are up by 10 basis points.
Graduate rates have dropped by 15 basis points, though they are still up over 2% from six months ago.
Example: Say you are taking out an undergraduate loan of $10,000 over a 10-year term with the interest rates listed below. If you took out a loan with this past week’s rate of 5.96%, the overall lifetime cost of your student loan would be $13,298 paid over 10 years. Using the rate of 3.70% from 12 months ago, this same loan would cost $11,979, or $1,319 less.
UndergraduateGraduateThis past week5.96%5.59%2 weeks ago5.86%5.74%6 months ago4.04%3.55%1 year ago3.70%3.37%
Student loan interest rates by credit score
You will usually get a better interest rate with a higher credit score — you can see this in the table below. We’re showing you the 10-year fixed student loan rates by credit score:
Below 680680-719720-779780+Average RateThis past week6.68%6.33%5.89%5.13%5.87%2 weeks ago6.93%7.03%5.45%5.01%5.83%
Top picks for private student loan refinancing
There are a lot of options out there to refinance your student loans. To help you start on your search, we’ve highlighted a few of our favorite refinancing options, along with their rates, pros, and cons.
Read about our top choices and more in our guide to the best student loan refinancing companies.
Why refinance a student loan?
You might qualify for a better rate when you refinance your student loans. You will also be able to change from a fixed-rate to a a variable-rate loan, or switch up your term length. By choosing a different term length, you might be able to distribute costs over an extended period for smaller monthly payments, though you’ll pay more in total interest.
How to refinance a student loan
Start the refinancing process by looking at your terms with different lenders. Review the offers and figure out which rate and term length is best for you. When you check your rates, lenders will usually perform a soft credit check, which doesn’t hurt your credit score.
You’ll need to apply to refinance through a private student loan lender, as you’re unable to refinance a student loan through the federal government.
Once you’ve picked a company, you’ll fill out its application and give documents that verify your finances and identity. After the lender makes its final offer, you’ll need to sign the agreement and accept the terms. Then, your new lender will pay off your existing loan and you’ll be off and running with a new loan.
What’s the difference between a 5-year and 10-year loan?
If you want a better interest rate and you’re financially able to pay off your loan fast, a 5-year loan term could be a great choice. You’ll save money in interest and will free up money to put toward your other financial goals more quickly.
A 10-year loan term will cost you more overall, but you’ll make smaller monthly payments. This may make it easier for you to repay your loan if you’re on a tight budget.