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Average interest rates on most refinanced student loans have gone down from two weeks ago, according to Credible Student Loans. The only rate to increase slightly was on 10-year graduate loans, which went up by one basis point.
Although rates are down this past week, rates are up overall since last year, and there’s a distinct possibility they’ll continue to rise in the future. For the 2022-23 school year, federal student loan rates will increase by the largest amount since the 2005-06 school 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, meaning federal loans are almost always the better option.
5-year variable student loan refinancing rates
The rates on undergraduate loans are down 39 basis points in the past week, but have hone up by about 2.5% over the past year.
Graduate rates have also dropped, falling by 41 basis points. They are lower than they were one year ago.
UndergraduateGraduateThis past week5.44%2.54%2 weeks ago5.83%2.95%6 months ago3.67%2.97%1 year ago2.92%2.68%
10-year fixed student loan refinancing rates
Undergraduate rates on 10-year fixed loans have gone down a smidge since last week, while graduate rates have risen by a hair. Undergraduate rates are down by 15 basis points.
Graduate rates have ticked up by one basis point, and they are still up more than 2% from six months ago.
Example: Say you are taking out a $10,000 undergraduate loan over a 10-year term with the interest rates listed below. If you borrowed at this past week’s rate of 5.80%, the overall lifetime cost of your student loan would be $13,202. Using the rate of 3.79% from 12 months ago, the same loan would cost $12,030, or $1,172 less.
UndergraduateGraduateThis past week5.80%5.53%2 weeks ago5.95%5.52%6 months ago3.99%3.69%1 year ago3.79%3.29%
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 week7.58%6.35%5.81%5.23%5.70%2 weeks ago6.68%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 do I know if I’ll get 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 reliably paying back your loans on time, so the better your credit score, the more likely you are to qualify for a low rate as well. Additionally, most lenders will run a soft credit check when you apply (which doesn’t impact your credit score), so you can find out from an individual lender if you’ll get approved at no harm to you.
5-year vs. 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.