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Average interest rates on refinanced student loans are mixed from two weeks ago, according to Credible Student Loans. Rates on 5-year graduate loans and 10-year undergraduate loans are down. Rates on 5-year undergraduate loans and 10-year graduate loans are up overall.
The average 10-year fixed student loan rate for borrowers with credit scores below 680 is 7.84%. This is higher than the average rate of 6.11% for borrowers across all credit scores. Usually, the lower your credit score, the higher the rate you’ll usually get.
Federal student loan rates for the upcoming school year have risen by the most in nearly two decades. Private student loan rates aren’t directly affected by federal rates, but private rates may go up as they don’t have to stay as low to remain competitive with federal ones. Consumer borrowing costs across the board have risen sharply this year as the Federal Reserve aggressively moved to raise base rates to slow inflation.
Important: The repayment pause on federal loans was recently extended through the end of August 2023. If you refinance your federal loans into private loans, you won’t qualify. You may also pay higher interest rates, making federal loans the best choice in most cases.
5-year variable student loan refinancing rates
Rates on 5-year undergraduate loans have gone up by 50 basis points from last week and are almost 2% higher than they were six months ago. Graduate rates have fallen by 27 basis points from last week.
Compared to one year ago, both undergraduate and graduate rates are up significantly.
UndergraduateGraduateThis past week4.92%3.28%2 weeks ago4.42%3.55%6 months ago3.07%3.56%1 year ago2.77%2.53%
10-year fixed student loan refinancing rates
Rates on 10-year undergraduate loans dropped a bit from two weeks ago. They’re 76 basis points higher than they were six months ago, and up 2.36% compared with last year.
On the other hand, graduate rates have ticked up this past week.
UndergraduateGraduateThis past week6.18%5.89%2 weeks ago6.29%5.81%6 months ago5.42%4.66%1 year ago3.82%3.31%
Student loan interest rates by credit score
A higher credit score often leads to a better interest rate. However, other parts of your financial situation also impact your rate. The table below shows the 10-year fixed student loan rates by credit score:
Below 680680-719720-779780+Average RateThis past week7.84%6.94%6.09%5.37%6.11%2 weeks ago8.30%7.30%5.90%5.67%6.15%
Example: Suppose you’re repaying $20,000 undergraduate loan over a 10 years with the interest rates listed below. If you are a borrower with a score below 680, the lifetime cost of your loan would be $28,916 with this past week’s rate of 7.84%. For borrowers with a score over 780, paying an average rate of 5.37%, the same loan would have cost $25,892, or $3,024 less.
Frequently asked questions
Should I make student loan payments during the repayment pause?
Repaying your student loans during the repayment pause may help you save hundreds or even thousands on interest. This is because any payment you make on your student loans goes directly toward your balance. Usually when you make a payment, a portion of it goes toward paying down interest.
Do I need a cosigner to get a private student loan?
For most younger students, it’s unlikely you’ll be approved without a cosigner. It is possible, but mainly for students who have an established credit history and an income. We have a guide for the best student loans without a cosigner.
Once you have some credit established, however, you may be able to remove your cosigner by refinancing. Some lenders also allow borrowers to remove cosigners after several years of consecutive payments.
Can my private student loans be forgiven?
Unfortunately, no. Private student loans are not eligible for any federal forgiveness programs, including the widescale forgiveness currently being challenged in court.
Should I pay student loans while I’m still in school?
This depends on your financial situation. Interest will still accrue while you’re in school, so it may be beneficial to make your interest payments each month or set aside a certain amount of money for monthly payments.
Paying either the principal of your student loans or the interest could be a good idea because when your loan goes into repayment, any unpaid interest will capitalize. This means it will become part of the principal balance of your loan, which ups the loan. Interest is then determined using this new, higher loan balance.