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Average interest rates on refinanced student loans are mixed from two weeks ago, according to data compiled by Credible Student Loans. Rates on five-year undergraduate loans declined, while five-year graduate loan rates rose. The same pattern was seen in 10-year loans, with undergraduate rates falling and graduate rates increasing slightly.
While some rates are down this past week, rates are broadly higher than they were at this time last year and are likely to continue rising. Federal student loan rates for the 2022-23 school year will see the biggest increase since 2005-06. While that won’t have a direct impact on private student loans, those rates will probably increase as well to remain on par with federal loan rates.
Note: Federal student loans are almost always a better option than private loans because they usually come with lower interest rates. Private loans also don’t qualify for forgiveness.
5-year variable student loan refinancing rates
The rates on undergraduate loans have dropped 64 basis points in the past week, leaving them 15 basis points above where they were six months ago and a little more than 1% higher than they were at this time last year.
Graduate rates increased 94 basis points in the past week. They are 33 basis points above where they were six months ago 81 basis points higher than 12 months ago.
UndergraduateGraduateThis past week4.02%3.52%2 weeks ago4.66%2.58%6 months ago3.87%3.19%1 year ago2.99%2.71%
10-year fixed student loan refinancing rates
Undergraduate rates on 10-year fixed loans have dropped a bit since last week, while graduate rates have increased.
Undergraduate rates are down by 31 basis points, leaving them 1.93% higher than they were at this time last year. Graduate rates increased 26 basis points and are up 2.27% from 12 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 6.07%, the overall lifetime cost of your student loan would be $13,365. Using the rate of 3.89% from 12 months ago, the same loan would cost $12,087, or $1,278 less.
UndergraduateGraduateThis past week5.75%5.48%2 weeks ago6.06%5.22%6 months ago4.15%3.61%1 year ago3.82%3.21%
Student loan interest rates by credit score
Your interest rate will usually improve with a higher credit score — we show this in the table below. We’re giving you the 10-year fixed student loan rates by credit score:
Below 680680-719720-779780+Average RateThis past week6.41%6.46%5.58%5.10%5.69%2 weeks ago7.25%6.52%5.72%4.96%5.80%
Frequently asked questions
Am I eligible for loan forgiveness if I refinance my federal student loan?
You won’t be eligible for any type of loan forgiveness if you refinance your federal student loans. The Biden administration is poised to forgive up to $10,000 in student debt for borrowers making less than $125,000 per year and as much as $20,000 for Pell Grant recipients.
All types of federal loans will qualify for forgiveness, but private student loans won’t be affected. Married couples or heads of households who make less than $250,000 will also qualify for aid.
Refinancing federal student loans might seem smart if it gives you a lower interest rate, but it will disqualify you for loan forgiveness.
Why refinance a student loan?
Refinancing your student loans can lower your rate. You can also change from a fixed-rate to a variable-rate loan, or change your term length. Increasing the amount of time you have to pay your loan can reduce your monthly payments, but you’ll pay more in total interest.
How do I know if I’ll get approved to refinance my student loan?
The best barometer of loan approval is usually your credit score and history. Lenders like a track record of reliably paying back your loans on time. 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 affect your credit score), so you can find out from an individual lender if you’ll get approved at no harm to you.
What’s the difference between a 5-year and 10-year loan?
If you want a better interest rate and you’re able to pay off your loan fast, a five-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 can make it easier to repay your loan on a tight budget.