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Average interest rates on refinanced student loans were little changed from two weeks ago, according to Credible Student Loans. The rates on undergraduate loans increased slightly, five-year graduate rates dipped, and 10- year graduate loans stayed the same.
If you have a credit score above 780, your rate on 10-year fixed student loans will average 5.16%. This is lower than the average rate of 5.87% for borrowers across all credit scores. Generally speaking, the higher your credit score, the lower a rate you’ll be able to get.
Though student loan rates haven’t changed much this week, they have increased substantially in the last 12 months. Federal student loan rates for 2022-23 are up by the most in almost 20 years. These new rates don’t directly affect private student loan rates, but private rates may go up as they don’t have to stay as low to compete with federal loan rates.
Important: While you can refinance your federal loan into a private one, private loans often have higher interest rates and don’t come with benefits like the repayment pause that’s slated to run through the end of 2022. You also won’t be able to take advantage of federal student loan forgiveness. That makes federal loans the best option in most cases.
5-year variable student loan refinancing rates
This past week, five-year variable undergraduate rates are up 31 basis points. Undergraduate rates are about the same as they were six months ago, but significantly higher than they were one year ago.
On the flip side, graduate rates are down a smidge. The rates have dropped 24 basis points over the past week, but are about 70 basis points higher than 12 months ago.
UndergraduateGraduateThis past week4.44%3.31%2 weeks ago4.13%3.55%6 months ago4.50%2.57%1 year ago2.85%2.64%
10-year fixed student loan refinancing rates
Rates on 10-year undergraduate loans are up just 12 basis points from two weeks ago. Compared to 12 months ago, rates are up about 2.5%.
If you wanted to refinance your graduate student loans this past week, you’d pay the same rate as you would have two weeks ago. Graduate rates are up more than 2% from one year ago.
UndergraduateGraduateThis past week6.17%5.49%2 weeks ago6.05%5.49%6 months ago5.15%4.57%1 year ago3.68%3.38%
Student loan interest rates by credit score
Your interest rate will usually improve with a better credit score. Other aspects of your financial situation also have an impact on your rate. The table below shows the 10-year fixed student loan rates by credit score:
Below 680680-719720-779780+Average RateThis past week7.70%6.81%6.00%5.16%5.87%2 weeks ago6.18%6.43%5.96%5.13%5.84%
Example: Say 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 $28,740 with this past week’s rate of 7.70%. For borrowers with a score over 780, paying an average rate of 5.16%, the same loan would have cost $25,644, or $3,096 less.
Frequently asked questions
What’s the benefit of refinancing my student loan?
Refinancing your student loans might get you a better rate. You can also change from a fixed-rate to a variable-rate loan, or switch your term length. A different term length may enable you to spread out costs over a longer time for smaller monthly payments. However, you’ll pay more in total interest.
Does refinancing my student loans affect my credit score?
In the short term, it will. Lenders will perform a hard inquiry to check your credit history when you apply for a new loan. That will ding your credit score temporarily.
Additionally, when you refinance, your original loan is closed and a new one is opened. Part of your credit score is based on your payment history, so it may take a hit as you work to establish a new track record of reliable payments.
Is it difficult to get approved for student loan refinancing?
Your credit history is the biggest factor in your refinancing approval chances. If you have a poor credit score, it will be harder for you to get a new loan. But you may be able to enlist a cosigner to boost your likelihood of approval.