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Average interest rates on refinanced student loans are mostly up from two weeks ago, according to Credible Student Loans. Rates on 5-year variable graduate loans went up by over 3%. 10-year graduate loans decreased, while rates on both types of undergraduate loans decreased.
Rates are up 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 go up by the largest amount since 2005-06. These new rates won’t have a direct impact on 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 often have higher interest rates and don’t come with benefits like the current repayment pause, meaning federal loans are almost always the better option.
5-year variable student loan refinancing rates
Graduate rate changes headline the five-year variable rate shake-ups over the past week, as they’ve gone up by over 3%. Graduate rates are at their highest point in the past year.
The rates on undergraduate loans have ticked up by 11 basis points in the past week and hover just above 4%.
UndergraduateGraduateThis past week4.13%6.64%2 weeks ago4.02%3.51%6 months ago3.75%3.37%1 year ago3.44%2.95%
10-year fixed student loan refinancing rates
Undergraduate rates on 10-year fixed loans have barely moved since last week, while graduate rates have dropped a bit. Undergraduate rates are up by two basis points.
Graduate rates have gone down by 28 basis points, and they are up about 2% from one year ago.
Example: Say you are taking out a $20,000 undergraduate loan over a 10-year term with the interest rates listed below. If you borrowed at this past week’s rate of 5.82%, the overall lifetime cost of your student loan would be $26,428. Using the rate of 3.81% from 12 months ago, the same loan would cost $24,083, or $2,345 less.
UndergraduateGraduateThis past week5.82%5.27%2 weeks ago5.80%5.55%6 months ago4.16%3.81%1 year ago3.81%3.33%
Student loan interest rates by credit score
Your interest rate will often improve with a better 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 week7.17%6.33%5.51%5.08%5.66%2 weeks ago6.41%6.48%5.58%5.19%5.74%
Frequently asked questions
If I refinance my federal student loan, am I still eligible for loan forgiveness?
No, you will not be eligible for any type of loan forgiveness if you refinance your federal student loans. President Joe Biden recently announced that the government will 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 like a good idea if you’re getting a better interest rate, but it will come at the cost of being ineligible for loan forgiveness — both widescale and through programs like Public Service Loan Forgiveness.
Why refinance a student loan?
You might be eligible for a better rate when you refinance your student loans. You can also change from a fixed-rate to a variable-rate loan, or change your term length. By picking a new 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.
Will I 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.
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.