The average interest rate on 5-year refinanced student loans fell last week, while 10-year rates rose significantly, according to Credible. Still, student loan rates are relatively low, so you might want to consider refinancing your student loan today.
Variable 5-Year Student Loan Refinance Rates
The current 5-year variable refinanced undergraduate student loan rate is down nearly 0.50% from two weeks ago. Six months ago, this rate was significantly lower, at 2.72%.
Variable rates for five-year graduates have also fallen for two weeks. Currently, the average rate is 3.26%, compared to 3.68% the previous week.
Fixed 10-Year Student Loan Refinance Rates
Last week, 10-year fixed student loan refinance rates rose significantly from two weeks ago, with undergraduate rates rising 0.37%. Undergraduate loan rates have risen 1.25% since last October.
Graduate loans are up 0.28% over the past two weeks and about 1% from a year ago.
Student loan interest rates by credit score
has a major impact on the rate you will get when you refinance your student loan. Usually, the better your credit score, the lower the rate you will receive. Below, you’ll see the 10-year fixed student loan rates by credit score:
Why refinance a student loan?
You may qualify for a better rate when you refinance your student loans. You can also switch from a variable rate loan to a fixed rate loan, or modify the duration of your loan. By choosing a different term, you may be able to spread the payments over a longer period for smaller monthly payments, even though you’ll cough up more total interest.
What happens if I refinance a federal student loan?
Think twice before choosing to refinance a federal student loan. You will lose the main protections that come with federal loans if you refinance them. For example, you will not be eligible for the COVID-19-related student loan payment pause, currently in place until August 31, 2022, and federal student loan relief programs like Public Service Loan Forgiveness. public.
You also won’t be eligible for specific repayment options such as income-contingent repayment plans, which take into account your specific income and family size when determining monthly payments.
How to choose between a fixed rate loan and a variable rate loan?
Both types of loans suit different types of borrowers.
A fixed rate student loan has an interest rate that is the same throughout your loan. The rate you get when you take out your loan is the rate the lender will charge you until you repay your loan in full.
A variable rate loan has an interest rate that the lender will change regularly during the term of your loan. Lenders typically tie this rate to specific market benchmarks which are often impacted by the federal funds rate. Variable rates can start lower than fixed rates, but can climb higher over the life of your loan.