This week’s student loan refinance rate: April 8, 2022

The average interest rate on refinanced student loans has mostly increased in the past week, according to Credible. However, student loan rates are still quite low and it could be a good day to refinance your student loan.

5-Year Student Loan Refinance Rates

The current 5-year undergraduate refinanced student loan rate is 3.21%, down 0.60% from the week of March 21. Six months ago, this rate was 3.04%, slightly lower than the current rate.

In contrast, 5-year refinanced student loans for graduates have edged up 0.08% since March 21, reaching 3.17%. Rates were significantly lower six months ago, reaching 2.63% in September.

10-Year Student Loan Refinance Rates

10-year undergraduate student loan refinance rates have increased 0.21% since March 21 and 0.83% since September 2021. The average 10-year undergraduate student loan refinance rate is 4.28%. This is 0.29% more than on March 21 and 0.96% more than six months ago.

Student loan interest rates by credit score

Your credit score has a significant impact on the rate a lender will offer you on your refinanced student loan. Generally speaking, the better your credit score, the lower your rate.

5-year rate based on credit score

10-year rate based on credit score

How to refinance a student loan

To start the process, look at different companies and check your terms with each lender. Evaluate the offers and determine the rate and term that suits you best. When you check your rates, lenders usually generate a soft credit check, which doesn’t hurt your credit score.

You will need to apply for refinancing through a private student lender; you are not able to refinance a student loan through the federal government.

Once you have chosen a company, you will complete their application and provide documents that verify your finances and identity. Once the lender gives you their final offer, you will need to sign the agreement and agree to the terms. Then your new lender will pay off your existing loan and you’ll be ready to take out a new loan.

Should you refinance your student loan?

You may want to refinance your student loan to lower your interest rate, switch from a variable rate loan to a fixed rate loan, or change the term of your loan. Changing your term length can allow you to spread out payments over a longer period for smaller monthly payments, even though you’ll pay more interest overall.

Be careful before deciding to refinance a federal student loan. Even if you are able to get a lower rate when you refinance a federal loan, you will lose the main protections that come with federal loans. 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 the Service Loan Forgiveness. public.

You’ll also miss out on some repayment options like income-contingent repayment plans, which consider your specific income and family size when determining monthly payments.

What is the difference between a fixed rate loan and a variable rate loan?

A fixed rate student loan has an interest rate that does not change for the term of the loan. The rate you receive 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 will change periodically over 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.

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