This week’s student loan refinance rate: June 21, 2022

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According to Credible, average interest rates on most refinanced student loans have been falling for the past two weeks. Only 10-year fixed undergraduate rates increased. Rates on 10-year graduate loans have fallen slightly, and rates on all five-year loans are down.

Over the next school year, federal student loan rates will increase by the largest amount since 2005-06. These new rates won’t directly impact private student loan rates, but private rates may go up because they don’t have to stay so low to compete with federal loan rates.

Laurel Taylor, CEO and founder of student debt fintech, says that over the past 20 years it has been rare for rates to rise so dramatically in such a short period of time. However, Taylor says borrowers shouldn’t worry too much about rising federal rates.

“The impact on monthly payments is relatively minor, totaling less than $5 per month and less than $400 over the standard 10-year repayment on a typical $5,500 annual loan for an undergraduate student,” said Taylor.

Variable 5-Year Student Loan Refinance Rates

5-year variable rate undergraduate student loan refinance rates fell last week, falling 39 basis points from two weeks ago to 4.08%.

5-year variable graduate loan refinance rates are also down from two weeks ago. Currently, the average rate is 2.73%.

Rates for both loan types are up from a year ago.

Fixed 10-Year Student Loan Refinance Rates

Refinance rates for 10-year fixed student loans last week rose slightly from two weeks ago. Undergraduate rates rose 16 basis points, while graduate rates fell only one basis point. Rates have risen considerably over the past year.

Student loan interest rates by credit score


credit score

significantly affects the fares you get. You will generally get a better rate the higher your credit score. Below, we’ve listed the 10-year fixed student loan rates by credit score:

How do I know if I will be 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 repaying your loans on time reliably, so the better your credit score, the more likely you are to qualify for a low rate as well. Also, most lenders will perform 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 be approved without you. make of bad.

How to refinance a student loan

Start the refinancing process by checking your terms with different lenders. Consult the offers and determine the rate and duration that suits you best. When reviewing your rates, lenders usually do a soft credit check, which doesn’t hurt your credit score.

You will need to apply for refinance with a private student lender, as you cannot refinance a student loan with the federal government.

Once you have chosen a company, you will complete their application and provide documentation proving your finances and identity. Once the lender has made 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 start with a new loan.

How to choose between a loan over 5 years and over 10 years?

Both types of loans suit different types of borrowers.

If you want a lower interest rate and are able to pay off your loan faster, a 5-year loan could be a great choice. You’ll save money in interest and free up money to reach your other financial goals faster.

A 10-year loan term will cost you more overall, but you’ll make lower monthly payments. This can make it easier for you to repay your loan if your budget is tight.

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