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The average interest rate on refinanced undergraduate loans rose last week, while graduate loan refinance rates fell, according to Credible. Student loan rates are generally low, so you might want to consider refinancing your student loan now before it goes up.
Interest rates on private student loans are linked to a variable indexed rate and the borrowers’ credit ratings. Mark Kantrowitz, President of PrivateStudentLoans.guru, indicates that lenders may be waiting to see where federal loan interest rates start in July. This could help businesses decide what interest rates to charge so they can beat Parent PLUS loans on price, for example.
Kantrowitz thinks rates will start to rise in June.
Variable 5-Year Student Loan Refinance Rates
The average 5-year variable refinanced undergraduate student loan rate is 5.07%, which is a substantial increase of 0.95% from two weeks ago. In November, this rate was much lower, at 2.85%.
Five-year variable graduate rates have fallen significantly over the past two weeks. Currently, the average rate is 2.57%, compared to 3.71% the previous week.
Fixed 10-Year Student Loan Refinance Rates
Refinance rates on 10-year fixed undergraduate student loans last week rose slightly from two weeks ago, with rates rising 0.10%. Undergraduate loan rates have increased by 1.30% since last May.
Graduate loans were down from two weeks ago, falling 0.05%. They are up 1.11% from six months ago.
Student loan interest rates by credit score
has a major effect on the rate you will get when you refinance. Usually, the better your credit score, the better the rate you will receive. Below, we’ve listed the 10-year fixed student loan rates by credit score:
How to refinance a student loan?
Start the process by researching different companies and checking your terms with each lender. Review the details of each offer and determine the rate and term that works best for you. You must refinance through a private student lender because you cannot refinance a student loan through the federal government.
Once you have chosen a company, you will provide documents that verify your finances and identity. Once the lender gives you their final offer, you will need to agree to the terms and sign on the dotted line. Then your new lender will pay off your existing loan and you’ll be locked into a new loan.
Should you refinance your student loan?
Refinancing your student loan can lower your interest rate, allow you to switch from a variable rate loan to a fixed rate loan, or change the term of your loan. Changing the length of your term 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 refinancing 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 Service Loan Forgiveness. public.
You also won’t be able to take advantage of certain repayment options like income-contingent repayment plans, which take into account your specific income and family size when determining monthly payments. In some cases, very low-income borrowers can even pay as little as $0 per month.
Do you need a co-signer to refinance a student loan?
It depends on the lender. Some lenders require one, while others recommend one to increase your chances of getting a loan. You can also get a better rate with a co-signer.
Typically, to get a loan without a co-signer, you’ll need a solid credit score, a reliable payment history, and a stable source of income.