Average interest rates on five-year variable refinanced undergraduate student loans fell by more than half from last week, according to Credible. Ten-year loan rates are about flat and five-year variable loan rates for graduates are on the rise.
While five-year undergraduate student loan rates are falling, the past year has seen a significant increase in rates across the board. Federal student loan rates for 2022-23 increase by the most in nearly two decades. These new rates won’t have a direct impact on private student loan rates, but private rates could go up because they don’t have to stay so low to be in the same range as federal loan rates.
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Variable: 3.40% – 8.24%, Fixed: 3.99% – 8.24%
Variable: 2.49% – 8.65% with AutoPay, Fixed: 3.29% – 8.49%
Variable: 3.24% – 7.99% APR with AutoPay, Fixed: 3.99% – 8.99% APR with AutoPay
Variable 5-Year Student Loan Refinance Rates
If you wanted to refinance a 5-year undergraduate loan last week, you would have received a much better rate than two weeks ago. Rates fell by more than 4 percentage points to 3.77%. This significantly lowers loan costs for these borrowers.
On the other hand, graduation rates are up about 63 basis points from two weeks ago, and are also higher than they were six months ago.
Fixed 10-Year Student Loan Refinance Rates
While 5-year undergraduate loan rates have oscillated considerably, 10-year loan rates have remained relatively stable, not changing much over the past week.
Student loan interest rates by credit score
Your interest rate will generally improve with a better credit score. The table below shows 10-year fixed student loan rates by credit score:
Frequently Asked Questions
Why should I refinance my student loan?
Refinance your student loans can get you a better rate. You can also switch from a fixed rate loan to a variable rate loan or change the term of your loan. A different term can allow you to spread the costs over an extended period for lower monthly payments. However, you will pay more in the whole interest.
Will refinancing my student loans affect my credit rating?
In the short term, yes. Lenders will do a thorough investigation to check your credit history when you apply for a new loan. This will temporarily lower your credit score.
Also, when you refinance, your original loan is closed and a new one is opened. Since part of your credit score is based on your payment history, your credit score may suffer as you work to establish a new track record of reliable payments.
Is it difficult to get approved for refinancing a student loan?
Your credit history is the most important factor in your chances of refinancing approval. If you have a bad credit rating, it will be more difficult for you to get a new loan. But you may be able to use a co-signer to increase your chances of approval.