Student loan refinancing rates for the week: April 23, 2022
The average interest rate on 5-year refinanced student loans for undergraduates decreased last week, while 10-year interest rates remained relatively flat, according to Credibility. Student loan rates are still very low overall, so you might consider a student loan refinance today.
5-year student loan refinancing rates
The current 5-year refinanced student loan rate is down 0.25% from the week of April 4, at 3.89%. In October 2021, that rate was much lower at 2.95%.
Five-year graduate rates have risen since the week of April 11th. Currently, the average rate is 3.68%, up from 3.30% during the week of April 4.
10-year student loan refinancing rates
The 10-year undergraduate student loan refinancing rates have remained roughly the same since April 4 and increased by 0.81% since October 2021. The average 10-year graduate student loan refinancing rate is 4.21%. This is 0.04% more than April 4 and 0.77% higher than half a year ago.
Student loan interest rates by credit score
The rate of a refinanced student loan you will get from the lender is greatly influenced by you
. Usually, the better your credit score, the better the rate you will get. Below, you’ll see 10-year student loan rates by credit score:
How to refinance a student loan
Start by researching different companies and checking your terms with each lender. Evaluate the offers and find out which price and length of time is best for you. When you check your rates, lenders usually do a soft credit check, which doesn’t hurt your credit score.
You will need to apply for refinancing through a private student loan lender; You cannot refinance a student loan through the federal government.
Once you choose a company, you will fill out its application and submit documents verifying your finances and identity. After the lender makes its final offer, you will need to sign the agreement and accept the terms. Then your new lender will pay off your existing loan and you’re ready to work with a new one.
Should you refinance your student loan?
Refinancing your student loans may increase your interest rate, help you switch from a variable rate loan to a fixed rate loan, or change the term of your term. By switching the length of the term, you may be able to spread the payments over a longer period for smaller monthly payments, although you’ll reap more overall benefits.
Be careful 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 no longer be eligible for a COVID-19-related student loan repayment pause, currently in effect until August 31, 2022, and federal student loan relief programs such as Public Service Loan Forgiveness.
You will also not be eligible for specific payment options such as income-based payment plans, which take into account your specific income and family size when determining your 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 remains the same for the life of the loan. The rate you get when you take out your loan is the rate the lender charges you until you pay off your loan in full.
A variable loan has an interest rate that the lender will change periodically during the term of the loan. Lenders typically associate this rate with specific market benchmarks that are often influenced by the federal funds rate. Variable rates may start at lower than fixed rates, but can rise to a higher level over the life of your loan.