Student Loan Refinance Rates This Week: May 24, 2022

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Refinancing your student loan allows you to change the length of your term.

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Average interest rates on refinanced student loans have fluctuated for two weeks, according to Credible. Five-year rates on college student loans have risen, while graduate rates have plummeted. Ten-year rates on undergraduate and graduate loans have risen slightly.

The US Treasury Department has announced that federal student loan rates will increase for the upcoming academic year. These new rates won’t directly affect private student loan rates, but private lenders may raise their rates now that they don’t have to be as low to compete with federal loans. You may see refinanced student loan rates increase in the coming months.

5-Year Variable Student Loan Refinance Rates

5-year variable undergraduate student loan refinancing rates are at 3.62% on average last week. That’s an increase of 22 basis points from two weeks ago. Six months ago, this rate was around 2.59%.

Refinance rates on 5-year variable graded loans are down compared to two weeks ago. Currently, the average rate is 3.08%, which is still slightly higher than last year.

Fixed 10 Year Student Loan Refinance Rates

Refinancing rates on 10-year undergraduate and graduate fixed student loans last week are slightly higher than two weeks ago, with rates changing just six basis points. Rates have increased more significantly from six months ago.

Student loan interest rates by credit score

The rate you get when you refinance is significantly affected by your

credit score

.. Generally, the better your credit score, the lower your rate. Here’s a list of 10-year student loan fixed rates by credit score:

How to refinance a student loan

Check different companies and see their terms with each lender. Review the offers and find out what rate and term length is best for you. When you look at your rates, lenders usually run a soft credit check, which doesn’t affect your credit score.

You have to refinance through a private student loan lender, since you cannot refinance a student loan through the federal government.

Once you’ve chosen a company, complete your application and verify your finances and identity. After the lender makes their final offer, you’ll need to sign the agreement and agree to the terms. Your new lender will then pay off your existing loan and you’ll be ready to take out a new loan.

Should you refinance your student loan?

Refinancing your student loans can earn you a better interest rate, help you switch from a variable-rate loan to a fixed-rate loan, or change the length of your term. By changing the length of your term, you may be able to spread payments over a longer period for smaller monthly payments, even though you’ll pay more in total interest.

Be careful before you choose to refinance a federal student loan. You will lose the key protections that come with federal loans if you refinance them. For example, you will no longer be eligible for the COVID-19-related student loan repayment pause, currently in effect through August 31, 2022, and federal student loan relief programs like Public Service Loan Forgiveness.

You also won’t qualify for specific payment options, such as income-driven repayment plans, which take into account your specific income and family size when determining monthly payments.

Fixed Rate Loan Vs. variable rate

The interest rate on a fixed-rate student loan never changes. The rate you get when you get your loan is the rate the lender gets until you pay off your loan in full.

A variable rate loan has an interest rate that the lender will change periodically during the term of your loan. Lenders typically link this rate to specific market benchmarks affected by the fed funds rate. Variable rates can start out lower than fixed rates, but can increase significantly over the life of your loan.

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