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Average interest rates on 5 Year Refinanced College Student Loans have increased since two weeks ago, and 5-year graduate loans have also increased, according to Credible. 10-year loan rates haven’t changed much from two weeks ago.
Rates may continue to rise. For the 2022-23 school year, federal student loan rates increase in the highest amount since 2005-06. These new rates won’t have a direct impact on private student loan rates, but private rates may increase since they don’t have to stay as low to keep up with federal loan rates.
5-Year Variable Student Loan Refinance Rates
Refinance rates on 5-year variable-rate student loans rose last week, rising 66 basis points from two weeks ago to 4.67%.
Refinance rates on 5-year variable graded loans have also increased, topping 1%.
Fixed 10 Year Student Loan Refinance Rates
Refinance rates on 10-year fixed college student loans have been creeping up for two weeks. Undergraduate rates are up two basis points, while graduate rates are down two basis points. Rates have risen substantially from a year ago.
Student loan interest rates by credit score
It substantially affects the rates you get. Generally, you’ll get a better rate the higher your credit score. Here’s a list of 10-year student loan fixed 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 history and credit score. Lenders like to see that you have a history of consistently paying your loans on time, so the better your credit history, the more likely you are to qualify for a low rate. Plus, most lenders will run 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 get approved without harm to yourself.
How to refinance a student loan
Start the refinancing process looking at your terms with different lenders. Review the offers and find out what rate and term length is best for you. When you check your rates, lenders will usually run a soft credit check, which doesn’t affect your credit score.
You will need to apply for refinancing through a private student loan lendersince you cannot refinance a student loan through the federal government.
Once you’ve chosen a company, you’ll complete your application and submit documents that verify your finances and identity. After the lender makes their final offer, you’ll need to sign the agreement and agree to the terms. Then your new lender will pay off your existing loan and you’ll be up and running with a new loan.
5-year vs. 10-year loan
If you want a better interest rate and can financially pay off your loan quickly, a 5-year loan term might be a great option. You’ll save money on interest and free up money for your other financial goals more quickly.
A 10-year loan term will cost you more overall, but will make smaller monthly payments. This can make it easier for you to pay off your loan if you’re on a tight budget.