Student Loan Refinance Rates This Week: April 8, 2022

The average interest rate on refinanced student loans mostly rose last week, according to Credible. However, student loan rates are still pretty low and it could be a good day to refinance your student loan.

5 year student loan refinance rates

The current rate for 5-year refinanced student loans is 3.21%, down 0.60% from the week of March 21. Six months ago, this rate was 3.04%, slightly lower than the current rate.

On the other hand, 5-year refinanced graduate student loans rose slightly 0.08% from March 21, reaching a mark of 3.17%. Rates were significantly lower half a year ago, coming in at 2.63% in September.

10 Year Student Loan Refinance Rates

10-year undergraduate student loan refinance rates have increased 0.21% since March 21 and 0.83% since September 2021. The average rate for a 10-year graduate student loan refinance years is 4.28%. This is 0.29% more than on March 21 and 0.96% more than six months ago.

Student loan interest rates by credit score

Your credit score has a significant impact on the rate a lender will offer you on your refinanced student loan. Generally speaking, the better your credit score, the lower your rate.

5-year rates by credit score

10-year rates by credit score

How to refinance a student loan

To start the process, look at different companies and check their terms with each lender. Evaluate the offers and determine which rate and term are 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 lender; you cannot refinance a student loan through the federal government.

Once you’ve chosen a company, you’ll complete your application and provide documents that verify your finances and identity. After the lender gives you 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?

You may want refinance your student loan To lower your interest rate, switch from a variable-rate loan to a fixed-rate loan, or change the length of your term. Changing the length of your term may allow you to spread payments over a longer period for smaller monthly payments, even though you’ll pay more in interest overall.

Be careful before deciding to refinance a federal student loan. Even if you can get a lower rate when you refinance a federal loan, lose key protections that come with federal loans. For example, you will not be eligible for the COVID-19-related student loan repayment pause, currently in effect through August 31, 2022, and federal student loan relief programs such as Public Service Loan Forgiveness.

You will also miss out on certain payment options like Income-Driven Payment Plansthat take into account your specific income and family size when determining 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 does not change over the life of the loan. The rate you receive when you apply for your loan is the rate the lender will charge you until you pay off your loan in full.

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

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