What Are the Student Loan Refinancing Rates?


Student loan refinancing rates vary based on credit score, income, and other financial factors. (iStock)

Refinancing a student loan can help you save money on your student debt. But before you consider refinancing, it’s important to know how the process works and how student loan refinance rates affect what you would pay.

Credible Can Help You Explore Your Student Loan Refinance Options so you can determine if it’s right for you.

What is student loan refinancing?

Student loan refinancing involves paying off existing student debt using a new refinance loan from a bank, credit union, or online lender.

The two federal and private student loans can be refinanced, but many people choose to refinance only private loans rather than foregoing the benefits of federal loans for borrowers, such as flexibility in payment options and loan forgiveness possibilities.


After refinancing, you will have a new loan, usually with a new loan manager, who will replace your existing loans.

How To Get The Best Student Loan Refinance Rate?

Even a small difference in APR can have a big impact on the cost when paying off student loans over several years. To make sure you get the best rate, try consolidating your finances before you apply. This means making sure you have a good credit score and proof of stable, reliable income. If you don’t have both of these, consider applying to a co-signer who does so that you can qualify for a loan at a competitive rate.

Student loan refinancing rates have also fallen to new lows. In August, 10-year fixed-rate loan rates averaged 4.31%, down 29% from a peak of 6.09% in May 2018, according to a report. analysis of a sample of over 60,000 student loan refinances facilitated by the Credible market. 5-year floating rate loan rates averaged 3.17%, down 37% from a peak of 5.05% in 2018.

Compare purchases to get quotes from multiple lenders can also help you get the most affordable loan possible, as rates vary. You can use Credible to compare student loan refinancing rates from multiple lenders at once without affecting your credit score.

How much does it cost to refinance a student loan?

Refinancing can change your monthly payment and the total cost of payment, but your new loan should be cheaper. You can use a online student loan repayment calculator to see how your new loan would affect your student debt costs.

However, even if your payment will change, getting your new refinance loan shouldn’t cost you anything. Credible partner lenders do not charge loan application fees, prepayment penalties, or origination fees. visit Credible today to compare rates from several lenders both so that you can find an affordable option.

What Are the Student Loan Refinance Rates?

For most people, the goal of refinancing student loans is to reduce the cost of paying off school debt. But that only happens if you qualify for a refinance loan at a lower APR than you are currently paying on your existing debt. Student loan refinancing rates determine if this can happen.


Your refinance rate determines the interest you will pay to borrow on your new loan. If your current interest rate is 10% and you can refinance at 5%, refinancing should save you money. But if the loans you are paying off now have a 6% interest rate and you can only qualify for a 9% refinance loan, you probably wouldn’t want to refinance because that would mean you owe more. interest to your lender for the privilege of borrowing.

What are the current student loan refinancing rates?

If you are considering refinancing your loans, it’s probably a good time to do as qualified borrowers, he should be able to claim interest rates close to record lows. In fact, some lenders offer variable rate loans as low as 1.95% and fixed rate loans as low as 2.79% in September, according to a Credible pricing table. These rates are significantly lower than they were a year ago, as the offers available on Credible in May 2019 started at 2.80% for variable rate loans and 3.39% for fixed rate loans.


Rates are near record lows as the Federal Reserve expects to keep benchmark interest rates close to zero until 2022. Since it is very affordable for banks to borrow money from each other to others, savings are largely passed on to the consumer.

What is the difference between a fixed rate and a variable rate?

When comparing loan offers, you will notice that you have a choice between a fixed or variable rate loan.


While variable rate loans generally have a lower interest rate than fixed rate loans, that rate may change. Variable rate loans are tied to a financial index, so they could increase and increase repayments and total repayment costs. With fixed rate loans, your rate and payment are guaranteed to stay the same for the life of the loan, so you take less risk.

The right time to refinance your loans depends on your situation. If you can qualify for a new loan at a lower rate, there is no bad time to refinance. But if you’re not able to get approved right now due to your credit, income, or other factors – or if you could only get a loan at a high rate – you might want to be waiting for your financial situation to improve.

Advantages and disadvantages of refinancing my student loans

If you can qualify to refinance private student loans at a lower rate than what you are currently paying, refinancing often has no downside. You will have to spend some time researching your options, but the internet has done apply for a refinance loan easy.

The only possible risk is that if you lengthen your repayment term, you could end up paying more total interest over time than with your current loan, even though your new loan has a lower rate. But this is easily avoided by choosing a loan with the same repayment schedule or a shorter term, or by making additional payments if you go for a longer term loan.


If you are considering refinancing federal student loans, however, there are considerable drawbacks. You will have to forgo the ability to change your repayment plan as needed; will have no deferral option when the government subsidizes interest; will have less flexibility in abstaining; will not have access to any income-based payment plan; and will waive any possibility of cancellation of the loan. You have to think very carefully before you refinance federal loans because of anything you are giving up.


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