Private student loan refinancing rates plunge after weeks of steady increases
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Rates for qualified borrowers using the Credible Market to refinance student loans have fallen for both 10-year fixed rate loans and 5-year variable rate loans.
For borrowers with a credit score of 720 or higher and who have used the Credible Marketplace to select a lender during the week of January 3, 2022:
- 10-year fixed-rate refinancing loans averaged 3.46%, down from 3.51% the week before and 3.83% a year ago. Ten-year rates rose for two straight weeks before dropping last week. Rates for that term hit their lowest point of 2021 during the week of November 22, when they were at 3.35%.
- The 5-year floating rate refinancing loan rates averaged 2.72%, down from 2.86% the week before and 3.30% a year ago. Five-year rates have climbed for four of the past six weeks before dropping last week. Rates for that term hit their lowest point of 2021 during the week of November 22, when they were at 2.41%.
Trends in weekly student loan refinancing rates
If you are curious about what type of student loan refinance rate you might be entitled to, you can use an online tool like Credible to compare options from different private lenders. Checking your rates will not affect your credit score.
Current student loan refinancing rates by FICO score
To alleviate the economic impacts of the COVID-19 pandemic, interest and payments on federal student loans have been suspended until at least May 1, 2022. As long as this relief is in place, there is little incentive to refinance federal student loans. But many borrowers with private student loans are taking advantage of the low interest rate environment to refinance their student debt at lower rates.
If you are eligible for refinancing your student loans, the interest rate you are offered may depend on factors such as your FICO score, the type of loan you are looking for (fixed or variable rate) and the loan repayment term. .
The chart above shows that good credit can help you get a lower rate and that the rates tend to be higher on loans with fixed interest rates and longer repayment terms. Since each lender has their own method of evaluating borrowers, it’s a good idea to ask for rates from multiple lenders so you can compare your options. A student loan refinance calculator can help you estimate how much you could save.
If you want to refinance with bad credit, you may need to apply with a co-signer. Or, you can work on improving your credit before you apply. Many lenders will allow children to refinance Parent PLUS loans in their own name after graduation.
You can use Credible to compare the rates of several private lenders at once without affecting your credit score.
How are student loan refinancing rates determined?
The rates applied by private lenders to refinance student loans depend in part on the economic situation and the interest rate environment, but also on the duration of the loan, the type of loan (fixed or variable rate), borrower’s credit and operating costs and the lender’s profit margin. .
Credible is a multi-lender marketplace that allows consumers to discover the financial products best suited to their unique circumstances. Credible’s integrations with major lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options – without putting their personal information at risk or affecting their credit score. The Credible Marketplace offers an unmatched customer experience as evidenced by more than 4,300 positive reviews on Trustpilot and a 4.7 / 5 Octoberscore.