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Average interest rates on refinanced undergraduate student loans have fallen significantly since last week, according to Credible. Graduate loans are relatively stable.
Even though rates are down this week, they have risen significantly since last year and are expected to continue to rise. Federal student loan rates for 2022-23 will rise the most in nearly two decades. These new rates won’t have a direct impact on private student loan rates, but private rates could go up because they don’t have to stay so low to be on par with federal loan rates.
Variable 5-Year Student Loan Refinance Rates
Undergraduate rates saw a major reversal this week, dropping to 3.80%, about half of what they were last week.
Graduate loan rates fell 28 basis points last week and now sit at 2.75%.
Fixed 10-Year Student Loan Refinance Rates
Rates on 10-year undergraduate fixed loans fell to 5.82%, down from last week’s high over the past year.
Graduation rates are largely stable, changing only four basis points.
Student loan interest rates by credit score
Your interest rate will often improve with a better credit score – we show this in the table below. We give you the 10-year fixed student loan rates by credit score:
Frequently Asked Questions
If you refinance your federal student loans, you will not be eligible for a rebate. President Joe Biden said in August the government would forgive up to $10,000 in student debt for borrowers earning less than $125,000 a year and up to $20,000 for Pell Grant recipients. Married couples or heads of households who earn less than $250,000 will also be eligible for the rebate.
All types of federal loans will be eligible for forgiveness, but private student loans will not.
While refinancing federal student loans might seem like a good idea if you get a better interest rate, it disqualifies you from loan forgiveness — on a large scale and through programs like public service loan forgiveness. .
Refinancing your student loans can earn you a lower rate. You can also switch from a fixed rate loan to a variable rate loan or change the term of your loan. Choosing a new term can allow you to spread the costs over an extended period for smaller monthly payments, although you’ll pay more total interest.
A five-year loan term could be a great choice if you want a better interest rate and are able to pay off your loan just as quickly. You’ll save money in interest and free up money to reach your other financial goals faster.
A 10-year loan term will cost you more overall, but you’ll make lower monthly payments. This can make it easier for you to repay your loan if your budget is tight.