Student Loan Refinance Rates This Week: May 17, 2022

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Some interest rates for refinanced student loans fell last week, while others were flat, according to Credible. But like interest rates on many types of loans, student loan rates have risen since the end of 2021 overall.

Interest rates on private student loans are typically timed with a variable index rate and borrowers’ credit scores. Mark Kantrowitz, president of PrivateStudentLoans.guru, says lenders can wait to change rates significantly until they see where federal loan rates are in July. This could help businesses decide what interest rates to charge so they can get a better rate than Parent PLUS loans, for example.

Kantrowitz thinks rates will start to rise in June.

5-Year Variable Student Loan Refinance Rates

The average refinance rate on 5-year variable undergraduate student loans has dropped significantly from two weeks ago and now stands at 3.46%. It is now comparable to the rate of 3.29% a year ago.

On the other hand, 5-year graduate loan variable refinance rates are up almost 2% compared to two weeks ago.

Fixed 10 Year Student Loan Refinance Rates

Refinancing rates on 10-year fixed student loans haven’t changed much from two weeks ago, but they’ve spiked in the last six months.

Graduate loan rates are slightly higher than they were two weeks ago. But like undergraduate rates, they have increased since November.

Student loan interest rates by credit score

Their

credit score

it has a substantial effect on the rate you’ll receive when you refinance. Generally, the higher your credit score, the lower the rate you will receive. Here’s a list of 10-year student loan fixed rates by credit score:

Why refinance a student loan?

You may qualify for a lower rate when you refinance your student loans. You will also be able to change from a variable rate loan to a fixed rate loan, or change the length of your term. By choosing a different term length, you may be able to spread payments over a longer period of time for smaller monthly payments, even though you’ll pay more in total interest.

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 reliable history of paying your loans on time, so the better your credit score, the more likely you are to qualify for a low rate, too. 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 do I choose between a fixed rate or a variable rate loan?

Both types of loans make sense for different borrowers.

A fixed-rate student loan has a fixed interest rate for the life of your loan. The rate you get when you get 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 the lender will change regularly during the term of your loan. Lenders typically tie this rate to specific market benchmarks that the fed funds rate often has an impact on. Variable rates can start out lower than fixed rates, but can increase significantly over the life of your loan.

Ryan Wangman, CEPF

Junior Loan Reporter

Ryan Wangman is a junior reporter at Personal Finance Insider reporting on personal loans, student loans, student loan refinancing, debt consolidation, auto loans, RV loans, and boat loans. He is also a Certified Educator in Personal Finance (CEPF).
In her previous experience writing about personal finance, she has written about credit scores, financial literacy, and home ownership. He is a graduate of Northwestern University and has previously written for The Boston Globe.
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