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Rates plunge for private student loan refinances following weeks of steady increases

Rates slip for 10-year fixed private student loans
Written by Publishing Team

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Latest trends in student loan refinancing interest rates from Credible Market, updated weekly. (iStock)

Interest rates have decreased for well-qualified borrowers using the Credibility Market to refinance student loans for both 10-year fixed-rate loans and 5-year variable-rate loans.

For borrowers with a credit score of 720 or higher who used the Credibility Market to select a lender during the week of January 3, 2022:

  • Average interest rates on 10-year fixed-rate refinancing loans were 3.46%, down from 3.51% the previous week and 3.83% a year ago. Ten-year interest rates rose for two consecutive weeks before falling last week. Rates for this quarter hit their lowest level in 2021 during the week of November 22, when they were at 3.35%.
  • Average interest rates on 5-year variable refinancing loans were 2.72%, down from 2.86% the previous week and 3.30% a year ago. Five-year interest rates rose for four out of six weeks before falling last week. Rates for this quarter hit their lowest level in 2021 during the week of November 22, when they were at 2.41%.

Weekly interest rate trends for student loan refinancing

If you are interested in knowing what kind of student loan refinancing rates you may qualify for, 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 Refinance Rates by FICO درجة Score

To provide relief from the economic effects 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 education debt at lower rates.

If you qualify to refinance your student loans, the interest rate that may be offered to you can depend on factors such as your FICO score, the type of loan you are looking for (fixed or variable rate) and the tenure of the loan.

The chart above shows that good credit can help you get a lower rate and that rates tend to be higher on loans with fixed interest rates and longer repayment terms. Since each lender has their own way of evaluating borrowers, it is a good idea to ask rates from several lenders so you can compare your options. A student loan refinancing calculator can help you estimate how much you might save.

If you want to refinance with bad credit, you may need to apply with a cosigner. Or you can work on improving your credit before applying. Many child lenders will allow Parent PLUS loans to be refinanced in their name after graduation.

You can use Credibility to compare rates from several private lenders at once without affecting your credit score.

How are student loan refinancing rates determined?

The rates that private lenders charge for student loan refinancing depend in part on the economy and interest rate environment, but also on the term of the loan, the type of loan (fixed or variable rate), the borrower’s credit, the lender’s operating costs and profit margin.

about credibility

Credible is a multi-lender marketplace that enables consumers to discover financial products best suited to their unique circumstances. Credible’s integration with major lenders and credit bureaus allows consumers to quickly compare personal and accurate loan options – without jeopardizing their personal information or affecting their credit score. Credibility Marketplace provides an unparalleled customer experience, as evidenced by over 4,300 positive Trustpilot reviews and a TrustScore score of 4.7/5.

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