Graduates can save more money than ever as fixed student loan refinance rates set record low

Fixed student loan refinance rates hit a new record low in the week of December 13th, meaning borrowers have the option to cut their monthly payments, pay off their loans faster, and save more money on their college debt. (iStock)

Fixed student loan refinancing rates have fallen to a new record low, giving borrowers the opportunity to save more money than ever on their student debt.

The interest rates on 10-year fixed-rate refinancing loans averaged 3.33% for the week of December 13, according to Credible. This is the lowest fixed rate on student loans since Credible began collecting this data in June 2020.


The variable interest rates for the 5-year refinancing period rose significantly to 2.82% in the same week. Still, the floating rate is much lower than at the same time last year, when it averaged 3.20%.

With student loan refinancing rates at all-time lows, student loan borrowers have the option to reduce their monthly payments, pay off their debts faster, and save money on overall borrowing costs over the life of the loan.

Read on to learn more about refinancing on a private student loan. Search the student loan refinance rates from private lenders in the table below and visit Credible to see refinance offers tailored to your needs without compromising your creditworthiness.


How to Qualify for Student Loan Refinance

When you refinance your student loan, you take out a new loan to repay your current student debt on better terms, such as a lower interest rate. There are many private student loan lenders who offer refinancing and the process can be done entirely online.

When you refinance your student loan debt, your loan amount will stay the same, but your other terms are likely to change. It may also be possible to convert all of your loans into one monthly payment with Student Loan Consolidation. You can choose a shorter loan term to pay off your student debt faster, or you can opt for a longer term loan to lower your monthly payments.

Private student loan lenders determine your interest rate based on a number of eligibility criteria, including:

  • Responsible financial history. Borrowers with good credit scores and low debt to income ratios have the best chance of qualifying for a student loan refinance at a low interest rate. Bad credit borrowers may consider enlisting the help of a creditworthy co-signer to qualify for the student loan refinance.
  • Loan repayment terms. Larger loans may come with higher interest rates – plus, you will pay more interest over time as they are valued at a larger amount. Shorter loans usually offer lower interest rates, while longer loan terms cost more loans over time.
  • Type of interest rate. Fixed-rate loans usually come with higher interest rates because borrowers can set their interest rate for the entire term of the loan. Floating rate loans typically offer lower interest rates that can rise or fall over the life of the loan depending on market conditions.

You can compare student loan rates on Credible for free with a soft credit pull and then use a student loan calculator to determine how much you can save with a refinance.


Should You Refinance Federal Student Loans?

Refinancing can help some borrowers set a lower interest rate on their college debt, but there are a few things federal student loan borrowers should know before switching to a private loan.

The interest rates are set differently. State student loan interest rates are set for all borrowers based on when the loan was made, while private student loan interest rates vary by lender based on the borrower’s creditworthiness. In addition, private lenders tend to offer discounts, such as: B. an interest rate cut for setting up automatic payments (sometimes called an autopay rebate).

Borrowers with high creditworthiness and low debt-to-income ratios can qualify for a lower interest rate through a private lender, but the rate is dependent on the fixed federal student loan rate at the time the loan is disbursed. Here are the current federal student loan interest rates for loans paid out between July 1, 2021 and June 30, 2022:

  • Direct loans for Bachelor courses: 3.73%
  • Direct loans for graduates: 5.28%
  • Direct PLUS loans for parents and graduates: 6.28%


Private lenders for student loans do not charge any refinancing fees. When you took out your federal loan, you likely had to pay a one-time loan fee that was part of the total loan amount. Federal direct loans paid out on or after October 1, 2020 were charged a 1.057% loan fee. Direkt PLUS loans disbursed in the same period have a loan fee of 4.228%

Private student loans are not eligible for state benefits. By refinancing into a private student loan, federal student loan borrowers forego multiple federal loan safeguards such as income-based repayment plans, administrative forbearance, and select student loan relief programs. Federal student loan payments are currently on hold until May 1, 2022, which means that refinancing your federal loan into a private loan would now mean that you will have to resume monthly payments once approved.

Still, it might be wise to set a refinancing rate on private student loans while interest rates are at record lows. Visit Credible to view your student loan refinance offers so you can determine if it is worth refinancing your federal student loan debt.


Do you have a question about finance but don’t know who to contact? Send an email to the credible money expert at and your question could be answered by Credible in our Money Expert section.

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