Rates rise for private student loan refinances, but still lower than same time last year

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The latest trends in student loan refinancing interest rates from the Credible marketplace, updated weekly. (iStock)

The prices for well-qualified borrowers who use the Credible marketplace to refinance student loans have crept in for both 10-year fixed rate loans and 5-year variable rate loans.

For borrowers with a credit score of 720 or greater who used the Credible marketplace to select a lender in the week of December 27, 2021:

  • The interest rates on 10-year fixed rate refinance loans averaged 3.51%, down from 3.44% the previous week and lower than 3.85% a year ago. Interest rates on this term hit their lowest point of 2021 in the week of November 22nd, when they stood at 3.35%.
  • The interest rates on 5-year floating rate refinancing loans averaged 2.86%, down from 2.82% the previous week and down from 3.34% a year ago. Interest rates on this term hit their lowest point of 2021 in the week of November 22nd when they stood at 2.41%.

Weekly interest rate development when refinancing student loans

If you want to know what refinance rates you can qualify for on student loans, you can use an online tool like Credible to compare the options of different private lenders. Checking your rates doesn’t affect your creditworthiness.

Current FICO Score Refinancing Rates for Student Loans

To mitigate the economic impact 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 exists, 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 educational debts more cheaply.

If you qualify for your student loan refinance, the interest rate you are offered may depend on factors such as your FICO score, the type of loan you want (fixed or variable rate), and the length of the loan.

The graph above shows that good credit can help you get a lower interest rate, and that fixed-rate loans with longer repayment periods tend to have higher interest rates. Since each lender has their own method of evaluating borrowers, it is a good idea to obtain rates from multiple lenders so that you can compare your options. A student loan refinance calculator can help you estimate how much you could save.

If you want to refinance yourself with bad credit, you may need to apply for a signatory. Or, you can work on improving your credit score before applying. Many lenders allow children to refinance Parent PLUS loans on their own behalf after graduation.

You can use Credible to compare the rates of multiple private lenders at the same time without affecting your creditworthiness.

This is how the interest rates for refinancing student loans are determined

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

About believable

Credible is a multi-lender marketplace that enables consumers to discover financial products that are best suited to their particular circumstances. Credible’s integration with leading lenders and credit bureaus enables consumers to quickly compare accurate, personalized credit options – without compromising their personal information or compromising their creditworthiness. The Credible marketplace offers an incomparable customer experience, which is reflected in over 4,300 positive Trustpilot reviews and a TrustScore of 4.7 / 5.

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