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Average interest rates on 5-year refinanced graduate loans have fallen since two weeks ago, and 5-year undergraduate loans have remained the same, according to Credible. Rates on 10-year loans have not changed significantly from two weeks ago.
However, rates may increase significantly in the future. For the 2022-23 school year, federal student loan rates will rise by the highest amount since the 2005-06 year. These new rates will not have a direct impact on private student loan rates, but private rates may rise as they do not have to remain so low to be on par with federal loan rates.
5-year variable refinancing rates for student loans
Refinancing rates on 5-year variable-rate undergraduate student loans have remained the same over the past week, but are about 1% higher than six months ago.
The refinancing rates on 5-year variable graduate loans fell by 43 basis points.
10-year fixed refinancing rates for student loans
The rates on 10-year fixed undergraduate student loan refinancing have dropped slightly from two weeks ago. Undergraduate rates dropped by 20 basis points, while graduate rates increased by three basis points. Rates are almost 2% higher than a year ago.
Student loan interest rates by credit score
Your
credit score
a significant impact on the rates you get. You will often get a better rate the higher your credit score. Below we have listed the 10-year fixed student loan rates by credit score:
Why refinance a student loan?
You may be able to qualify for a better rate when refinancing your student loans. You will also be able to change from a fixed rate to a variable rate loan, or change your term length. By choosing a different term length, you may be able to split costs over a longer period of time for smaller monthly payments, although you will pay more in total interest.
How to refinance a student loan
Start the refinancing process by looking at your terms with different lenders. Review the offers and find out which rate and term length is best for you. When looking at your rates, lenders will usually perform a gentle credit check, which will not hurt your credit score.
You will need to apply for refinancing through a private student loan lender, as you will not be able to refinance a student loan through the federal government.
Once you have selected a company, you will complete its application and provide documents verifying your finances and identity. After the borrower has made his final offer, you must sign the agreement and accept the terms. Then your new borrower will repay your existing loan and you will be in the process of getting a new loan.
How do I know if I will be approved to refinance my student loan?
In general, the best barometer of loan approval is your credit score and history. Lenders like to see that you have a record of repaying your loans reliably, so the better your credit score, the greater the chance that you will also qualify for a low rate. In addition, most lenders will perform a soft credit check when you apply (which does not affect your credit score), so you can find out from an individual lender whether you will be approved without any harm to you.
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