This week’s student loan refinance rate: July 5, 2022
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According to Credible, average interest rates on 5-year refinanced undergraduate student loans have been rising for the past two weeks, and 5-year graduate student loans have also increased. Rates on 10-year loans haven’t changed much in two weeks.
Rates may continue to rise. For the 2022-23 school year, federal student loan rates will increase by the highest amount since 2005-06. These new rates won’t directly impact private student loan rates, but private rates may go up because they don’t have to stay so low to be on par with federal loan rates.
Variable 5-Year Student Loan Refinance Rates
5-year variable rate student loan refinance rates rose last week, rising 66 basis points from two weeks ago to 4.67%.
5-year variable graduate loan refinance rates also jumped, topping 1%.
Fixed 10-Year Student Loan Refinance Rates
Refinance rates on 10-year fixed undergraduate student loans have increased slightly from two weeks ago. Undergraduate rates rose two basis points, while graduate rates fell two basis points. Rates have risen considerably over the past year.
Student loan interest rates by credit score
How do I know if I will be approved to refinance my student loan?
Generally, the best barometer of loan approval is your credit score and history. Lenders like to see that you have a history of consistently repaying your loans on time, so the better your credit history, the more likely you are to qualify for a low rate. Also, most lenders will perform 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 be approved without you. make of bad.
How to refinance a student loan
Start the refinancing process by reviewing your terms with different lenders. Review the offers and determine the rate and term that suits you best. When you check your rates, lenders usually do a soft credit check, which doesn’t hurt your credit score.
You will need to apply for refinancing through a private student lender because you cannot refinance a student loan through the federal government.
Once you have chosen a company, you will complete their application and provide documentation proving your finances and identity. Once the lender has made their final offer, you will need to sign the agreement and agree to the terms. Then your new lender will pay off your existing loan and you’ll be ready to start with a new loan.
Loan over 5 years vs 10 years
If you want a better interest rate and are financially able to pay off your loan quickly, a 5-year loan could be a great choice. You’ll save money in interest and free up money to reach your other financial goals faster.
A 10-year loan term will cost you more overall, but you’ll make lower monthly payments. This can make it easier for you to repay your loan if your budget is tight.