This Week’s Student Loan Refinancing Rates: October 18, 2022

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According Credible. 10-year loan rates are about flat and five-year variable loan rates for graduates are falling.

Five-year undergraduate student loan rate trends indicate a large-scale increase in rates across the board. Federal student loan rates for 2022-23 will rise the most in nearly two decades. These new rates won’t directly impact private student loan rates, but private rates could go up because they don’t have to stay so low to match federal loan rates.

Variable 5-Year Student Loan Refinance Rates

Last week, borrowers looking to refinance a 5-year undergraduate loan faced much higher rates than the previous week. Rates climbed more than 4.5% and are at their highest level in a year. This significantly increases loan costs for these borrowers.

On the positive side, graduation rates are down about 89 basis points from two weeks ago, and are also lower than they were six months ago.

Fixed 10-Year Student Loan Refinance Rates

While 5-year undergraduate loan rates have oscillated considerably, 10-year undergraduate loan rates have remained stable, unchanged over the past week. Graduate loan rates wobbled only slightly, rising two basis points.

Student loan interest rates by credit score

Your interest rate will generally improve with a better credit score. The table below shows 10-year fixed student loan rates by credit score:

Frequently Asked Questions

You may qualify for a better rate when you refinance your student loans. You can also switch from a fixed rate loan to a variable rate loan or change the term. By choosing a different term, you may be able to spread the costs over an extended period for smaller monthly payments, even though you will pay more total interest.

In the short term, yes. When you apply for a new loan, lenders will do a thorough investigation to check your credit history, which will affect your credit score a bit.

Also, when you refinance, your original loan is closed and a new one is opened. Since part of your credit score is based on your payment history, your credit score may suffer as you work to establish a new track record of reliable payments.

Your credit history is the most important factor in your chances of refinancing approval. If you have a bad credit score, it will be more difficult for you to get the green light for a new loan, but you may be able to hire a co-signer to increase your chances of approval.

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