This week’s student loan refinance rate: August 9, 2022

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According to Credible, average interest rates on refinanced graduate student loans have been falling for the past two weeks. On the other hand, undergraduate rates are up on 5-year and 10-year loans.

Although graduation rates fell last week, rates have generally been on the rise since last year, and there is a strong possibility that they will continue to rise in the future. 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

Undergraduate loan rates rose 76 basis points last week and have soared nearly 3% over the past year.

On the positive side, graduation rates have fallen 50 basis points and are only marginally higher than they were at this point 12 months ago.

Fixed 10-Year Student Loan Refinance Rates

Undergraduate rates on 10-year fixed loans have risen a hair’s breadth since last week, while graduate rates have fallen slightly. Undergraduate rates are up 10 basis points.

Graduation rates fell 15 basis points, although they are still up more than 2% from six months ago.

Student loan interest rates by credit score

You’ll usually get a better interest rate with a higher credit score – you can see that in the table below. We show you the 10-year fixed student loan rates by credit score:

Top Choices for Private Student Loan Refinancing

There are many options for refinancing your student loans. To help you start your search, we’ve highlighted a few of our favorite refinance options, along with their rates, pros, and cons.

Costs

Late fee or $38 or 5% of payment, whichever is less

Regular APR

Variable: 1.64% – 5.95%, Fixed: 3.24% – 6.05%

Loan amount range

$5,000 with no maximum

Costs

Late fee or $38 or 5% of payment, whichever is less

Regular APR

Variable: 1.64% – 5.95%, Fixed: 3.24% – 6.05%

Loan amount range

$5,000 with no maximum

Advantages

  • Low fixed rates
  • Seven-day-a-week customer service
  • Mobile app
  • Multiple repayment terms
  • Interest rate reductions

The inconvenients

  • Late fee
  • Variable rates are slightly higher than competitors

More information

  • Five, seven, 10, 15 and 20 year repayment terms available
  • Customer service available by phone, live chat and email
  • Minimum loan of $5,000, no maximum
  • Late fee of 5% of late payment or $28, whichever is less
  • 0.25% introductory cashback for three months when you open a checking account with Laurel Road, then 0.25% cashback for $2,500 to $7,499 in monthly direct deposits, 0.55% cashback for 7,500 $ and more
  • Loans are offered by KeyBank, Member FDIC

Regular APR

Variable: 2.15% – 8.40%, Fixed: 3.49% – 7.99%

Loan amount range

$5,000 until full balance

Regular APR

Variable: 2.15% – 8.40%, Fixed: 3.49% – 7.99%

Loan amount range

$5,000 until full balance

Advantages

  • No maximum balance you can refinance
  • Low minimum interest rate
  • Automatic payment discount
  • No setup fees or prepayment penalties
  • Unemployment protection

The inconvenients

  • Late charge
  • Third party loan agent

More information

  • 0.25% autopay discount
  • $5 late fee
  • Apply via your computer or mobile device
  • Customer service available by phone, email and social networks
  • Loan amount of $5,000 to full balance
  • Term lengths of five, seven, 10, 15 and 20 years
  • Unemployment protection provides up to 12 months of loan forbearance to eligible borrowers who lose their jobs through no fault of their own
  • Loans are managed by a third-party MOHELA affiliate

Regular APR

Fixed: 6.74% – 8.93%

Loan amount range

$7,500 to $500,000

Regular APR

Fixed: 6.74% – 8.93%

Loan amount range

$7,500 to $500,000

Advantages

  • Low maximum APR
  • No assembly costs
  • No prepayment penalty

The inconvenients

  • No variable rate loan
  • Late charge
  • Need to be a member to get a loan
  • Higher minimum loan amount than competitors

More information

  • Repayment term of 5, 8, 12 or 15 years
  • The loan amount varies between $7,500 and $500,000
  • $29 late fee
  • Customer service available by phone, email or via chatbat
  • Loans issued by the Pentagon Federal Credit Union

Check out our top picks and more in our guide to the best student loan refinance companies.

Why refinance a student loan?

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.

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, as 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.

What is the difference between a 5 year loan and a 10 year loan?

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.

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