Still time to save: Student loan refinancing rates are falling for 5-year floating rate loans

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

Rates for well-qualified borrowers using the Credible marketplace to refinance student loans fell this week for 5-year floating-rate loans, while rates for 10-year fixed-rate loans rose.

For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender during the week of November 28, 2022:

  • Rates for 10-year fixed rate refinancing loans averaged 6.21%, up from 5.76% the week before and up from 3.40% a year ago. Rates for this term reached their lowest point of 2022 to date in the week of Jan. 10, when they stood at 3.44%.
  • The interest rate on 5-year floating rate refinancing loans averaged 3.89%, down from 3.93% the week before and up from 2.49% a year ago. Rates for this term reached their lowest point of 2022 so far on the week of July 4, when they stood at 2.51%.

Weekly Student Loan Refinancing Rate Trends

If you are curious about the student loan refinance rates you qualify for, you can use an online tool like Credible to compare options from different private lenders. Checking your rates will not affect your credit score.

Current student loan refinancing rates by FICO score

To provide relief from the economic impact of the COVID-19 pandemic, interest and payments on federal student loans have been suspended until at least June 30, 2023. While that relief is in place, there is little reason to refinance federal student loans. But many private student loan borrowers are taking advantage of the low interest rates to refinance their student debt at lower rates.

If you’re eligible to refinance your student loans, the interest rate you’re offered may depend on factors such as your FICO score, the type of loan you’re seeking (fixed or floating rate), and the loan’s repayment term.

The chart above shows that good credit can help you get a lower interest rate and that rates tend to be higher for loans with fixed interest rates and longer repayment terms. Because each lender has its own method of evaluating borrowers, it’s a good idea to request rates from multiple lenders so you can compare your options. A student loan refinancing calculator can help you estimate how much you can save.

If you want refinance with bad credit, you may need to submit an application to a co-signer. Or you can work on improving your credit before you sign up. Many lenders allow children to refinance parents’ PLUS loans in their own name after graduation.

You can use Credible to compare rates from multiple private lenders at once without impacting your credit score.

How student loan refinancing rates are determined

The rates that private lenders charge to refinance student loans depend in part on the economy and interest rate environment, but also on the term of the loan, the type of loan (fixed or variable rate), the borrower’s creditworthiness and operating costs and the lender’s profit margin.

About believable

Credible is a multi-lender marketplace that empowers consumers to discover financial products that best suit their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options – without compromising their personal information or impacting their credit score. The Credible marketplace offers an unparalleled customer experience, as evidenced by over 5,000+ positive Trustpilot reviews and a TrustScore of 4.7/5.

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