Student Loan Refinance Rates: November 21, 2022—Loan Rates Slip

Student Loan Refinance Rates: November 21, 2022—loan Rates Slip

Last week, the average interest rate on refinanced student loans dropped. Yet for many borrowers, it could still be a good time to refinance. Rates are still relatively low.

According to, from November 14 to November 19, the average fixed interest rate on a 10-year refinance loan was 5.98%. It was 4.01% on a five-year variable-rate loan. That’s for borrowers with a credit score of 720 or higher who prequalified on’s student loan marketplace.

Related:  Best Student Loan Refinance Lenders

Fixed-rate Loans

Last week, the average fixed rate on 10-year refinance loans slipped by 0.09% to 5.98%. The week prior, the average stood at 6.07%.

At this time last year, the average fixed rate on a 10-year refinance loan was 3.44%, or 2.54% lower than today’s rate. That means that borrowers who refinance now have the chance to lock in a rate that’s significantly lower than they would have received at this time last year.

If you were to refinance $20,000 in student loans to today’s average fixed rate, you’d pay around $222 per month and approximately $6,621 in total interest over 10 years, according to Forbes Advisor’s student loan calculator.

Variable-rate Loans

The average rate on five-year variable student refinance loans moved up by 0.85% last week. Now it sits at 4.01%.

In contrast to fixed rates, variable interest rates fluctuate over the course of a loan term according to market conditions and the index they’re tied to. Many refinance lenders recalculate rates monthly for borrowers with variable-rate loans, but they typically limit how high the rate can go—to 18%, for instance.

Let’s say you refinanced an existing $20,000 loan to a five-year loan with a variable interest rate of 4.01%. You’d pay about $368 on average per month. You’d pay approximately $2,105 in total interest over the life of the loan. Keep in mind that since the interest is variable, it could fluctuate up or down from month to month.

Related: Should You Refinance Student Loans?

When to Refinance Student Loans

Lenders generally require you to complete your degree before refinancing. Though it’s possible to find a lender without this requirement, in most cases, you’ll want to wait to refinance until after you’ve graduated.

Keep in mind that to get the lowest interest rates, you’ll need a good or excellent credit score.

If your credit is poor or your income isn’t high enough to qualify, you have a couple of options. You can wait to refinance until you’ve built credit or you have enough income. Or, you can get a co-signer. Just make sure that the co-signer knows that if you can’t make student loan payments, they’ll be responsible. The loan will appear on their credit report.

Finally, make sure you can save enough money to justify refinancing. At today’s rates, most borrowers with high credit scores can benefit from refinancing. But those with less-than-great credit who won’t receive the lowest fixed or variable interest rates may not. Start by exploring rates you could prequalify for via multiple lenders, then calculate your potential savings.

Refinancing Student Loans: What Else to Consider

Something to keep in mind when refinancing federal student loans to private student loans is that you’ll lose many federal loan benefit, like income-driven repayment plans and generous deferment and forbearance options.

You may not need these programs if you have a stable income and plan to pay off your loan quickly. But make sure you won’t need these programs if you’re thinking about refinancing federal student loans.

If you do need the benefits of those programs, you could refinance only your private loans or just a portion of your federal loans.

Comparing Student Loan Refinancing Rates

Refinancing a student loan at the lowest possible interest rate is one of the best ways to reduce the amount of interest you’ll pay over the life of the loan.

Variable rates typically start low, but they could rise in the future, making them a gamble. But one way to limit your risk exposure is to pay off your new refinance loan as fast as possible. Choose as short a loan term as you can manage, and pay extra when possible so that you’re not subject to potential rate increases in the future.

When considering your options, compare rates across multiple student loan refinancing lenders to ensure you’re not missing out on possible savings. Explore whether you qualify for additional interest rate discounts, potentially by choosing automatic payments or by having an existing financial account with a lender.

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