Student Loan Refinance Rates: November 8, 2022—Loan Rates Move Down

Student Loan Refinance Rates: November 8, 2022—loan Rates Move Down

Last week, the average interest rate on refinanced student loans inched down. Overall, rates remain low, making refinancing a student loan a worthwhile option for borrowers.

For borrowers with a credit score of 720 or higher who prequalified on’s student loan marketplace from October 31 to November 5, the average fixed interest rate on a 10-year refinance loan was 5.71%. On a five-year variable-rate loan, the rate was 2.95%, according to

Related:  Best Student Loan Refinance Lenders

Fixed-rate Loans

Last week, the average fixed rate on 10-year refinance loans dropped by 0.03% to 5.71%. The week prior, the average stood at 5.74%.

Because fixed interest rates don’t change throughout a borrower’s loan term, it’s possible to lock in a rate that’s considerably lower than you would have received at this time last year. The average fixed rate on a 10-year refinance loan at this time last year was 3.48%, or 2.23% lower than today’s rate.

A borrower who refinances $20,000 in student loans to today’s average fixed rate would pay around $219 per month and approximately $6,297 in total interest over 10 years, according to Forbes Advisor’s student loan calculator.

Variable-rate Loans

Average variable rates on five-year refinance loans moved down last week to 2.95% on average from 3.31%.

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.

If you were to refinance an existing $20,000 loan to a five-year loan at a variable interest rate of 2.95%, you’d pay approximately $359 on average per month. In total interest over the life of the loan, you’d pay around $1,536. Of course, since the interest rate is variable, it could fluctuate up or down from month to month.

Related: Should You Refinance Student Loans?

When Should You 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.

Using a co-signer is one option for those who don’t have strong enough credit or income to qualify for a refinance loan. Alternatively, you could wait until your credit and income is stronger. If you decide to use a co-signer, make sure they’re aware that they’ll be responsible for payments if you’re not able to for some reason. The loan will also appear on their credit report.

It’s important to make sure you’ll save enough money when refinancing. While many borrowers with solid credit scores could benefit from refinancing at today’s interest rates, those with poorer credit won’t receive the lowest rates available.

Do the math to see if refinancing will benefit your situation. Shop around for rates and then calculate what you could save.

What To Consider When 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.

While variable rates may start out low, 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.

Refinancing Student Loans: What Else to Consider

When you refinance federal student loans to a private loan means you’ll lose access to some federal loan benefits. You’ll no longer have access to features like:

You may not need these programs if you have stable income and you plan to quickly pay off your loan. 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.

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