Fixed student loan refinancing rates set new record
There has never been a better time to refinance your fixed rate student loan on better terms.
Fixed student loan refinancing rates set a new record for the week of December 13, reaching 3.33% for well-qualified borrowers who chose the 10-year term, according to data from Credible. This beats the previous record of 3.35% set during the week of November 22.
Refinancing at a lower student loan rate can help you lower your monthly payments, pay off debt faster, and save money on interest over the life of the loan.
Keep reading to learn more about the latest trends in student loan refinancing rates, as well as how to lock in a record interest rate on your college debt. You can browse current rates from real private lenders in the table below and visit Credible to see your estimated rate for free without affecting your credit score.
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Fixed student loan refinancing rates at record highs as variable rates rise
If you are considering refinancing your student loan debt into a new fixed rate loan, now is a great time to do so.
In addition to hitting a record low of 3.33%, fixed interest rates over the refinancing term of 10-year student loans have also declined significantly from the same period last year, as they stood at 3.86%.
However, variable rates on 5-year refinance loans edged up to 2.82% during the week of December 13, from 2.75% the week before.. Average variable rates are, however, down considerably from the same period last year, when they averaged 3.20%.
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Keep in mind that refinancing your federal student loans to a private loan will make you ineligible for certain government benefits, such as administrative forbearance, income-based repayment plans, and student loan cancellation programs.
If you decide to refinance your student loan debt into a new loan with better terms, visit Credible to compare the refinancing rates of several private lenders. Then use a student loan refinance calculator to determine if this debt repayment option is right for you.
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How to lock in a low interest rate on a student loan
While private student loan refinance rates are near their historic lows, the rate you ultimately receive depends on a number of factors. Lenders determine student loan refinancing rates and eligibility based on the following criteria:
- The borrower’s credit history. Borrowers with good credit will be eligible for the lowest possible student loan refinance rates. Borrowers with bad credit may consider hiring a creditworthy co-signer to improve their chances of being approved for a low-rate loan.
- The conditions of the loan. Large loans with longer repayment plans tend to have higher interest rates, while shorter loans with smaller balances carry lower rates. Longer loans also tend to have lower monthly payments, while shorter loans can help you pay off your debt faster.
- The rate type (fixed or variable). While fixed rates are locked in for the term of the loan, variable interest rates can fluctuate over time with the market index.
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Since student loan refinance rates and eligibility requirements can vary from lender to lender, it is important to compare the refinancing offers of multiple lenders. Most student lenders allow you to pre-qualify to see your estimated rates with a soft credit application, that does not affect your credit score.
You can view your pre-qualified loan repayment offers from Credible’s partner lenders for free by filling out a single form within minutes. This way, you can find the lowest possible rates for your financial situation without risk.
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