Fixed-rate student loan refinancing rates tick up, still hover near yearly lows

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

Interest rates for well-qualified borrowers who use the Credible marketplace to refinance student loans into 10-year fixed-rate loans rose slightly in the week of June 28, 2021. Still, 10-year rates remain a bargain compared to earlier this year, averaging 3.83%

For borrowers with a credit score of 720 or greater who used the Credible marketplace to select a lender, in the week of June 28th:

  • The interest rates on 10-year fixed-rate loans averaged 3.65%, down from 3.58% the previous week and below 4.37% a year ago. Interest rates hit a record low in the week of June 14, 2021.
  • The interest rates on 5-year floating rate loans averaged 3.04%, down from 2.94% the previous week and 2.63% a year ago. Floating rate loans were at their lowest level for the year in the week of June 14, 2021.

Weekly interest rate development when refinancing student loans

If you’re curious about what refinance rates you can qualify for on student loans, you can use an online tool like Credible to compare the options of different private lenders. Checking your rates doesn’t affect your creditworthiness.

Current FICO Score Refinancing Rates for Student Loans

To ease the economic impact of the COVID-19 pandemic, interest and payments on federal student loans have been suspended until at least September 30, 2021. As long as these facilities exist, there is little incentive to refinance federal student loans. But many borrowers with private student loans are taking advantage of the low interest rate environment to refinance their educational debts more cheaply.

If you qualify for your student loan refinance, the interest rate that you are offered may depend on factors such as your FICO score, the type of loan you are looking for (fixed or variable rate), and the length of the loan.

The graph above shows that good credit can help you get a lower interest rate, and that fixed-rate, longer-term loans tend to have higher rates. Since each lender has their own method of evaluating borrowers, it is a good idea to request rates from multiple lenders so that you can compare your options. A student loan refinance calculator can help you estimate how much you could save.

If you want to refinance with bad credit, you may need to apply to a co-signer. Or, you can work on improving your credit rating before applying. Many lenders allow children to refinance Parent PLUS loans on their own behalf after graduation.

You can use Credible to compare rates from multiple private lenders at the same time without affecting your creditworthiness.

This is how the interest rates for the refinancing of student loans are determined

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

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Credible is a multi-lender marketplace that enables consumers to discover financial products that are best suited to their particular circumstances. Credible’s integration with leading lenders and credit bureaus enables consumers to quickly compare accurate, personalized credit options – without compromising their personal information or compromising their creditworthiness. The Credible marketplace offers an incomparable customer experience, which is reflected in over 4,300 positive Trustpilot reviews and a TrustScore of 4.7 / 5.