Refinancing rates for these student loans are declining. Should I refile now?

The average interest rate for refinancing student loans to 10-year fixed rate loans is 5.68%, down from 5.80% a week ago. Meanwhile, rates on five-year variable-rate loans edged up to 3.73%, according to data from personal finance company Credible, which prequalified in the student loan market in the week ending Aug. 28. Above, the interest rates were 5.43% on his 10-year fixed loan and 3.63% on his 5-year variable loan. (You can check the lowest available rates here.)

Federal loan repayments are suspended until January 2023 and certain borrowers are eligible for debt forgiveness of up to $20,000, but today’s low interest rates on student loans have made many borrowers interested in refinancing. I have. While it may make sense for those with private student loans, it doesn’t make much sense for those with federal loans.

To refinance student loans, borrowers take advantage of new private loans to pay off existing public loans. This means that federal protections that come with federal loans, such as moratorium on current loan payments, government-issued loan forgiveness, and income-driven repayment opt-ins, will be lost. Even if you’re not using it now, pros say consider using it in the future. Additionally, if a borrower is currently on Federal Student Loan Forbearance, which suspends all federal student loan payments through January 2023, it makes sense to wait until the end of that period to refinance. It is fulfilled.

However, if you have a private student loan, it’s easy to decide to refinance, assuming you can get better interest rates and terms. If you are planning to refinance a private student loan because your credit has improved, or your financial situation has changed and you are now able to get a more attractive interest rate or shorten the loan term. , may benefit from refinancing.