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Find out if qualifying for lower interest rates for education loans can help you achieve better loan repayment terms. (iStock)
If you’re considering refinancing to save on your student loan debt, now is the perfect time. That’s because student loan refinancing rates have fallen to all-time lows, according to reliable data.
The average interest rate on 10-year fixed-rate student loans fell to 3.35% in the week of November 22nd. This is down from his 3.95% a year ago. The five-year floating rate student loan refinance rate is even lower at 2.41% compared to last year’s 3.14%.
Continue reading to learn more about student loan refinancing to decide if this option is right for you. Free to compare.
Student Loan Refinancing VS. Loan Consolidation: What’s the Difference?
How to determine if a student loan refinance is right for you
Student loan refinancing helps borrowers pay lower monthly payments, pay off debt faster, and save interest over the life of the loan. Still, you should consider your own financial situation to determine if this repayment option is beneficial for your needs.
Here’s how to know if you need a student loan refinance.
- Gather current loan documents. You will want to know the loan type, monthly payment, interest rate, loan balance and remaining repayment period. You should also check your credit report to know where you stand.
- Get prequalified to see potential repayment terms. Using a process called prequalification, you can view estimated student loan refinancing rates without affecting your credit score. In this way, new loan terms can be viewed without stringent credit checks.
- use student loan refinance calculator to estimate your savings. See how changing the repayment period or loan type (such as variable or fixed rate) affects your overall interest expense and monthly payments.
Refinancing federal student loans with private student loans also makes them ineligible for certain government protections and benefits, such as income-based repayment plans, federal forbearance options, and some student loan forgiveness programs. It is also important to note that
View current student loan interest rates from real lenders in the table below, prequalify on Credible, and see estimated interest rates on soft credit inquiries.
Biden Administration Begins Notifying Borrowers About Changes to Student Loan Servicers
Lower student loan interest rates with a joint guarantor
Student loan refinancing eligibility requirements can be very demanding for borrowers without an established credit history and a good debt-to-income ratio. In such cases, consider enlisting the help of a trusted co-guarantor.
A co-signer is usually a trusted friend or relative who has a good credit score and is willing to take out a loan. Both your name and credit profile are used in the application process, so you share the responsibility of paying off the loan. Being late on your loan will also have a negative impact on your co-guarantor.
Student loan interest rates are partially determined by the borrower’s credit score. You can save even more on your student loan debt by getting the lowest possible interest rates on your new loans.
Learn more about student loan refinancing by contacting a knowledgeable loan officer at Credible.
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Have a financial question and don’t know who to ask? Email a Credible Money Expert moneyexpert@credible.com Your question may be answered by Credible in the Money Experts column.
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