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Latest Student Loan Refinancing Rates
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For refinancing student loans to 10-year fixed-rate loans, the average interest rate for the week ending November 8 was 6.02%, up from 5.91% the week before, while 5-year variable-rate loans were at 2.95%. . Data from Credible, a personal finance company that prequalifies in the student loan market, down from 3.52% in the previous week. For credit scores above 720, interest rates dropped to 5.75% for 10-year fixed loans and 2.95% for 5-year variable loans. See the best student loan referrals available here.
Determining if you need to refinance your student loans isn’t always easy. Those taking out private student loans may choose to do so if their credit score improves or their financial circumstances change and/or if they can get a more attractive interest rate or shorten the loan term. You may benefit from refinancing.
But if you’re on federal student loans, refinancing can be more complicated. For one, the student loan moratorium is in effect until January 2023, so if you’re enjoying the benefits of it, you may not want to pay it back until it’s over. On top of that, you’ll be using new private loans to pay off existing public loans, which means you’ll lose the federal protections that come with federal loans. Borrowers thus lose things like government-issued loan forgiveness and income-based repayment plans that may act as a parachute at some point during the life of the loan.
Before refinancing, experts recommend weighing the pros and cons of refinancing. This is especially true if the borrower has a federal loan and is using (or planning to use) any of the loan’s income-based repayment or forgiveness programs. Even if the borrower does not currently take advantage of the programs and protections offered, it is important to seriously consider whether a future repayment plan or loan forgiveness will be required before dismissing options outright. If you decide to refinance, be sure to look for the best rates and terms.
Any advice, recommendations or rankings contained in this article are those of MarketWatch Picks and have not been reviewed or endorsed by our commercial partners.
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