Student loan refinancing rates this week: Aug 2, 2022 | Prices are going up – Business Insider | Vette Leader

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Average interest rates on refinanced student loans are up across the board from two weeks ago, according to Credible. Interest rates on 5-year graduate refinancing showed the largest change, rising 66 basis points. All prices have increased by more than 2% compared to the previous year.

Interest rates have risen for most of the last year and there is reason to believe they will continue to rise in the future. For the 2022-23 school year, federal student loan rates will increase by the highest amount since 2005-06. These new interest rates will not directly affect rates on private student loans, but private interest rates may increase because they do not need to stay low enough to be comparable to federal loan rates.

5-year variable refinance rates for student loans

Refinance rates for 5-year adjustable rate student loans rose 54 basis points over the past week, up over 2% from a year ago.

Refinance rates on 5-year variable rate graduate loans are up 66 basis points.

10-year fixed refinance rates for student loans

10-year fixed-term student loan refinance rates have risen slightly since last week. Undergraduate rates are up 12 basis points, while graduate rates are up 42 basis points. The interest rates on both loans have risen by more than 2% compared to the previous year.

Student Loan Interest Based on Credit Rating

Your credit score has a significant impact on your rate. You often get a lower rate the better your credit score. Below we have listed the 10-year fixed student loan rates by credit rating:

How do I know if I’ll be eligible to refinance my student loan?

In general, the best barometer of credit approval is your credit score and history. Lenders like to see you regularly repay your loans on time. The better your credit history, the more likely you are to qualify for a low interest rate. Additionally, most lenders perform a gentle credit check (which doesn’t affect your credit score) when you apply, so you can find out from a single lender if you’ll be approved without harm to you.

Fixed vs variable loan

A fixed rate student loan has a fixed interest rate that stays the same throughout the loan. The rate you get when you take out your loan is the rate the lender will charge you until you pay off your loan in full.

An adjustable rate loan has an interest rate that the lender changes periodically throughout the life of your loan. Lenders typically peg this rate to specific market benchmarks, which are often influenced by the federal funds rate. Variable interest rates can start out lower than fixed interest rates, but rise higher over the life of your loan.

What is the difference between a 5 year and 10 year loan?

If you want a better interest rate and are financially able to pay off your loan quickly, a 5-year repayment term might be a good choice. You save interest and can use money more quickly for your other financial goals.

A 10-year term will cost you more overall, but you’ll pay lower monthly payments. This can make it easier for you to pay off your loan if you’re on a tight budget.

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