Thinking of refinancing your student loans? These are the latest rates
The average interest rates for refinancing your student loans into a 10-year fixed-rate loan are 7.19% for the week ended March 14, up from 7.00% the week before, while for 5-year adjustable-rate loans 5, Up 89%, up 5.01% the week before, according to data from personal finance company Credible by those who prequalified in its student loan marketplace. But for those with credit scores of 720 and above, rates dropped to 6.97% for 10-year fixed-rate loans and 4.79% for 5-year variable-rate loans. Check out some of the best student loan interest rates you can get here.
Are You a Good Candidate for Student Loan Refinance?
The great benefits of refinancing your student loans are that you can potentially save thousands – even tens of thousands – of dollars over the life of the loan. You may also be able to lower your monthly payment or pay off the loan faster. And if you have a personal student loan and can achieve any of these goals, it’s probably worth considering. Check out some of the best student loan interest rates you can get here.
How do you know if you’re a good candidate for student loan refinance? You should first consider whether your loans are private or public. If you now have private student loans and your credit score or finances have improved and/or you can get a more attractive interest rate or shorten your loan term, a refi might be worth looking into.
However, if you have federal student loans, you probably want to wait to refinance. That’s partly because a student loan repayment pause remains in effect until June 2023. So if you’ve taken advantage of this benefit, you should probably wait until the break is over before refinancing.
Also, when you refinance a federal student loan, you are taking out a new private loan to pay off an existing public loan, which means that any federal protections (like the repayment pause) that come with the federal loans are lost. So unless you’re willing to give up things like government loan forgiveness and income-based repayment schedules, which are often helpful at some point during a loan’s life, you should probably reconsider refinancing.
However, should you decide to refinance, there is more to consider than looking around for the best interest rates and terms. Experts recommend weighing the pros and cons of refinancing, especially if you have federal loans. Even if you are not currently using any of the loan’s income-based repayment programs, it is important to consider whether you will need repayment plans or loan forgiveness at some point in the future.