Student Refinance Rates: January 23, 2023—Loan Cost Increases

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Student loan rates went up last week. Despite the increase, if you want to refinance your student loans, you can still get a lower rate.

According to, from January 16 to January 21, the average fixed interest rate on a 10-year refinance loan was 6.47%. It’s 7.35% on a five-year loan. It’s for borrowers with a score of 720 or better who pre-qualify on’s student loan marketplace.

Target: Best Student Loan Refinancing

Permanent loan

The fixed rate on 10-year loans last week increased by 0.29% to 6.47%. The week before, the average stood at 6.18%.

Fixed interest rates will not change throughout the life of the borrower’s loan. That allows borrowers to refinance now to lock in a rate that is significantly lower than what they received at this time last year. At this time last year, the average fixed rate on a 10-year refinance loan was 3.56%, 2.91% lower than today.

If you refinanced $20,000 in student loans today, you’d pay $227 a month and about $7,215 in total interest over 10 years, according to Forbes Advisor’s student loan calculator.

Variable rate loans

Last week, the rate of five-year variable student loans increased to 7.35% from 5.79% the week before.

In addition to fixed rates, interest rates fluctuate over the term of the loan according to market conditions and the index to which they are bound. Most refinance lenders recalculate monthly rates for variable rate borrowers, but they often limit the maximum. the rate can go—to 18%, for example.

Refinancing an existing $20,000 loan into a five-year loan at an interest rate of 7.35% would result in a monthly payment of about $399. The borrower pays $3,960 in total interest over the life of the loan. But the rate in this example is variable, and it can go up or down every month.

Target: Should you refinance student loans?

When should you refinance student loans?

Most lenders require borrowers to complete their degree before refinancing – although not all – in most cases, son to refinance until you graduate. You also need a good or good credit score and stable income in order to get the lowest interest rate.

If your credit or income isn’t strong enough to qualify, you can wait and refinance later or use a joint signature. The cosigner you choose should be aware that he or she will be responsible for paying off student loans if you become insolvent and that the loan will appear on their credit report.

Finally, make sure you can save enough money to justify refinancing. In today’s prices, many borrowers with high credit scores can benefit from refinancing. But those with less than a lot of debt will not receive the lowest fixed or variable interest rates. First, research your pre-qualification rates through several lenders, then calculate your savings.

Getting the best prices

Refinancing a student loan at the lowest interest rate is one of the best ways to lower the interest you pay over the life of the loan.

Although variable rates may start out low, they may increase in the future, making it a gamble. But one way to limit your risk is to pay off your new refinance loan as soon as possible. Choose a shorter term that you can manage, and pay extra if possible so you don’t have to run up costs in the future.

Student loan refinancing: What else to consider

There are a few things to keep in mind when refinancing a federal student loan into a private student loan. In the beginning, you will lose access to some of the benefits offered by the federal student loan. For example, you will no longer be able to find it income-based repayment plan or postponement and tolerance decisions.

You may not need these programs if your income is stable and you plan to pay off your loan early. But rest assured that you don’t need these programs if you’re considering federal student loan refinancing.

If you need the benefits of those programs, you can refinance only your private loans or only a portion of your federal loans.

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