Student Loan Refinance Rates: December 27, 2023—10-Year Loan Rates Increase

Interest rates on refinanced student loans are jumping up.

For borrowers with a credit score of 720 or higher who prequalified on’s student loan marketplace during the week of December 18, the average fixed interest rate on a 10-year refinance loan was 7.68%. On a five-year variable-rate loan, the rate was 6.12%, according to

These rates are accurate as of December 18, 2023.

Related:  Best Student Loan Refinance Lenders

Fixed-Rate Loans

The average fixed rate on 10-year refinance loans last week jumped by 0.07 percentage points to 7.68%. The week before, the average stood at 7.61%.

Fixed interest rates won’t fluctuate throughout a borrower’s loan term. That means borrowers refinancing now will lock in a rate higher than one they would have received this time last year. At this time last year, the average fixed rate on a 10-year refinance loan was 6.22%, 1.46 percentage points lower than today’s rate.

A borrower who refinances $20,000 in student loans to today’s average fixed rate would pay around $239 per month and approximately $8,714 in total interest over 10 years, according to Forbes Advisor’s student loan calculator.

Variable-Rate Loans

Average variable rates on five-year refinance loans moved down last week by 0.16%, falling to 6.12%.

In contrast to fixed rates, variable interest rates fluctuate over the course of a loan term according to market conditions and the financial index they’re tied to. Many refinance lenders recalculate rates monthly for borrowers with variable-rate loans, but they typically limit how high the rate can go—to 18%, for instance.

If you were to refinance an existing $20,000 loan to a five-year loan at a variable interest rate of 6.12%, you’d pay approximately $388 on average per month. In total interest over the life of the loan, you’d pay around $3,266. Of course, since the interest rate is variable, it could fluctuate up or down from month to month.

Related: Should You Refinance Student Loans?

The Right Time To Refinance Student Loans

Lenders generally require you to complete your degree before refinancing. Though it’s possible to find a lender without this requirement, in most cases, you’ll want to wait to refinance until after you’ve graduated.

Keep in mind that to get the lowest interest rates, you’ll need a good or excellent credit score.

Asking a relative or friend to be a co-signer is one option for those who don’t have strong enough credit or income to qualify for a refinance loan. Alternatively, you could wait until your credit and income are stronger. If you decide to use a co-signer, make sure they understand they’ll be responsible for any payments you can’t make. The loan will also appear on their credit report.

Steps to Get the Best Student Loan Refinance Rates

The best student loan refinance rates typically go to borrowers with strong credit. To get the best rate, take some time to improve your credit before you apply. Paying down debts, reducing your credit utilization ratio and disputing any errors on your credit report can boost your credit.

Another option is applying for student loan refinance with a co-signer. If you can add a creditworthy co-signer to your application, you might qualify for a better interest rate. However, remember that your co-signer will share responsibility for the loan.

Finally, compare offers from multiple lenders. Each lender sets its own rates and terms, so shopping around can help you find a student loan refinance offer with the best rate.

Refinancing Federal Loans to Private Loans

A crucial caveat is that refinancing federal student loans to a private loan means you’ll lose many federal loan advantages, like income-driven repayment plans and generous deferment and forbearance options.

If you’re thinking about refinancing federal student loans, first make sure you likely won’t need to use any of these programs. This may be the case if your income is stable and you plan to quickly pay off a refinance loan. You always have the option to refinance only your private loans, or only a portion of your federal loans. Since federal loans’ fixed interest rates are typically quite low, you may also decide refinancing wouldn’t lead to substantial savings.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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