Student Loan Refinance Rates: November 14, 2022—Loan Rates Start To Increase

Student Loan Refinance Rates: November 14, 2022—loan Rates Start To Increase

Last week, the average interest rate on refinanced student loans jumped up. Despite the rise, rates still remain relatively low, providing borrowers with an opportunity to refinance at a lower rate.

According to, from November 7 to November 12, the average fixed interest rate on a 10-year refinance loan was 6.07%. It was 3.16% on a five-year variable-rate loan. That’s for borrowers with a credit score of 720 or higher who prequalified on’s student loan marketplace.

Related:  Best Student Loan Refinance Lenders

Fixed-rate Loans

Last week, the average fixed rate on a 10-year refinance loan increased by 0.36% to 6.07%. The average stood at 5.71% the week prior.

At this time last year, the average fixed rate on a 10-year refinance loan was 3.42%, or 2.65% lower than today’s rate. That means that borrowers who refinance now have the chance to lock in a rate that’s substantially lower than they would have received at this time last year.

If you were to refinance $20,000 in student loans to today’s average fixed rate, you’d pay around $223 per month and approximately $6,729 in total interest over 10 years, according to Forbes Advisor’s student loan calculator.

Variable-rate Loans

The average rate on five-year variable student refinance loans moved up by 0.21% last week. Now it sits at 3.16%.

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

Refinancing an existing $20,000 loan to a five-year loan at 3.16% interest would yield a monthly payment of approximately $361. A borrower would pay $1,648 in total interest over the life of the loan. But since the rate in this example is variable, it could go up or down from month to month within that time frame.

Related: Should You Refinance Student Loans?

When to Refinance Student Loans

Most lenders require borrowers to complete their degree before refinancing—though not all—so in most cases, wait to refinance until you’ve graduated. You’ll also need a good or excellent credit score and stable income in order to access the lowest interest rates.

If your credit is poor or your income isn’t high enough to qualify, you have a couple of options. You can wait to refinance until you’ve built credit or you have enough income. Or, you can get a co-signer. Just make sure that the co-signer knows that if you can’t make student loan payments, they’ll be responsible. The loan will appear on their credit report.

It’s important to make sure you’ll save enough money when refinancing. While many borrowers with solid credit scores could benefit from refinancing at today’s interest rates, those with poorer credit won’t receive the lowest rates available.

Do the math to see if refinancing will benefit your situation. Shop around for rates and then calculate what you could save.

Refinancing Federal Loans to Private Loans

One big catch when refinancing federal student loans to private student loans is that you’ll lose many federal loan benefits, 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.

What To Consider When Comparing Student Loan Refinancing Rates

One big goal of refinancing student loans, for many borrowers, is reducing the amount of interest paid. And that means getting the lowest possible interest rate.

Variable rates typically start low, but they could rise in the future, making them a gamble. But one way to limit your risk exposure is to pay off your new refinance loan as fast as possible. Choose as short a loan term as you can manage, and pay extra when possible so that you’re not subject to potential rate increases in the future.

When considering your options, compare rates across multiple student loan refinancing lenders to ensure you’re not missing out on possible savings. Explore whether you qualify for additional interest rate discounts, potentially by choosing automatic payments or by having an existing financial account with a lender.

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