November 8, 2022 – Lending Rates Drop – Forbes Advisor


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Last week, the average interest rate on refinanced student loans fell slightly. Overall, rates remain low, making student loan refinancing an attractive option for borrowers.

For borrowers with a credit score of 720 or higher who prequalified in’s student loan marketplace from October 31 through November 5, the average fixed interest rate on a 10-year refinance loan was 5.71%. On a five-year variable-rate loan, the rate was 2.95%, according to

Related: Best Student Loan Refinance Lenders

Fixed rate loans

Last week, the average fixed rate on 10-year refinance loans fell 0.03% to 5.71%. The previous week, the average was 5.74%.

Because fixed interest rates don’t change over the term of a borrower’s loan, it’s possible to lock in a rate that’s significantly lower than what you would have received this time last year. The average fixed rate on a 10-year refinance loan this time last year was 3.48%, 2.23% lower than the current rate.

A borrower refinancing $20,000 in student loans at the current average fixed rate would pay about $219 per month and about $6,297 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 fell last week to 2.95% on average from 3.31%.

Unlike fixed rates, variable interest rates fluctuate over the life of a loan depending on market conditions and the index to which they are linked. Many refinance lenders recalculate rates monthly for borrowers with variable rate loans, but they usually limit the rate height, to 18%, for example.

If you were to refinance an existing $20,000 loan into a five-year loan at a variable interest rate of 2.95%, you would pay around $359 on average per month. In total interest over the term of the loan, you would pay approximately $1,536. Of course, since the interest rate is variable, it can fluctuate up or down from month to month.

Related: Should You Refinance Student Loans?

When should you refinance student loans?

Lenders generally require you to graduate before refinancing. While it’s possible to find a lender without this requirement, in most cases you’ll want to wait to refinance after you graduate.

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

Using a co-signer is an option for those who do not have sufficient credit or income to qualify for a refinance loan. Alternatively, you can wait until your credit and income are stronger. If you decide to use a co-signer, make sure they know they will be responsible for payments if you can’t for some reason. The loan will also show up on their credit report.

It is important to make sure that you will save enough money when refinancing. While many borrowers with strong credit ratings could benefit from refinancing at today’s interest rates, those with weaker credit will not benefit from the lowest rates available.

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

What to Consider When Comparing Student Loan Refinance Rates

Refinancing a student loan at the lowest possible interest rate is one of the best ways to reduce the amount of interest you’ll pay over the life of the loan.

While variable rates may start low, they could rise in the future, making it a gamble. But one way to limit your exposure to risk is to pay off your new refinance loan as quickly as possible. Keep the loan term as short as possible and pay extra when possible so that you are not subject to possible rate increases in the future.

When considering your options, compare rates from multiple student loan refinance lenders to ensure you don’t miss out on possible savings. Determine if you qualify for additional interest rate reductions, possibly by choosing automatic payments or having an existing financial account with a lender.

Refinancing Student Loans: What Else to Consider

When you refinance federal student loans to a private loan, you lose access to some federal loan benefits. You will no longer have access to features such as:

You may not need these programs if you have a stable income and plan to pay off your loan quickly. But be sure you won’t need these programs if you plan to refinance federal student loans.

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


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