Student loan refinance rates fell from the previous week. For 10-year fixed rate loans, the average rate was 4.98% (down slightly from 4.99%), and for 5-year floating rate loans, it was 3.53% (compared to 3.92% the previous week), according to the most recent personal finance market data Credible. Of course, these are just averages, and it’s important to note that those with great credit may be able to get lower rates, while those with average credit may pay more. You can see the lowest fares you could qualify for here.
Even though student loan refinance rates are still relatively low, experts recommend exercising caution before refinancing a student loan, especially if you have federal student loans. This is because when refinancing a federal student loan, you are effectively taking out a new loan to pay off the old loan, and in the process, your federal loan is converted into a private loan. Private loans do not benefit from the protections that federal loans offer, such as income-based repayment plans, loan forgiveness and the current suspension of payments and interest that is currently in effect as a result of the pandemic.
If, however, you are considering refinancing a private student loan and your finances have improved and/or you are being offered more attractive rates and loan terms, refinancing may be a wise move. You can see the lowest rates you could qualify for here, and be sure to read this MarketWatch Picks guide to help you get the lowest rates when refinancing your student loans.