Student Loan Refinance Interest RatesEmail This Article
Refinancing your student loans is the only way to get a lower interest rate. Most refi lenders offer both fixed and variable interest rate options. The interest rates offered are based on a market index (such as the Prime Rate or LIBOR) and may be more competitive with one lender vs. another. In today’s marketplace, interest rates for student loan refinancing start at around 1.89% APR (variable).
Best Student Loan Refinance Rates
We work with top lenders in the student loan refinancing business who offer highly competitive—if not the absolute best—rates. Applying with a cosigner with strong credit history is the best way to qualify for a lender’s lowest interest rates.
Student Loan Refinance Lender Partners
- Interest Rates
- Loan Min/Max
- Minimum: $5,000
- Maximum: $500K
- Repayment Terms: 5, 10, 15, or 20 years
- Degree Requirements: Must have earned a bachelor's degree from an approved post-secondary institution and program of study.
If you are thinking of applying on your own, keep in mind that you will need excellent credit and at least two years of steady income to qualify.
If you don’t have the credit history to qualify on your own, consider applying with a cosigner. Many lenders offer options to release your cosigner after you’ve made a set number of on-time payments (usually ranging from 12 to 48 months).
Student Loan Refinance Rates
Lowest Student Loan Refinance Rates
If you want to start out with the lowest rate available to you, a variable interest rate may be the way to go. Variable rates are typically lower than fixed rates, but they could increase substantially over time.
Because you are sharing some of the risk with your lender. If interest rates go up, you pay more (the terms and conditions of your loan will spell out the interest rate cap), and the lender receives more money. If interest rates go down, you pay less, and the lender receives less money. If you are someone who is planning to pay your loan quickly, you may want to take advantage of the lowest interest rate possible.
Fixed Rate Student Loan Refinance
If you’re not much of a risk taker, a fixed interest rate is probably for you. More importantly, lenders tend to offer a range of fixed rates with the lowest rates being reserved for individuals with the best credit.
Fixed rates stay the same for the entire life of the loan, so the rate you start with is the same one you’ll have until you make your last payment. Unlike variable interest rates, which can change as you repay your loan, fixed interest rates make budgeting and planning your financial future easy, because your payments won’t change.
Student Loan Fees
When comparing lenders, don’t forget to look at potential loan fees. Types of fees may include:
- application fees
- disbursement fees
- origination fees
- late payment fees
Most lenders offer private student loan refinancing with no origination, application, or disbursement fees. But, this does not mean that late fees are off the table. In other words, failure to make on-time payments could mean you are subject to penalties. And the lender could charge either a fixed percentage or a flat fee (usually no higher than $25).
Also, if your payments ever reject for insufficient funds, you could be charged a fee in those circumstances.
Be sure to consider these fees when comparing lenders.
How Interest Rates and Repayment Terms Affect Loan Costs
The following tables are based on a hypothetical $50,000 private refinance student loan with no origination or application fees. Interest rates and repayment terms can have a bigger influence on the cost of your refinance loan than you might think, so compare carefully before signing on the dotted line!
(Rate fluctuates based on the index)
|Number of Payments||180||180||240||240|
|Minimum Monthly Payment||$351||$485||$283||$426|
|Total Interest Charges||$13,196||$37,260||$18,003||$52,173|
|Total Repayment Amount||$63,196||$87,260||$68,003||$102,173|
(Rate stays the same for the life of the loan)
|Number of Payments||180||180||240||240|
|Minimum Monthly Payment||$422||$530||$358||$474|
|Total Interest Charges||$25,947||$45,343||$35,972||$63,822|
|Total Repayment Amount||$74,947||$95,343||$85,972||$113,822|