5-year variable-rate loans

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For borrowers who want to pay off their student debt more quickly, five-year variable-rate refinances are averaging 2.55%, according to the Credible marketplace. That's down from 2.60% a week earlier, and much lower than the average 3.45% one year ago.

Today's typical rate isn't far from the record low of 2.48% reached in mid-October.

The average is specifically offered to borrowers with credit scores of at least 720. Lower interest rates are available for people with exceptional credit, of 780 or higher. Credible's website indicates that refi rates as low as 1.81% are possible.

At the other end of the scale, people with so-so scores (between 640 and 679) are usually scoring rates around 4.59%.

Be aware that variable rates can fluctuate based on market conditions, meaning a borrower could wind up with a higher rate before the loan's five-year term is up.

10-year fixed-rate loans

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For borrowers looking to lock in a good deal over a longer repayment period, 10-year fixed-rate loans are now averaging 3.48%.

That’s a slight increase from the average 3.44% during the previous survey week, and it's still pretty close to late September's all-time low of 3.36%.

Again, people with excellent credit qualify for lower-than-average rates. But those with unimpressive scores might have to accept a stiffer rate, typically 4.77%.

Though fixed-rate loans generally come with higher borrowing costs than their variable-rate cousins, your interest rate is guaranteed to hold steady for the duration of the loan.

A 10-year loan also will offer more affordable monthly payments than a five-year, though you may spend a good deal more money on interest by the time your debt is paid off.

How to secure the lowest refi rate you can

Young female gardener in glasses using laptop looking for a student loan refinance.
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If you have a federal student loan, be certain you understand what you may give up if you jump into a refi.

Switching from a government loan to a refinance loan — offered only by banks and other private lenders — would make you ineligible for the kind of government support some borrowers have enjoyed during the pandemic, including frozen payments and interest, and even loan forgiveness.

But if you’re fine with that tradeoff, or if you already have a private loan, refinancing to a cheaper rate could make a big difference in your payments.

Here are some tips to help you land the best possible refi rate:

  • Work on your credit score. Lenders will review your credit to determine whether you're a good risk. Today it's easy to check your credit score for free, then take steps to polish it up so you'll look more impressive to a lender.

  • Set up auto-pay. Often, you can shave a little off your interest rate by agreeing to make automatic payments. That provides some assurance to the lender that you'll be paying on time every month.

  • Consider a co-signer. If your credit score is 200 points south of where it should be, you may need to ask a friend or family member with good credit whether they'd be willing to co-sign your loan, to help you land a better rate. But be careful, because your co-signer will be responsible for making your payments if you ever become unable.

  • Compare your options. Dozens and dozens of lenders offer student loan refinances, and the way to get the best possible deal is by shopping around. Different lenders can weigh your application differently, so get multiple rate quotes and size them up side by side before you click "Apply."

About the Author

Doug Whiteman

Doug Whiteman


Doug Whiteman is the editor-in-chief of MoneyWise. He has been quoted by The Wall Street Journal, USA Today and CNBC.com and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."

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