Five-year variable-rate loans

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For those looking to pay off their student loans quicker, five-year variable-rate loans are currently averaging 2.95%.

That’s down slightly from 3.07% the week before, the survey says — but it’s also way up from the record low of 2.53% achieved a few weeks ago in late August.

It’s important to note that these figures are just an average, specifically for borrowers with a credit score of at least 720. Better rates are available for people with excellent credit.

Borrowers with scores above 780 are averaging rates of 2.67%. On the other hand, people with middling scores (between 640 and 679) are averaging 4.59%.

Also remember that variable rates fluctuate based on market conditions, meaning borrowers can end up paying more than they expect after refinancing.

10-year fixed-rate loans

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For borrowers eager to lock in a good deal, 10-year fixed-rate loans averaged 3.49% this past week.

That’s a very slight decrease from the previous average of 3.50%, but it’s a welcome one. Rates are now tantalizingly close to their all-time low, which was 3.42% on Aug. 30.

Again, those with excellent credit qualify for better rates, averaging about 3.44%. Those with unimpressive scores could suffer rates as high as 4.77% or worse.

Refinancing into a fixed-rate loan typically won’t save you as much as a variable rate would, but your interest rate is guaranteed not to increase over the life of the loan.

A 10-year loan will also offer significantly more manageable monthly payments than a 5-year one, though you’ll spend more money overall by the time your debt is paid.

How to secure the best refi rate

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If you have a federal student loan, make sure you know what you’re giving up before jumping into a refi.

Switching from a federal loan to a private one will make you ineligible for the kind of government support some borrowers have enjoyed during the pandemic, including payment freezes, interest waivers and even loan forgiveness.

But if you already have a private loan, or you’re happy with the tradeoff, refinancing to a significantly lower rate can make a massive difference in your budget. Here are some tips to help you snag the best rate possible:

  • Boost your credit score. Lenders look at your credit score to determine how responsible you are with money. Take a free look at your score online and consider taking steps to improve it. A free credit monitoring service can offer you some tips, including ways to eliminate your other debts faster.

  • Set up auto-pay. Many lenders offer a small percentage off your interest rate while you’re enrolled in auto-pay. It ensures that they get paid on time every single month.

  • Consider a co-signer. If your credit score isn’t good enough to qualify for a better rate, you can ask a friend or family member with good credit whether they’re willing to co-sign your loan. Be careful — whoever co-signs will be on the hook for your payments if you can’t afford to pay.

  • Compare your options. The student loan world is vast, with dozens and dozens of lenders. The only way to know you’re getting a good deal is to shop around. Different lenders will weigh the factors in your application differently, so always get multiple quotes before clicking apply.

About the Author

Chris Murray

Chris Murray

Freelance Contributor

Chris Murray is a freelance contributor with

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