Student loan refinance rates dip toward record lows — here's how to get the best deal

10-year fixed-rate loans

For borrowers eager to lock in a good rate over a longer repayment period, 10-year fixed-rate refinance loans have fallen to an average 3.46% — not far from last month's all-time low of 3.33% in the weekly data from the Credible marketplace.

Rates have dipped from an average 3.51% during the previous survey week. One year ago, the typical 10-year refi was going for 3.83%.

People with better credit qualify for lower rates. But those with unimpressive credit 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, the interest rate is guaranteed to hold steady for the full loan term.

Plus, a 10-year loan will offer more affordable monthly payments than a five-year, though you'll likely have to spend a good deal more money on interest by the time your debt is paid off.

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5-year variable-rate loans

A five-year variable-rate refinance can help you wipe out your student debt balance more quickly. Rates on those loans just dropped to an average 2.72%, the data shows.

The typical rate is down from 2.86% a week earlier, and much lower than the average 3.30% a year ago. The five-year refi rate hit a record-low 2.41%, on average, over Thanksgiving week.

Average rates are offered specifically to borrowers with credit scores of at least 720. Lower interest is possible for those with exceptional scores, of 780 or higher; Credible's website indicates today's refi rates can be as cheap as 1.74%.

At the other end of the spectrum, people with "meh" scores (between 640 and 679) are given higher rates by lenders, usually around 4.59%.

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

Tricks to bagging a lower refi rate

If you have a federal student loan, be certain you understand what you may give up by refinancing.

The government doesn't offer refinancing of its loans; instead, refinances are provided only by banks or other private lenders. Switching from a federal loan to a refi would make you ineligible for the government relief that's been extended to borrowers during the pandemic, including frozen payments and interest.

But if you’re OK with that tradeoff, or if you already have a private student loan, refinancing to a cheaper rate could cut down your monthly payments.

To land the lowest possible refi rate:

• Polish up 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 improve it so you'll look more impressive to a lender.

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

• Compare your options. Many lenders offer student loan refinances, so the only way to find the best deal is by comparison shopping. Different lenders can weigh your qualifications differently, so get multiple rate quotes and size them up side by side — before you submit a loan application.