To refinance your student loan into a 10-year fixed-rate loan, average rates are 6.02% for the week ending November 8, down from 5.91% the week before, while variable-rate loans on 5-year bonds saw their rates settle at 2.95%, down. down 3.52% the previous week, according to data from personal finance firm Credible of those who prequalified in their student loan marketplace. For those with credit scores of 720 and above, rates have fallen to 5.75% for 10-year fixed loans and 2.95% for 5-year variable loans. Check out some of the best student loan refi rates you can get here.
Determining whether or not you should refinance your student loans is not always straightforward. Those with private student loans will likely benefit from refinancing if your credit score has improved or your finances have changed and/or you are able to secure a more attractive interest rate or shorten the term of your loan.
But for those with federal student loans, refinancing can be more complicated. For one, a student loan repayment pause remains in effect until January 2023, so if you’re taking advantage of this benefit, you might not want to refi until it ends. Also, when you refinance, you’re actually taking out a new private loan to pay off an existing public loan, but that means all of the federal protections that come with federal loans are lost. So the borrower forgoes things like government-issued loan forgiveness and income-based repayment plans that might act as a parachute at some point during the life of the loan.
Before refinancing, experts recommend weighing the pros and cons of a refi, especially if the borrower has federal loans and uses (or plans to use) one of the loan-based repayment or rebate programs. loan income. Even if a borrower is not currently taking advantage of the programs and protections offered, it is important to seriously consider whether or not they will need loan repayment or cancellation plans in the future, before completely dismissing the loan. option. If you decide to refinance, be sure to shop around for the best rates and terms.
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