Your student loan refinance rates, if you have a higher credit score, have dropped

Should you refinance your student loans?

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To refinance your student loan into a 10-year fixed rate loan, average rates are 6.42% for the week ending November 15, compared to 6.00% the week before. Meanwhile, while 5-year variable rate loans saw rates at 3.16%, down from 3.61% the previous week, according to data from personal finance firm Credible of those who prequalified on their student loan market. For those with credit scores of 720 and above, rates have fallen to 6.07% for 10-year fixed loans and 3.16% for 5-year variable loans. Check out some of the best student loan refi rates you can get here.

It’s not always easy to determine whether or not you should refinance your student loans – but one of the biggest questions to ask yourself right now, in determining that, is whether you have private or federal student loans. . Indeed, if you have private student loans and your credit score has improved or your finances have changed and/or you are able to obtain a more attractive interest rate or shorten the term of your loan, you will likely benefit from refinancing.

But for those with federal student loans, refinancing can be more complicated. A student loan repayment pause remains in effect until January 2023, so if you take advantage of this benefit, you’ll probably want to wait until the pause is over before refinancing. Also, when you refinance, you are actually taking out a new private loan to pay off an existing public loan, which means that all federal protections that come with federal loans are lost. This means the borrower forgoes things like government-issued loan forgiveness and income-based repayment plans that might come in handy 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 removing this option. If you decide to refinance, be sure to shop around for the best rates and terms.

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About Judith J. George

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