Student loan refinancing rates fall again to new record low

Borrowers with excellent credit seeking to refinance student loans in December 2020 had an opportunity to lock in the lowest fixed rates ever offered on 10-year loans by lenders competing through the Credible marketplace.

For borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender, during December:

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  • Rates on 10-year fixed-rate loans fell for the sixth month in a row to a new record low of 3.89%. Rates on 10-year fixed-rate loans were down from 3.95% in November and 4.73% a year ago.
  • Rates on 5-year variable-rate loans averaged 3.26%, little changed from 3.25% in November but down from 3.52% a year ago.

The chart above shows average prequalified rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender. The chart shows average monthly rates for the last 3 years.

If you're curious about what kind of rates you may qualify for, you can use an online tool like Credible to compare options from different private lenders. Checking your rates won't affect your credit score.

To provide relief from the economic impacts of the COVID-19 pandemic, interest and payments on federal student loans have been suspended through Jan. 31, 2020. The Biden administration is expected to extend payment relief, and also ask Congress to provide limited loan forgiveness. As long as that relief is in place, there’s little incentive to refinance federal student loans. But many borrowers with private student loan debt are taking advantage of the low interest rate environment to refinance their education debt at lower rates.

For those who qualify for student loan refinancing, the interest rates offered by lenders can depend on factors like your credit score, the type of loan you’re seeking (fixed or variable rate), and the loan repayment term.

The chart above shows how the borrower’s credit score and the loan term affect rates. Rates tend to be higher on loans with fixed interest rates and longer repayment terms. Because each lender has its own method of evaluating borrowers, it’s a good idea to request student loan refinancing rates from multiple lenders so you can compare your options.

You can use Credible to compare student loan refinancing rates from multiple private lenders at once without affecting your credit score.

About Credible

Credible is a multi-lender marketplace that empowers consumers to discover financial products that are the best fit for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 3,700 positive Trustpilot reviews and a TrustScore of 4.7/5.

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