When looking at student loan refinancing, one of the first things you need to do is find out if it’s even worth it. While there are some great reasons to refinance your student loans, there are also some reasons why doing so might not be a good idea. In this post, you’ll explore an interest rate and how it affects your refinance decision. They’ll also discuss which types of loans have lower rates and why that matters when deciding the pros and cons of refinancing student loans
What Is the Lowest Student Loan Interest Rate?
If you want to know the lowest student loan interest rate, your answer is 3.5%. That’s right: Student loan refinancing rates are currently at their lowest point in history.
The average interest rate on student loans and personal loans is about 5% for borrowers with high credit scores. The highest interest rate for personal loans is 18%. But because most lenders measure creditworthiness differently, it can be difficult to predict what kind of interest rate you’ll get based on your credit score alone; some lenders use less than 200 points while others use over 900 points as part of their calculation process.
How to Find the Lowest Interest Rate for Student Loan Refinancing
To find the lowest interest rate for student loan refinancing, you need to do a bit of research. You’ll first want to visit or call multiple lenders and ask them what their rates are. You should also look up information on different lenders to see which ones have the best reputation and highest customer satisfaction ratings.
Once you’ve done this, there are a few more factors that can help lead you toward finding the lowest student loan refinance rates:
- Look at different times of year (some may be offering discounts).
- Look at different times of day (they might have more lenient rules about when they’re open).
- Look at different times during the week (they might be running promotions).
The Best Way to Get a Low Student Loan Interest Rate
- Fixed interest rate loans are the best way to get a low student loan interest rate. Most lenders offer fixed-rate loans, and they’re the most common option for refinancing federal student loans.
- Consider asking your lender for a fixed-rate conversion option if you have a variable-rate loan. You can get a lower interest rate by choosing this option if it’s available from your current lender. Eligibility is based on factors like credit score and income level; if you qualify, then your new fixed rate will be locked in for as long as 20 years or until the end of the repayment period (whichever comes first).
As per SoFi experts, “When you refinance with a less interest rate, you could reduce the money you spend over the total life of the loan.”
When You Shouldn’t Refinance Your Student Loans
There are some scenarios in which you may want to reconsider refinancing your student loans. For example, with a variable-rate loan, you may pay more than you expected. If you have a student loan that is in forbearance, deferment or grace period, it will not be eligible for refinancing until the terms of your repayment program have expired.
If you’re looking to refinance your student loans, it’s important to consider all of your options. The best way to find the lowest interest rate is by comparing them side by side. If you’re unsure where to start, check out this guide on how much student loan refinancing will save you!