Refinancing rates for high-quality student loans are declining. But is refi right for you?

The latest rates for student loan refinancing.

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The average interest rate for refinancing student loans to 10-year fixed-rate loans was 5.98% for the week ending November 1, up from 5.90% the week before, while the rate for 5-year variable-rate loans was 3.54%. . Data from personal finance company Credible surveying pre-qualified people in the student loan market showed it was down from 3.65% the week before. It fell to 3.31% on 5-year variable loans. See the best student loan referrals available here.

Determining if you need to refinance your student loans isn’t always easy. Planning to refinance a private student loan because your credit score has improved, your financial situation has changed, and/or you are able to obtain a more attractive interest rate or shorten the loan term If so, refinance.

But if you’re on federal student loans, refinancing can be more complicated. For one, the student loan moratorium is in effect until January 2023, so if you’re enjoying it, you may not want to repay it until it’s over. , will take new private loans to pay off existing public loans, but this means losing the federal protections that come with federal loans. Borrowers therefore lose things like government-issued loan forgiveness and income-based repayment plans that may act as a parachute at some point during the life of the loan.

So, before refinancing, especially if the borrower has a federal loan and is using or planning to use one of the loan’s income-based repayment or forgiveness programs, a professional I suggest weighing the pros and cons of refi. Even if the borrower does not currently take advantage of the programs and protections offered, it is important to consider whether future repayment plans or loan forgiveness will be required before dismissing options outright. If you decide to refinance, be sure to look for the best rates and terms.

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