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| student loan refinance rates |
Student loan debt continues to be a major financial burden for millions of Americans, and with interest rates fluctuating each year, many borrowers are turning to refinancing as a way to lower their monthly payments and save money over the life of their loans. But what if your credit score is average—not excellent? The good news is that even with average credit, it’s possible to find competitive student loan refinance rates in 2025. Here’s how.
📌 What Is Student Loan Refinancing?
Refinancing a student loan involves taking out a new private loan to replace your existing federal or private student loans. The goal is to get a lower interest rate, better repayment terms, or both.
- Example: If you’re paying 7.5% interest and refinance to a loan with a 5% APR, you could save thousands in interest over time.
- Important Note: Refinancing federal loans means giving up benefits like income-driven repayment plans, deferment, and loan forgiveness programs.
💰 What Are the Current Refinance Rates in 2025?
Student loan refinance rates vary widely depending on your credit score, income, lender, and loan term. Here's a general overview as of July 2025:
| Loan Type | Fixed APR Range | Variable APR Range |
|---|---|---|
| Excellent Credit (740+) | 3.89% – 5.50% | 4.50% – 6.25% |
| Average Credit (660–699) | 5.50% – 8.25% | 6.25% – 9.50% |
| Fair/Poor Credit (<660) | 7.00% – 11.00%+ | 8.00% – 12.00%+ |
While lower rates typically go to borrowers with excellent credit, you still have options with a 660–699 credit score bracket.
🔍 Step-by-Step: How to Find the Lowest Refinance Rates (Even with Average Credit)
1. Know Your Credit Score and Financial Profile
Before applying, check your:
- Credit score
- Debt-to-income (DTI) ratio
- Monthly cash flow
- Employment history
You can request a free credit report at AnnualCreditReport.com.
Tip: Aim to pay off small debts or increase your income if your DTI is too high—this can significantly improve your chances of approval.
2. Use Comparison Tools and Marketplaces
Instead of visiting each lender’s site individually, use rate comparison platforms like:
- Credible
- NerdWallet
- Bankrate
- LendEDU
These tools allow you to pre-qualify with multiple lenders using a soft credit check, which won’t hurt your score.
3. Look for Lenders That Cater to Average Credit
Not all lenders have the same approval criteria. Some lenders are more flexible and designed to serve borrowers with average credit:
- Earnest: Considers factors beyond just credit score (e.g., spending habits, savings).
- LendKey: Works with local credit unions and community banks, often with lower qualification thresholds.
- ELFI: Known for competitive rates and high approval rates for mid-range credit scores.
- SoFi: Offers unemployment protection and financial planning services, even for average-credit borrowers.
4. Add a Creditworthy Cosigner
One of the most effective ways to qualify for better rates is to apply with a cosigner who has excellent credit.
- A cosigner provides additional security to the lender, reducing the risk.
- After a set number of on-time payments, some lenders allow cosigner release.
If you have a trusted family member or partner willing to help, it can drastically improve your rate options.
5. Choose the Right Loan Term
Shorter terms (5 to 7 years) often come with lower interest rates, but your monthly payment will be higher. If you can afford a higher monthly payment, choosing a shorter loan term can save you more in interest.
If your priority is lowering your monthly payment, go for a longer term—but be prepared to pay more interest over time.
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