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Refinance your student loans to save $5,000 as interest rates hit new lows

Many Americans spend years paying off their student loans, and it can be hard.

Interest rates have been hitting record lows lately, giving those with crippling student loan debt a chance to save up to $5,000.

There are various positives to refinancing your student loans, and last month interest rates reached a new low.

The week of Nov. 22 saw the average fixed interest rate for a 10 year loan at 3.35%.

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The variable interest on a five year loan was at 2.41%.

Data shows that the average student loan debt for Americans is around $37,693 with 5.8% interest.

If you were to refinance a ten year loan with a fixed interest rate of 3.4%, you could save $5,200.

The rates have risen since then, but it still might be a good idea to refinance those loans.

Related: Is your child getting $10,000 in stimulus cash this month?


What can refinancing student loans look like, and what’s going on with them during the pandemic?

By refinancing your student loans, you’re taking all of those loans and turning them into one bigger loan.

This gives you one monthly payment with one interest rate.

How you go about it will depend on the type of loans you’ve got.

Federal loans in comparison to private loans have different interest rates and timelines for repayment.

Federal loans typically have more positive things attached to them than private loans.

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This includes lower payments, lower interest rates, grace periods, and repayment options that fit your income.

Before you choose to refinance, review all of your options.

At this current moment, many federal student loans are suspended until January thanks to the CARES Act passed in March 2020.

Loans owned by the U.S. Department of Education are included.

While the loans are paused there is 0% interest, payments aren’t required, and there is no collection for defaulted loans.

Payments will resume after Jan. 31, 2022.

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