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Borrower 101: Student Loan Refinance Rates and Terms

Many factors go into a rate for refinancing your student loans, including the type of student loan, your financial history, credit score, and more.

Published June 21, 2021

Understanding rates is an integral part to getting the most out of your student loans as a borrower. By knowing what to expect, and why to expect it, you’ll be more empowered each payment period to pay down your debt with greater success.

Your interest rate determines the amount that you pay to borrow the money you’re taking out from either the Federal government or a private lender. With many lenders, your payment will first be applied to your interest charges before being applied to the principal balance of your loan for each payment period. Generally, your “interest rate factor” is derived from dividing your interest rate by the number of days in the year. Then, the factor is multiplied by the number of days since your last payment. This then equals how much interest you are charged for that period. Private lenders also advertise Annual Percentage Rates, or APRs. The APR is a good indicator of the total cost of a loan, since it includes any fees or other associated costs vs. just the interest payment.

A fixed interest rate loan is more stable than a variable — it remains the same for the entire duration of the loan, and cannot fluctuate based on market conditions. A variable interest rate loan (currently only offered through private lenders) can sometimes be lower than a fixed. If they don’t rise by much over time, you could possibly save money this way, but as mentioned, it carries greater risk. A private lender, like Laurel Road, will offer an interest rate based on the benchmark index it uses, plus their chosen margin. The current index used by Laurel Road for new variable rate loans is derived from the 30-day Average Secured Overnight Financing Rate (“SOFR”). Adding the index rate to the margin rate creates the loan rate. For example, if the 30-day SOFR index is 1.70%, and the chosen margin 2.5%, the loan rate would be 4.2%.

When choosing between variable or fixed rate loans, think about whether having some uncertainty in the mix is worth the potential savings. For example, if you plan on paying off the loan quickly and have the means to do so, a variable rate could be a smart choice that ultimately saves you money.

How To Find Your Best Student Loan Refinance Rates

There are many factors that go into an offered rate for refinancing your student loans, including the type of loan, your financial history, credit score, and more. Here is a breakdown of some loan types to help you understand what goes into pricing, and which type of loan could get you the right rate and terms for your situation.

Federal vs. Private Student Loan Interest Rates

Each private lender has its own criteria for determining eligibility and rates, such as credit history, total monthly debt payments, and income. Those who are in good financial standing, demonstrate a strong earnings trajectory, have good credit scores, and have shown they are responsible with debts and monthly budgeting are more likely to be approved and receive a good rate. Some private lenders, such as Laurel Road, could potentially provide lower rates to borrowers than they may find through Federal loans. Some private lenders may offer some form of forbearance should the need arise. As a borrower, you want to balance lower rates with loan terms and monthly payments you are comfortable with.

Please note: If you refinance from Federal to private loans, you will lose access to some Federal student loan repayment options, including Public Service Loan Forgiveness and Income-Driven Repayment (IDR) options. Additionally, Federal student loans offer deferment, forbearance and loan forgiveness options that may not be available with a private lender. For more information visit https://studentloans.gov.

How Laurel Road’s student loan refinancing rates compare

If you are eligible to refinance with Laurel Road, we offer several options based around your individual financial situation. Additionally, for individuals with bachelor’s degrees or higher there is no limit to the amount you can apply to have refinanced. We also offer flexible loan terms to suit your repayment needs, and we can help borrowers refinance their parents’ Parent Plus loans into their own name, if desired. If you wish to pay off your loan quickly, or stretch it out over a longer amount of time—we can help.

5 year
7 year
10 year
15 year
20 year
Fixed APR
Variable APR
Check My Rates

Eligibility and rates offered will depend on your credit profile and other factors. Rates in the above table include a 0.25% discount for making automatic payments from a bank account. Variable APRs are subject to increase after consummation. View Payment Examples below.

In providing this information, neither Laurel Road nor KeyBank nor its affiliates are acting as your agent or is offering any tax, financial, accounting, or legal advice.

Any third-party linked content is provided for informational purposes and should not be viewed as an endorsement by Laurel Road or KeyBank of any third-party product or service mentioned. Laurel Road’s Online Privacy Statement does not apply to third-party linked websites and you should consult the privacy disclosures of each site you visit for further information.

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Estimated Student Loan Refinance Payment Examples

Assumptions: Repayment examples below assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount or the Laurel Road Linked SavingsSM discount.

Fixed Rate Loans
Term Interest Rate APR No. of Payments Monthly Payment Total Payments
5 Year
7 Year
10 Year
15 Year
20 Year


Variable Rate Loans
Term Interest Rate APR No. of Payments Monthly Payment Total Payments
5 Year
7 Year
10 Year
15 Year
20 Year

Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.

Interest Rate: A simple annual rate that is applied to an unpaid balance.

Variable Rates: The current index for variable rate loans is derived from the 30-day Average Secured Overnight Financing Rate (“SOFR”) and changes in the SOFR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%. There is no limit on the amount your interest rate can increase at one time. The Index is currently published by the Federal Reserve Bank of New York (“New York Fed”). If the Index is no longer available, it will be replaced by a replacement Index according to the terms of the promissory note.

This information is current as of October 26, 2021. Information and rates are subject to change without notice.