As we enter 2025, student loan refinance interest rates have held steady for several months. Even though we are not at all-time lows, many borrowers still have excellent opportunities for lower interest rates on their private loans.
If you have rate-shopped over the past couple of months, you probably don’t need to do it again this month — there hasn’t been much movement. However, if it has been a while since you looked at refinance rates, things are better now than they have been at any point during the last couple of years.
Important Note: To compile the best refinance rates for January 2025, nearly two dozen national student loan lenders were compared. The lenders listed below were the ones with the lowest verified rates.
The lowest rate listed below includes any available .25% rate discount for borrowers who enroll in autopay.
The Current Lowest Student Loan Refinance Rates for Variable Loans
The headline interest rates now hover around 5% with most of the top lenders. We have seen these rates climb over the past couple of months, and all signs point to them continuing to increase.
It is important to note that even though Splash, Laurel Road, and ELFI have the lowest possible interest rates, they do not necessarily get the top spot in our student loan consolidation and refinance rankings. Borrowers are still best served by applying with 4-5 lenders, as each lender has a different formula for evaluating applications. The best-advertised rates do not always equal the best rate offered, but they do provide a useful starting point.
The Best 20-Year Refinance Rates for January 2025
On the other end of the spectrum, the best 20-year fixed-rate loans are currently offered by Splash, Laurel Road, and ELFI. Most other lenders have significantly higher rates and are not included in this table. The lenders at the top of this list look a lot different than the lenders at the top of the 5-year lists. Borrowers should consider whether they want a longer loan prior to putting together an application strategy.
Borrowers who are looking for the lowest possible payment when they refinance usually opt for a 20-year loan. The advantage is an easy monthly payment, but the downside is that it comes with a somewhat higher interest rate.
However, it is worth noting that the gap between the 5-year variable loans and the 20-year fixed-rate loans remains tight. Opting for a substantially lower payment and a slightly higher interest rate could make sense for many borrowers. Locking in a fixed rate also prevents payments from going up in the future.
Sherpa Tip: The interest rate gap between 10, 15, and 20-year loans is especially small right now. Even if you don’t need the lower payment offered by the 20-year loan, it might still be the best choice.
Opting for a lower monthly payment gives you flexibility in the event of any financial hardship. It also frees up cash each month to focus on other goals like buying a house or saving for retirement.
For many borrowers, I think locking in a 20-year fixed-rate loan is the best option currently available.
The Lowest Fixed-Rate Student Loans Available
For borrowers looking for the stability of a fixed-rate loan, but still in search of an ultra-low interest rate, the 5-year fixed-rate loan is usually the best bet.
Surprisingly, with many lenders, the interest rate on a 5-year fixed loan is actually lower than a 5-year variable loan. Typically, we see lower rates on variable loans, but this is a unique interest rate environment.
Other Noteworthy Interest Rate Changes
In the mid-length loans, specifically those at 7, 10, or 15 years in duration, Splash, SoFi, and ELFI perform strongly. However, most borrowers will be best served by either opting for a short 5-year loan at the lowest interest rate possible or choosing a 20-year loan to get the smallest payment possible.
For our overall rankings and lender reviews, be sure to check out our Student Loan Rankings page.
Tips for Getting the Best Rate
For student loan borrowers looking for a lower interest rate, it’s important to keep a few things in mind:
- Shopping around to find the best rate has never been more important. Interest rates are constantly changing, and some lenders are starting to get picky on approvals.
- You can always refinance again in the future. Unlike a mortgage where a refinance is time-consuming and costly, refinancing a student loan takes little time and doesn’t involve any transaction costs. If you lock in a fixed-rate loan today, you could always refinance that loan again next year if rates drop. This is the ideal strategy to use when rates are dropping.
- When you refinance you are picking a new monthly payment. Two loans at 5.49% are not necessarily the same. If you have 20 years to repay a loan, your monthly payment will be much lower than a 5-year loan. This can free up cash for building an emergency fund, saving for retirement, or buying a house.
- Play around with different repayment lengths. With some lenders, the interest rate for a 5-year loan is the same as for a 15-year loan. Lower monthly payments are preferable, even if you want to pay off your debt quickly.
Finally, if you have a variable-rate loan, you can get off the inflation roller-coaster by refinancing into a fixed-rate loan. No matter how much interest rates grow in the future, if you have a fixed-rate loan, your monthly bill won’t change.