The cost of borrowing money for college can vary depending on the lender and type of loan a student loan borrower chooses to use. And, just like with all financial decisions, knowledge is power, which is why LendEDU is staying on top of the interest rate changes in the private student loan and student loan refinancing market.
After all, a low interest rate offered in December may be much higher just a month later. That’s particularly true with variable rate loans, which are tied to the market. Most lenders use the LIBOR to determine interest rates for variable loans.
The LIBOR may seem complicated, but in essence it’s the rate that a group of international banks charge each other when making loans. This rate determines the interest rate on all sorts of loans, including private student loans. The LIBOR can change from month to month and even week to week. According to Bankrate.com, the three month LIBOR currently stands at 1.03 percent, which is higher than 1.02 percent seen a month ago and the 0.62 percent rate seen a year ago.
When it comes to a leader in the student loan refinancing industry, you don’t need to look any further than SoFi out of San Francisco. It claims that it saves borrowers on average $288 a month when they refinance their student loans with a total of $22,359 saved on average. But that doesn’t mean SoFi’s interest rates on its loans don’t increase from time to time. With that in mind, here’s a look at the interest rate changes of SoFi’s refinanced student loans from the end of November to the beginning of January.
Take variable rate refinanced loans to start, since they often see the biggest change. At SoFi they only increased slightly from between 2.12 percent to 6.04 percent at the end of November to between 2.35 percent to 6.27 percent as of the end of January. Fixed rate refinanced loans didn’t move at all, staying between 3.375 percent and 6.74 percent.
It is important to stay on top of changing interest rates, as they have a impact on your financial life, whether you realize it or not.
Author: Dave Rathmanner
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