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The Best Student Loan Refinance Rates for July 2021

Student loan refinance rates remain near record lows.

Written By: Michael P. Lux, Esq.

Last Updated:

The Best Student Loan Refinance Rates for July 2021

Student loan refinance rates remain near record lows.

Written By: Michael P. Lux, Esq.

Last Updated:

The federal student loan interest and payment freeze continues to impact the refinance marketplace. Because of the freeze borrowers are advised not to refinance federal loans at this time. As a result, the only people refinancing are private student loan borrowers.

With more lender competition for fewer customers, rates have dropped. Federal borrowers who plan on eventually refinancing may want to consider refinancing just before the federal interest freeze ends, but the federal student loan relief may extend into 2022. Thus, only private loan borrowers should be refinancing at this time.

One oddity of the July rates is that several lenders are offering fixed-rate loans that are actually lower than the variable-rate loans. Lenders CommonBond and EFLI in particular have abnormally low fixed-rate loans this month.

Important Note: To compile the best refinance rates for July 2021, nearly two dozen national student loan lenders were compared. The lenders listed below were the ones with the lowest verified rates.

The Current Lowest Student Loan Refinance Rates

RankLenderLowest RateSherpa Review
T-1Earnest1.88%Earnest Review
T-1Splash Financial1.88%Splash Financial Review
2Laurel Road1.89%Laurel Road Review

Student loan interest rates have been dropping the past few months. As is often the case, when one lender lowers their best-advertised rate, the competition follows.

It is important to note that even though Earnest, Splash, and Laurel Road 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 Rate for July 2021

RankLenderLowest RateSherpa Review
1ELFI3.18%ELFI Review
2CommonBond3.19%CommonBond Review
3Splash Financial3.53%Splash Financial Review

On the other end of the spectrum, the best 20-year fixed-rate loan is currently offered by ELFI with CommonBond close behind. 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 has never been smaller. Locking in a fixed-rate loan at just over 3% for 20 years is arguably the best deal available.

The Lowest Fixed-Rate Student Loans Available

RankLenderLowest RateSherpa Review
1Splash Financial2.24%Splash Financial Review
2Laurel Road2.50%Laurel Road Review
3ELFI2.58%ELFI Review

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.

One of the oddities of the July student loan refinance rates is that the interest rate gap between 5-year and 20-year loans has shrunk. Borrowers who select a longer loan have the option of paying extra to eliminate the debt quicker, but they have the protection of smaller minimum monthly payments.

Other Noteworthy Interest Rate Changes

In the mid-length loans, specifically those at 7, 10, or 15 years in duration, Splash, Citizens and CommonBond perform strongly.

For our overall rankings and lender reviews, be sure to check out our Student Loan Rankings page. For a complete breakdown by loan type for all loan lengths, head over to our student loan refinance rates table.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

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