best student loan refinance rates october 2020

The Best Student Loan Refinance Rates for October 2020

Michael Lux Refinance, Student Loan Blog 0 Comments

The student loan refinance rates offered in October 2020 are a bit strange.

Some lenders continue to offer excellent rates. Others have dramatically increased interest rates from previous lows. We have even seen some examples of lenders offering lower rates for longer-term loans. Normally, the shorter the repayment length, the better the available rates.

The oddities in the October rates are probably attributable to the financial uncertainty due to the Covid-19 pandemic. Some lenders have plenty of capital available for new loans while others are short. Additionally, borrowers are advised not to refinance federal loans at this time.

The strange circumstances have created a strange marketplace.

However, there are certainly opportunities for borrowers looking to refinance. The highlight of the October rate changes is probably Splash Financial. Splash has the best fixed-rate loans in the 5, 7, 10, 15, and 20-year categories.

To compile the best refinance rates for October 2020, 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-1Splash Financial1.89%Splash Financial Review
T-1Laurel Road1.89%Laurel Road Review
3LendKey1.98%LendKey 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 Splash, Laurel Road, and Earnest 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 October 2020

RankLenderLowest RateSherpa Review
1Splash Financial3.93%Splash Financial Review
2CommonBond4.29%CommonBond Review
3Citizen's Bank4.31%Citizen's Bank Review

On the other end of the spectrum, the best 20-year fixed-rate loan is currently offered by Splash Financial with CommonBond and Citizens 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.

The Lowest Fixed-Rate Student Loans Available

RankLenderLowest RateSherpa Review
1Splash Financial2.38%Splash Financial Review
2ELFI2.79%ELFI Review
3Laurel Road2.80%Laurel Road 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 October student loan refinance rates is that the interest rate gap between variable-rate loans and fixed-rate loans has grown considerably for short-term loans.

Other Noteworthy Interest Rate Changes

In the mid-length loans, specifically those at 7, 10, or 15 years in duration, Splash, Laurel Road and iHelp 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.

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