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The Best Student Loan Refinance Rates for December 2021

Student loan refinance rates remain near record lows, but they appear to be creeping up as the federal interest freeze nears an end.

Written By: Michael P. Lux, Esq.

Published:

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The Best Student Loan Refinance Rates for December 2021

Student loan refinance rates remain near record lows, but they appear to be creeping up as the federal interest freeze nears an end.

Written By: Michael P. Lux, Esq.

Published:

Affiliate Disclosure and Integrity Pledge

Inflation continues to be an issue for the broader economy, but there is no sign of inflation in the student loan refinance rates for December 2021.

The most likely explanation is the federal student loan payment and interest freeze. Refinance lenders cannot compete with the 0% interest rate on most federal loans. As a result, the refinance marketplace has gotten very competitive with lenders cutting rates as low as possible.

Rates are currently at or very near record lows in most refinance categories.

Predicting future interest rates usually involves a ton of guesswork and these predictions are often inaccurate. That said, I’d be very surprised if refinance rates didn’t jump starting in February of 2022. By that point, federal borrowers will again consider refinancing their loans, and lenders won’t have to compete for such a small pool of borrowers.

Important Note: To compile the best refinance rates for December 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
1Laurel Road1.64%Laurel Road Review
2SoFi1.74%SoFi Review
3ELFI1.86%ELFI Review

The headline interest rates are still under 2%. However, fewer lenders offer loans with an interest rate under 2%.

It is important to note that even though Laurel Road, SoFi, 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 Rate for December 2021

RankLenderLowest RateSherpa Review
1Splash Financial3.03%Splash Financial Review
2ELFI3.18%ELFI Review
3CommonBond3.19%CommonBond Review

On the other end of the spectrum, the best 20-year fixed-rate loan is currently offered by Splash with ELFI and 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 Road2.25%Laurel Road Review
3Earnest2.44%Earnest 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 December 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, ELFI 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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