*Rate Tables Updated as of September 2nd, 2020

September 2020 may be the most competitive we have ever seen the student loan refinance marketplace.

Prior to the Covid-19 pandemic, tech companies like SoFi and Earnest tended to offer the best refinance rates while the traditional banks and lenders lagged behind. Once Coronavirus entered the equation, the traditional banking lenders like Laurel Road and ELFI were able to offer the best rates.

As we enter fall, things have again shifted, and the tech companies and traditional banks are now offering very similar rates. At this point, the vast majority of lenders are offering variable-rate loans starting at 1.99% and fixed-rate loans starting at 2.99%.

For borrowers looking to refinance their private loans (Refinancing federal loans is probably a mistake for many borrowers at the present time), the ideal strategy is relatively simple. If you are looking for a 5-year variable rate, keep applying until you find a lender willing to offer 1.99%. Once you qualify for that top rate, there isn’t much of a benefit in continuing to shop around. The same can be said for 5-year fixed-rate loans.

Those looking for longer duration loans will likely need to do a more exhaustive search as the market has not yet consolidated around a standard rate for a 20-year loan.

The Current Lowest Student Loan Refinance Rates

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, SoFi, 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 September 2020

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

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 current marketplace 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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