For millions of college graduates, September “back-to-school” time is a reminder of the significant student loan debt they’re trying to pay off. But that’s not necessarily a bad thing – especially if grads take this time to look at their outstanding loans and assess whether it’s time to refinance or consolidate.
There are several factors that can help determine the need for a student loan switch-up. For example, rates may have gone down since you first took out your loan, or your financial situation may have improved, making you eligible for a lower rate. If you find yourself in either of these categories, you may want to consider a variable rate student loan.
So what’s the difference between variable (sometimes called “floating”) and fixed rate student loans, and how do you know which one is right for you? Here are a few factors to keep in mind:
Fixed rate student loans:
- Generally have a higher rate than variable rate student loans
- Are not affected by interest rate changes
- Charge the same monthly rate over the life of the loan
Variable rate student loans:
- Generally have a lower initial rate than fixed rate student loans
- Are affected by interest rate changes
- May charge a different rate on a monthly, quarterly, or annual basis based on interest rate changes
At SoFi, we believe in “smart borrowing.” That’s why we’ve launched our new variable rate student loan product to give our current and potential borrowers the ability to choose the loan that’s best suited to their needs. Our variable rate product is tied to the 1-Month LIBOR and offers rates that range from 2.94% APR (with Autopay) to 5.19% APR (without Autopay). And if that’s not for you, check out our newly-reduced fixed rates (now 4.99% to 6.99%). Our borrowers can save up to $26,7002 – not to mention the benefits they receive from joining our community. Whether you choose a fixed or variable rate product, the bottom line is that you should find the student loan that makes the most sense for your financial situation. The SoFi team is standing by to help you answer that question at 1-855-456-SOFI or CustomerService@SoFi.com.
Already a SoFi Borrower? Our new products are available to all members of the SoFi community. Contact our Customer Service team for more information about how you could take advantage of these new loan rates and terms.