The average private student loan interest rates spiked for borrowers with credit scores of 720 or higher who used the Credible marketplace to take out 10-year fixed-rate loans and 5-year variable-rate loans the week of June 12, 2023.
For 10-year fixed-rate loans, interest rates rose 0.23 percentage points, while 5-year variable-rate loans saw a staggering increase of 5.78 percentage points. Rates for both loan terms are higher than they were this time last year.
Check out recent private student loan interest rates for borrowers who used the Credible marketplace to select a lender.
For many borrowers, federal student loans may be the first choice for borrowing. Federal loans come with fixed, standardized interest rates and most loans don’t require a credit check. In the 2022-23 school year, for example, federal student loan rates ranged from 4.99% to 7.54%. Borrowers can also access unique federal protections, such as income-driven repayment plans, forgiveness opportunities, and more flexible deferment and forbearance.
If you’re not eligible for federal loans or have maxed out your borrowing limits, consider private student loans. Private lenders include banks, credit unions, and online lenders. Depending on your financial situation, credit history, and the lender you choose, interest rates and terms on private student loans can vary — but well-qualified applicants could find lower rates than what’s available on federal loans.
If you’re thinking about borrowing for your education, Credible’s website lets you easily compare private student loans in minutes.
Federal student loan interest rates are set by Congress each year. The rate you receive depends on the type of federal loan you take out, your dependency status, and the type of program you’re enrolled in. In the 2022-23 school year, federal rates ranged from 4.99% to 7.54%.
Private student loan interest rates can be fixed or variable and are determined based on your credit, repayment term, your lender, and other factors. As a general rule, the better your credit score, the lower your interest rate is likely to be.
Interest is what you pay to borrow money. It’s expressed as a percentage of the loan amount and eats up a portion of each payment. Your monthly payment often pays off accrued interest first, with the rest going to the amount you initially borrowed (the principal).
A lower interest rate could help you save money over the life of the loan and pay off your debt faster.
Private student lenders often allow borrowers to choose between a fixed and variable rate:
You might find variable rates appealing since they often start lower than fixed rates. However, variable rates are riskier because they can rise unexpectedly — potentially costing you more in the long term.
If you’re thinking about borrowing for your education, Credible.com lets you easily compare private student loans in minutes.
The interest rate on your private student loan can be affected by many factors, including:
If your interest rate is too high, there are a few ways you can lower it.
Credible is a multi-lender marketplace that empowers consumers to discover financial products that are the best fit for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options ― without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 4,300 positive Trustpilot reviews and a TrustScore of 4.7/5.