Private student loan interest rates are stable for borrowers with credit scores of 720 or higher who used the Credible marketplace to take out 5-year variable-rate loans and slightly higher for 10-year fixed-rate loans.
Here are the latest trends in private student loan interest rates from the Credible marketplace, updated weekly:
During the week of Nov. 11, 2024:
- Rates on 10-year fixed-rate student loans averaged 7.97%, up from 7.81% last week and down from 8.09% a year ago. Rates hit a record low of 2.81% on Dec. 20, 2021.
- Rates on 5-year variable-rate student loans averaged 9.22%, the same as last week and down from 12.00% a year ago. Rates hit a record low of 1.84% on Feb. 8, 2021.
Private student loan rates: Historical trends
The chart above shows average selected prequalified rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to select a lender. The chart lists weekly rates from the last three years.
Like most other types of borrowing, private student loan rates had been elevated in recent years as the Federal Reserve kept the federal funds rate high to try to control inflation. Fed policymakers lowered the benchmark rate in September and again in November.
While Fed rate changes can significantly affect the cost of private student loans, federal student loans are generally more stable. That’s because federal loans come with fixed rates that are set annually by Congress. For the 2024-25 school year, federal loan rates are:
- Direct Subsidized Loans and Direct Unsubsidized Loans (undergrads): 6.53%
- Direct Unsubsidized Loans (professional or graduate students): 8.08%
- Direct PLUS Loans (professional or grad students, or parents of undergrads): 9.08%
However, not everyone is eligible for federal student loans, or borrowers may reach their maximum borrowing limits. In that case, private student loans can provide a convenient source of funding for college.
In addition to general economic conditions, rates on private student loans depend on factors including the borrower’s or cosigner’s credit, income, and loan term. Because each lender is likely to offer you a different rate, it’s important to research and compare lender offers to see which can offer you the best deal.
Private student loan interest rates by credit score
If you qualify for a private student loan, the interest rate offered to you depends on many factors, including:
- Your credit: One of the most significant factors that determines your interest rate is your credit score and credit report. If you have weak credit, consider adding a cosigner to your application. Doing so can help you get approved or qualify for better rates than you would have alone.
- Your debt-to-income ratio (DTI): Your DTI represents how much of your monthly income goes to paying off your debt. The lower your debt-to-income ratio, the lower rates you can likely qualify for.
- If you choose a fixed or variable rate: Fixed rates stay the same over the life of your loan, while variable rates can fluctuate according to market conditions. It’s common for variable rates to start out lower than fixed ones, but it’s possible that variable rates could increase in the future, making your loan more expensive.
- The loan repayment term: Lenders typically view longer-term loans as riskier. Because of this, you may get a lower interest rate if you agree to pay off your loan more quickly. Note that this will make your monthly payments higher than a longer loan term would.
Every lender has its own methods of evaluating borrowers, so it’s a good idea to request private student loan rates from multiple lenders and compare your options. Through Credible, you can compare rates from various lenders without affecting your credit score.
About Credible
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 7,800 Trustpilot reviews and a TrustScore of 4.8/5.