Private student loan interest rates increase in 5 years and decrease in 10 years

During the week of September 16, 2024, the average private student loan rates up for borrowers with credit scores of 720 or higher who use the Trusted marketplace to take out a 5-year variable-rate loan and down for a 10-year fixed-rate loan.

• 10-year fixed rate: 7.99%, down from 8.57% last week, -0.58
• 5-year average: 10.31%, from 8.61% last week, +1.70

With Credible, you can compare private student loan rates from multiple lenders.

For 10-year private student loans, the interest rate decreased by 0.58 percent, while the five-year interest rate on the five-year loan increased by 1.70 percent.

Borrowers with good credit can get a lower rate on private student loans than federal loans. For the 2024-25 school year, combined student loan rates will go from 6.53% to 9.08%. Private student loan rates for borrowers with excellent credit can be lower right now.

Because federal loans come with certain benefits, such as access to income-driven repayment plans, you should always use federal student loan options first before turning to private student loans to fill any financial gaps. Private lenders such as banks, credit unions, and online lenders offer private student loans. You can use a private loan to pay for educational expenses and living expenses, which may not be covered by your federal student loan.

Interest rates and terms of private student loans can vary depending on your financial situation, credit history, and the lender you choose.

Private student loan rates (graduate and undergraduate)

Who sets public and private interest rates?

Congress sets student loan interest rates each year. These fixed interest rates depend on the type of federal loan you are taking out, your dependency status and your year in school.

Interest rates on private student loans can be fixed or variable and depend on your credit, repayment term and other factors. As a general rule, the better your credit score, the lower your interest rate may be.

You can compare rates from multiple student loan lenders using Credible.

How does student loan interest work?

The interest rate is the percentage of the loan that is added to your balance periodically – which is the cost of borrowing money. Interest is one of the ways lenders make money by lending money. Your monthly payment usually pays the interest first, with the rest going towards the original loan amount (principal).

Getting a lower interest rate can help you save money over the life of your loan and pay off your debt faster.

What is a fixed versus variable rate loan?

Here is the difference between fixed and variable rate:

• With fixed rate, your monthly payment amount will remain the same throughout your loan term.
• With variable rate, your payments may increase or decrease based on changes in interest rates.

Comparison shopping for private student loan rates is easy when you use Credible.

Calculate your savings

Using a student loan interest calculator will help you estimate your monthly payments and the total amount you will owe over the life of your student or personal loans.

Once you enter your information, you will be able to see what your monthly payment will be, the amount you will pay in interest over the life of the loan and the total amount you will pay.

About Credible

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