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During the week of October 3, 2022, average private student loan interest rates decreased for borrowers with a credit score of 720 or higher who used Credible market to get 10-year fixed-rate loans and increased for 5-year variable-rate loans .
- 10-year fixed rate: 6.37%, from 7.06% last week, -0.69
- 5 year variable rate: 7.97%, from 6.77% last week, +1.20
Through Credible, you can compare private student loan rates from multiple lenders without affecting your credit score.
Private student loan rates fell significantly this week on 10-year fixed-rate loans, while rates on 5-year variable-rate loans soared. Ten-year loans fell 0.69 percentage points, while five-year rates rose more than a full percentage point. In addition to this week’s rate changes, interest rates for both loan terms are higher than they were last year.
However, it’s worth noting that borrowers with good credit may find a lower interest rate with a private student loan than with some federal loans. For the 2022-23 academic school year, federal student loan interest rates will range from 4.99% to 7.54%. Private student loan rates for borrowers with good to excellent credit may be lower right now.
Because federal loans come with certain benefits, such as access to income-based repayment plans, you should always exhaust your federal student loan options first before turning to private student loans to fill any funding gaps. Private lenders such as banks, credit unions and online lenders provide private student loans. You can use private loans to pay for education and living expenses that may not be covered by your federal student loans.
Interest rates and terms of private student loans can vary depending on your financial situation, credit history and the lender you choose.
Take a look at credible partner lender rates for borrowers who used the Credible marketplace to choose a lender during the week of October 3rd:
Private Student Loan Interest Rates (Graduate and Undergraduate)
Weekly Student Loan Interest Rates
Who sets federal and private interest rates?
Congress sets federal student loan interest rates each year. These fixed rates depend on the type of federal loan you receive, your dependency status, and your year of study.
Private student loan interest rates 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 the interest rate is likely to be.
You can compare rates from multiple student loan lenders using Credible.
How does student loan interest work?
The interest rate is a percentage of the loan that is charged periodically to your balance – essentially the cost of borrowing money. Interest is one way lenders can make money on loans. Your monthly payment often pays interest first, with the balance going towards the amount you originally borrowed (the principal).
Getting a low interest rate could help you save money over the life of the loan and pay off your debt faster.
What is a fixed vs variable rate loan?
Here’s the difference between a fixed and a variable rate:
- With fixed rate, Your monthly payment amount will remain the same for the duration of your loan.
- With variable rate, your payments may increase or decrease as interest rates change.
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 federal or private student loans.
Once you’ve entered your information, you’ll be able to see what your estimated monthly payment will be, the total you’ll pay in interest over the life of the loan, and the total amount you’ll pay back.
Credible is a multi-lender marketplace that empowers consumers to discover financial products that best fit their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options – without compromising their personal information or affecting their credit score. Trusted Market provides an unrivaled customer experience as reflected above 4,300 positive Trustpilot reviews and TrustScore 4.7/5.