Interest rates on private student loans are rising, but borrowers with good credit can still save
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Average private student loan Prices for borrowers with credit scores of 720 or higher using the Credible marketplace to close student loans, for the week of June 13, 2022, both 10-year fixed and 5-year variable interest rates increased:
- 10 years fixed rate: 6.30%, up from 5.61% the week before, +0.69
- 5 years variable interest rate: 4.43%, up from 3.67% in the previous week, +0.76
Through Credible you can Compare private student loans Prices from multiple lenders without hurting your credit score.
Home student loan rates rose last week for both 10-year fixed and 5-year adjustable-rate loans, with 5-year rates up more than three-quarters of a point. Interest rates on a 10-year fixed-rate loan rose more than half a point. This week’s increases mean interest rates on both types of loans are higher than they were at this point last year.
However, it’s worth noting that borrowers with good credit ratings may find a lower interest rate on a private student loan than on federal loans. For the 2022-2023 academic school year, federal student loan rates will range from 4.99% to 7.54%. Interest rates on personal student loans for borrowers with good to excellent credit ratings are currently lower.
Because federal loans come with certain benefits, such as access to income-based repayment plans, you should always explore federal student loan options first before turning to private student loans to fill funding gaps. Private lenders such as banks, credit unions, and online lenders offer private student loans. Personal loans can help you fund college and living expenses that may not be covered by your federal student loan.
Interest rates and terms on personal student loans can vary depending on your financial situation, credit rating, and the lender you choose.
Take a look at Credible partner lender interest rates for borrowers who used Credible’s marketplace to select a lender during the week of June 13:
Interest on private student loans (graduates and students)
Weekly student loan interest rate trends
Who sets federal and private interest rates?
Congress sets the federal interest rate on student loans each year. These fixed interest rates depend on the type of federal loan, your dependency status, and your school year.
Interest rates on personal student loans can be fixed or variable and depend on your credit rating, term, and other factors. In general, the better your credit score, the lower your interest rate is likely to be.
You can Compare interest rates from multiple lenders for student loans Use credibly.
How does student loan interest work?
An interest rate is a percentage of the loan that is periodically tacked onto your balance — essentially the cost of borrowing. Interest is one way lenders can make money. Your monthly payment often pays interest first, with the rest going to the amount you originally borrowed (the principal).
A low interest rate can help you save money over the life of the loan and pay off your debt faster.
What is a fixed vs. adjustable rate loan?
Here is the difference between a fixed and variable interest rate:
- With a fixed rate, Your monthly payment amount remains the same throughout the life of your loan.
- With a variable rate, Your payments may increase or decrease due to changing interest rates.
Comparing interest rates on personal student loans is easy when you use Credible.
Calculate your savings
A student loan interest rate calculator can help you estimate your monthly payments and the total amount you owe over the life of your government or private student loans.
Once you’ve entered your information, you can see what your estimated monthly payment will be, the total interest you will pay over the life of the loan, and the total amount you will repay.
Credible is a multi-lender marketplace that enables consumers to discover financial products that best fit their unique circumstances. Credible’s integration with leading lenders and credit reporting agencies allows consumers to quickly compare accurate, personalized loan options — without compromising their personal information or compromising their credit score. The credible marketplace offers an unparalleled customer experience as reflected by over 4,300 positive Trustpilot reviews and a TrustScore of 4.7/5.