Private student loan interest rates drop for 5- and 10-year loans
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Credible Market’s latest private student loan interest rates, updated weekly. (Stock)
During the week of November 7, 2022, average private student loan rates fell for borrowers with a credit score of 720 or higher who used the Credible Marketplace to take out 10-year fixed rate loans and 5-year variable rate loans.
- 10-year fixed rate: 7.62%, compared to 7.71% the previous week, -0.09
- 5-year variable rate: 6.12%, compared to 8.37% the previous week, -2.25
With Credible, you can compare private student loan rates from multiple lenders without affecting your credit score.
Private student loan interest rates fell this week for 10-year fixed-rate loans and 5-year variable-rate loans. Ten-year loans fell slightly by 0.09 percentage points, while rates for 5-year terms saw a larger drop of more than two percentage points. Despite this week’s rate cuts, rates for both loan terms are higher than they were this time last year.
Still, it should be noted that borrowers with good credit may find a lower rate with a private student loan than with some federal loans. For the 2022-23 school year, federal student loan rates will range from 4.99% to 7.54%. Private student loan rates for borrowers with good to excellent credit may be lower at this time.
Since federal loans come with certain benefits, like access to income-driven repayment plans, you should always exhaust federal student loan options before turning to private student loans to cover any funding shortfalls. Private lenders such as banks, credit unions, and online lenders offer private student loans. You can use private loans to pay for education and living expenses, which may not be covered by your federal student loans.
Private student loan interest rates and terms may vary depending on your financial situation, credit history and the lender you choose.
Take a look at the rates from Credible Partner Lenders for borrowers who used the Credible Marketplace to select a lender during the week of November 7:
Private student loan rates (diploma and undergraduate)
Student Loan Weekly Rate Trends
Who sets federal and private interest rates?
Congress sets interest rates for federal student loans each year. These fixed interest rates depend on the type of federal loan you take out, your dependent status, and your school year.
Private student loan interest rates can be fixed or variable and depend on your credit, repayment term and other factors. Generally, the better your credit score, the lower your interest rate is likely to be.
You can compare rates from multiple student lenders using Credible.
How does student loan interest work?
An interest rate is a percentage of the loan periodically added to your balance – essentially the cost of borrowing money. Interest is a way lenders make money from loans. Your monthly payment often pays interest first, with the rest going to 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 rate or variable rate loan?
Here is the difference between a fixed rate and a variable rate:
- With a fixed rate, your monthly payment amount will remain the same for the duration of your loan.
- With a floating rate, your payments can go up or down as interest rates change.
Comparative purchases 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 term 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 term of the loan, and the total amount you’ll repay.
Credible is a multi-lender marketplace that allows consumers to discover the financial products best suited to their particular situation. Credible’s integrations with major lenders and credit bureaus allow consumers to quickly compare accurate and personalized loan options without putting their personal information at risk or affecting their credit score. The Credible Marketplace delivers an unparalleled customer experience, as evidenced by over 4,300 positive Trustpilot reviews and a TrustScore of 4.7/5.