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The average private student loan rate for borrowers with credit scores of 720 or higher who have used the Credible Market to take out increased student loans for both fixed and variable rates during the week of October 25, 2021.
- 10-year fixed rate: 6.75%, compared to 5.81% the previous week, + 0.94
- 5-year variable rate: 5.43% compared to 4.19% the previous week, +1.24
Thanks to Credible, you can compare private student loan rates from lenders without affecting your credit score.
Last week, private student loan rates increased for fixed 10-year and variable 5-year terms. 10-year fixed student loan rates haven’t been higher since the week of February 15, 2021, when they averaged 6.85%. Likewise, 5-year variable student loan rates climbed more than a percentage point to their highest level since March. With the volatility of private student loan rates, it’s especially important that borrowers exhaust federal student loan options first. 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 might not be covered by your federal student loans.
The interest rates and terms for private student loans can vary depending on your financial situation, credit history, and the lender you choose.
Take a look at our partner lender rates for borrowers who used the Credible Marketplace to select a lender during the week of October 25.
Private student loan rate (diploma and undergraduate)
Trends in weekly student loan rates
Who sets federal and private interest rates?
Congress sets the interest rates on federal student loans annually. These fixed interest rates depend on the type of federal loan you take out, your dependency status, and the year of study.
The interest rates for 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 is likely to be.
You can compare the rates of several 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 one way lenders earn money from loans. Your monthly payment often pays the 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, the amount of your monthly payment will remain the same for the duration of your loan.
- With a variable rate, your payments can go up or down based on changes in interest rates.
Comparison of purchases for private student loan rate is easy when using Credible.
Calculate your savings
Using a student loan interest calculator will help you estimate your monthly payments and the total amount you owe over the term of your federal or private student loans.
Once you enter your information, you will be able to see what your estimated monthly payment will be, the total you will pay in interest over the term of the loan, and the total amount you will 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 offers an unparalleled customer experience as evidenced by more than 4,300 positive reviews on Trustpilot and a 4.7 / 5 Octoberscore.