10-year fixed-rate student loans dip back below 6%

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By Credible Staff
Credible Staff

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Credible Staff

The goal of the Credible editorial writers and staff is to help our readers get up to speed on issues surrounding student loans, mortgage, and personal finance, so you can make informed decisions. We’re here to help you stay on top of the latest news, trends, concepts, and changes in policy and regulations.

Updated October 17, 2024, 2:41 PM EDT

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Average private student loan rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to take out student loans fell for both 10-year fixed rates and 5-year variable rates during the week of May 9, 2022:

  • 10-year fixed rate: 5.56%, down from 6.03% the week before, -0.47
  • 5-year variable rate: 4.34%, down from 5.23% the week before, -0.89

Rates for both 5-year and 10-year private student loans fell this week, with rates for a 5-year term falling by nearly a full point, and rates for a 10-year term dropping for the third week in a row. With these decreases, rates for both terms are significantly lower than their highest levels in April. Borrowers can enjoy interest savings with a 5-year variable rate or a 10-year fixed-rate loan right now.

You should always exhaust federal student loan options first before turning to private student loans to cover 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 costs and living expenses, which might not be covered by your federal education loans.

Interest rates and terms on 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 federal and private interest rates?

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

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 your interest rate is likely to be.

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

How does student loan interest work?

An interest rate is a percentage of the loan periodically tacked onto your balance — essentially the cost of borrowing money. Interest is one way lenders can make money from loans. Your monthly payment often pays interest first, with the rest going to the amount you initially 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 variable rate:

  • With a fixed rate, your monthly payment amount will stay the same over the course of your loan term.
  • With a variable rate, your payments might rise or fall based on changing interest rates.

Calculate your savings

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

Once you enter 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.

About Credible

Meet the contributor:
Credible Staff
Credible Staff

The goal of the Credible editorial writers and staff is to help our readers get up to speed on issues surrounding student loans, mortgage, and personal finance, so you can make informed decisions. We’re here to help you stay on top of the latest news, trends, concepts, and changes in policy and regulations.

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Fox Money is a property of Credible Operations, Inc., which is majority-owned indirectly by Fox Corporation. This material may not be published, broadcast, rewritten, or redistributed. All rights reserved. Use of this website (including any and all parts and components) constitutes your acceptance of Fox's Terms of Use and Updated Privacy Policy | Your Privacy Choices.