Interest rates on private student loans drop by nearly 2 percentage points for 5-year variable-interest loans
Our goal here at Credible Operations, Inc. , NMLS Number 1681276, and referred to as “Credibility” below, is to provide you with the tools and confidence you need to improve your financial standing. Although we promote products from our partner lenders who compensate us for our services, all opinions are our own.
The latest private student loan interest rates from the Credible Marketplace, updated weekly. (iStock)
During the week of January 16, 2023, on average Private student loan rates It fell for borrowers with credit scores of 720 or higher who used the Credibility Marketplace to get 10-year fixed-rate loans and 5-year floating-rate loans.
- Fixed rate for 10 years: 6.83%, down from 7.41% the previous week, -0.58
- 5-year variable rate: 7.19%, down from the previous week’s 8.90%, -1.71
With credibility, you can Compare rates for private student loans from multiple lenders without affecting your credit score.
Interest rates on private student loans dropped significantly this week for both 10-year variable rate loans and 5-year variable rate loans. 10-year loan rates decreased by 0.58 percentage points, while 5-year loans witnessed a larger decline by 1.71 percentage points. Despite the declines this week, rates for both loan terms are higher than they were at the same time last year.
However, 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 can be lower right now.
Because federal loans come with certain benefits, such as access to income-driven repayment plans, you should always exhaust your 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 offer private student loans. You can use private loans to pay for tuition and living expenses, which your federal education loans may not cover.
The interest rates and terms of private student loans can vary based on your financial situation, credit history, and the lender you choose.
Take a look at Trusted Partner Lender’s rates for borrowers who used the Trusted Market to select a lender during the week of January 16:
Private Student Loan Rates (Graduate and Undergraduate)
Weekly student loan rate trends
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 get, your dependency status and your year in school.
The interest rates on private student loans can be fixed or variable and depend on credit, repayment term, and other factors. As a general rule, the better your credit score, the lower your interest rate is likely to be.
Could you Compare rates from several student loan lenders using credibility.
How does student loan interest work?
The interest rate is a percentage of the loan that is periodically deposited into your balance – essentially the cost of borrowing money. Interest is one of the ways lenders can make money from loans. Your monthly payment often pays the interest first, and the rest goes toward the amount you initially borrowed (the principal amount).
Having a lower interest rate can help you save money over the life of the loan and pay off your debt faster.
What is a fixed rate loan versus a variable rate loan?
Here’s the difference between a fixed and a variable rate:
- With fixed exchange rate, The monthly payment amount will remain the same over the life of the loan.
- With variable rate, Your payments may go up or down based on the changing interest rates.
Compare shopping for Private student loan rates It’s easy when you use credibility.
Calculate your savings
using a Student loan interest calculator It 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 enter your information, you will be able to see your estimated monthly payment, the total you will pay in interest over the life of the loan and the total amount you will have to pay back.
about credibility
Credible is a multi-lenders marketplace that enables consumers to discover financial products best suited to their unique circumstances. Credible’s integration with leading lenders and credit bureaus allows consumers to quickly compare accurate and personal loan options – without putting their personal information at risk or affecting their credit score. Credibility Market provides an unparalleled customer experience, as evidenced by 4,300 positive Trustpilot reviews and TrustScore 4.7/5.