A lower student loan interest rate can save you hundreds or even thousands of dollars over the life of your loan. And if you need to borrow from a private lender, the rate you qualify for isn’t necessarily set in stone.
Private student loan rates vary by lender and borrower, giving you an opportunity to shop around for a better deal. Having strong credit, steady income and manageable debt — or applying with a creditworthy co-signer — can also help you qualify for a lower rate.
Federal student loans generally should come first because they offer fixed rates and borrower protections that private loans don’t. But if federal aid doesn’t cover your full cost of attendance, comparing private lenders and taking steps to strengthen your application could help you pay less to borrow.
Here’s how to improve your chances of getting a low-rate student loan.
What is considered a low student loan rate?
There’s no single interest rate that qualifies as “low” for a student loan. Rates change with market conditions, and the rate you can get from a private lender depends largely on your credit, income, debt and whether you apply with a co-signer.
For private student loans, a low rate is generally one near the bottom of the APR ranges advertised by lenders. The strongest applicants may qualify for rates in the low single digits, while borrowers with weaker credit may receive substantially higher offers. That’s why it’s important to prequalify with multiple lenders and compare the rates you personally receive, rather than choosing a lender based on its lowest advertised rate.
Federal rates can also provide a useful benchmark. For the 2026-27 academic year, federal undergraduate Direct Loans carry a 6.52% rate, while Graduate Direct Unsubsidized Loans have an 8.07% rate. Direct PLUS Loans have a 9.07% rate. Unlike private loans, federal rates are set annually and don’t vary based on your credit.
Tip: Don’t compare interest rates alone. Look at the APR, which provides a more complete picture of borrowing costs, and consider repayment terms and borrower protections before choosing a loan.
How to get a lower private student loan rate
Private student loan rates are based in part on your credit and finances, but lenders have different eligibility requirements and pricing. Taking these steps could help you qualify for a lower rate.
1. Strengthen your credit
Your credit history is one of the primary factors private lenders use when evaluating your loan application. Before applying, review your credit reports for errors, make other debt payments on time and pay down credit card and other debt balances when possible.
Improving your credit may take time, but a stronger credit profile can increase your chances of qualifying for a lender’s more competitive rates.
2. Improve your debt-to-income ratio
Your debt-to-income ratio (DTI) compares your monthly debt responsibilities with your monthly income. A lower DTI on your credit profile indicates that less of your income is already committed to debt payments, which may make you a less risky borrower in a lender’s eyes.
3. Apply with a qualified co-signer
Many students have limited income, short credit histories or both. These factors can make it difficult to qualify for a loan or receive a low interest rate.
Adding a co-signer with strong credit may improve your chances of approval and help you qualify for a lower rate. However, co-signing carries significant responsibility: Your co-signer is legally responsible for repaying the debt if you don’t, so make sure both of you understand the loan terms before applying.
4. Compare rates from multiple lenders
Private student loan rates can vary considerably from one lender to another, even for the same borrower. Comparing several lenders gives you a better chance of finding a competitive rate based on your actual credit and financial situation.
“I also recommend shopping around for your lender, as lenders can offer varying interest rates, and the lowest one available can save you a lot of money over the life of the loan (sometimes thousands over time),” says Leslie Tayne, founder and head attorney at Tayne Law Group.
When possible, prequalify with multiple lenders before applying. Prequalification typically uses a soft credit check, which doesn’t affect your credit score, and lets you compare potential rates and terms. Focus on the offers you actually receive rather than lenders’ lowest advertised rates.
5. Consider a shorter repayment term
Some private lenders offer lower interest rates for shorter repayment terms. You’ll also pay interest for fewer years, which can substantially reduce your total borrowing costs.
The trade-off is a higher monthly payment. Before choosing a shorter term, make sure the payment comfortably fits your expected budget after graduation.
6. Look for available rate discounts
Some private student lenders offer interest rate discounts for meeting certain requirements. Automatic payment discounts are common, while other discounts may be available to existing customers or borrowers who meet lender-specific criteria, such as maintaining good grades or being a repeat customer.
A discount of even a fraction of a percentage point can reduce your interest costs, so factor any discounts you qualify for into your lender comparison.
How much can a lower student loan rate save?
Even a few percentage points can make a significant difference in overall cost over a long repayment period. For example, consider a $20,000 loan repaid over 10 years:
| Interest rate | Monthly payment | Total interest |
|---|---|---|
| 6% | $222 | $6,645 |
| 9% | $253 | $10,402 |
In this example, the three-percentage-point difference adds roughly $31 to the monthly payment and about $3,750 in interest over 10 years.Comparing total repayment costs can provide perspective between even small interest rate differences. The actual cost of your particular loan will depend on the balance, interest rate, term and fees.
Fixed vs. variable student loan rates
Private student lenders may offer fixed or variable interest rates. A fixed rate stays the same for the life of the loan, giving you predictable monthly payments and making it easier to estimate your total borrowing costs.
A variable rate can rise or fall over time based on changes to the benchmark specified in your loan agreement. Variable rates may start lower than comparable fixed rates, but there’s no guarantee they’ll stay that way. If rates rise, your monthly payment and total interest costs could increase.
A fixed rate may be the better choice if you prioritize predictable payments or expect to repay the loan over many years. A variable rate may be worth considering if it offers meaningful upfront savings and you expect to repay the loan relatively quickly, but you’ll take on the risk that your rate could increase.
When comparing private student loans, check both fixed and variable offers and consider the APR, repayment term and potential total cost, not just which option has the lowest starting rate.
Compare private student loan lenders
Rates and terms vary by lender, so compare several options before applying. Here’s a look at three private student loan lenders to consider:
| Lender | Fixed or variable rates? | Autopay discount | Why consider it |
| Sallie Mae | Fixed and variable | Available | Offers undergraduate, graduate and career training loans, with multiple in-school repayment options |
| College Ave | Fixed and variable | 0.25 percentage points | Offers flexible repayment terms and in-school payment options, with the ability to prequalify |
| SoFi | Fixed and variable | 0.25 percentage points | Offers multiple repayment terms and no application, origination or late fees |
The lender advertising the lowest APR won’t necessarily offer you the lowest rate. Compare the rates, repayment terms and monthly payments you qualify for before choosing a private student loan.
Don’t choose a student loan based on rate alone
A low interest rate can reduce your borrowing costs, but it shouldn’t be the only factor you consider when comparing private student loans. The lender advertising the lowest rate may not offer you the lowest rate — or the best overall loan terms.
“Do your research,” says Claudia Wenzel, assistant vice president of enrollment and financial services at John Carroll University. “Borrowers should understand the repayment terms, how interest is calculated and if there are any fees associated with the loan. The lowest advertised rate doesn’t necessarily mean it’s the best loan for every borrower.”
When comparing private student loan offers, look at the APR, fees, repayment term, estimated monthly payment and total repayment cost. Also compare borrower protections and flexibility, including deferment and forbearance options, in-school repayment requirements and co-signer release policies.
Ultimately, compare the offers you actually qualify for rather than lenders’ lowest advertised rates. A loan with a slightly higher rate could be a better fit if it offers more flexible repayment terms or protections you’ll be more likely to use.
Bottom line
A lower private student loan rate can save you hundreds or even thousands of dollars over the life of your loan. Strengthening your credit, improving your DTI or applying with a creditworthy co-signer may help you qualify for a more competitive rate.
But because rates and eligibility requirements vary by lender, one of the most important steps is simply to shop around. Prequalify with several private student loan lenders when possible, then compare the rates and terms you’re actually offered — not just the lowest rates advertised online.
Before choosing a loan, consider the APR, repayment term, monthly payment and borrower protections alongside the interest rate. The best private student loan is one that combines a competitive rate with terms that fit your budget and repayment needs.
FAQs about how to get a low-rate student loan
What is considered a good interest rate for a student loan?
A good student loan rate depends on current market conditions, the type of loan and your financial qualifications. There’s not a single number that represents a good interest rate. Compare the rate you’re offered with current federal rates and those from multiple private lenders, rather than relying solely on advertised minimums.
How can I get the lowest private student loan rate?
Strong credit, sufficient income, manageable debt and a co-signer with good credit can potentially help you qualify for lower private student loan rates. Shopping around and comparing multiple lenders can uncover the lowest private student loan rate you qualify for.
Does my credit score affect my student loan interest rate?
Your credit score won’t affect your interest rate when applying for federal Direct Subsidized or Unsubsidized student loans. However, private lenders will consider credit history and other financial factors when setting your rate.
Can a co-signer lower my student loan rate?
Applying with a co-signer with a strong credit profile can help you obtain a lower rate on a student loan. However, it’s essential for both parties to know that the co-signer becomes legally responsible for repayment if you don’t pay.
Should I choose the student loan with the lowest interest rate?
Always compare APR, fees, repayment terms, total borrowing costs and borrower protections along with the interest rate when choosing a student loan. While private funding at a low rate can save money over time, benefits and repayment flexibility can also make a federal student loan with a higher rate more suitable in some circumstances.