Last week, the average interest rate on 10-year fixed-rate private student loans moved up. This drop in rates is good news for borrowers interested in pursuing private student loans to make up for a gap in college funding.
The average fixed interest rate on a 10-year private student loan was 7.60% from March 10 to March 15. That’s for borrowers with a credit score of 720 or higher who prequalified on Credible.com’s student loan marketplace. The average interest rate on a five-year variable-rate loan was 6.04% among the same population, according to Credible.com.
These rates are accurate as of March 10, 2025.
Related: Best Private Student Loans
Fixed-Rate Loans
Last week, the average fixed rate on a 10-year loan climbed by 0.42% to 7.60%. The average stood at 7.18% the week prior.
Borrowers currently in the market for a private student loan will receive a lower rate than they would have at this time last year. At this time last year, the average fixed rate on a 10-year loan was 8.34%, 0.74% higher than today’s rate.
Let’s say you financed $20,000 in student loans at today’s average fixed rate. You’d pay around $238 per month and approximately $8,614 in total interest over 10 years, according to Forbes Advisor’s student loan calculator.
Variable-Rate Loans
Average variable rates on five-year loans moved even lower last week to 6.04% on average from 7.18%.
In contrast to fixed rates, variable interest rates fluctuate over the course of a loan term. Variable rates may start lower than fixed rates, especially during periods when rates are low overall, but they can rise over time.
Private lenders often offer borrowers the option to choose between fixed and variable interest rates. Fixed rates may be the safer bet for the average student, but if your income is stable and you plan to pay off your loan quickly, it could be beneficial to choose a variable loan.
If you were to finance a $20,000 five-year loan at a variable interest rate of 6.04%, you’d pay approximately $387 on average per month. In total interest over the life of the loan, you’d pay around $3,222. Of course, since the interest rate is variable, it could fluctuate up or down from month to month.
Related: How To Get A Private Student Loan
Who Is Eligible for a Student Loan?
To get a private student loan for college or graduate school, you’ll need to meet a lender’s underwriting requirements for credit and income, and other criteria. Here are the main requirements:
- Have a good credit score.
Lenders look at your credit, income and other financial characteristics to assess your risk as a borrower. They typically want to see good credit, though specific expectations vary by lender.
- Apply with a co-signer
You may need to apply with a creditworthy co-signer to qualify for a student loan, especially if you’re an undergraduate student without much of a credit history.
- Attend an eligible school.
Lenders want to see that you’re enrolled or planning to enroll in a qualifying program at an eligible institution.
- Be at least 18.
You’ll need to be the age of majority in your state, which is usually 18 or 19.
- Meet any citizenship requirements.
You need to be a U.S. citizen or permanent resident. However, some lenders provide loans for international students, though they may require those borrowers to apply with a U.S. citizen or permanent resident as their co-signer.
How To Compare Private Student Loans
First, take a look at the loan’s overall cost. Consider both interest rate and fees. Also, look at the type of help each lender offers if you’re not able to afford your payments.
Keep in mind that the best rates are only available to those with good or excellent credit.
Experts generally recommend that you borrow no more than what you’ll earn in your first year out of college. While some lenders cap the amount of money you can borrow each year, others don’t. When comparing loans, figure out how the loan will be disbursed and what costs it covers.
The Rate You’ll Receive
Lenders offering private student loans generally offer both fixed and variable interest rates. These rates are, in part, based on your creditworthiness. Generally, the higher your credit score, the lower the interest rate you’ll receive. But credit history, income, the degree you’re working on and your career can factor into the interest rate you receive as well.
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