Rates on 10-year fixed-rate private student loans rose last week. Despite the rise, if you’re interested in getting a private student loan, you can still get a relatively low rate.
Related: Best Private Student Loans
Average Private Student Loan Interest Rates
For borrowers with a credit score of 720 or higher who prequalified on Credible.com’s student loan marketplace from May 12 to May 17, the average fixed interest rate on a 10-year private student loan was 8.51%. On a five-year variable-rate loan, the rate was 9.89%, according to Credible.com.
These rates are accurate as of the week of May 12, 2025.
Related: Best Private Student Loans
Fixed-Rate Loans
The average fixed rate on 10-year loans last week increased by 1.10% to 8.51%. The week prior, the average stood at 7.41%.
Borrowers currently in the market for a private student loan will receive a higher 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 8.14%, 0.37% lower than today’s rate.
Let’s say you financed $20,000 in student loans at today’s average fixed rate. You’d pay around $248 per month and approximately $9,769 in total interest over 10 years, according to Forbes Advisor’s student loan calculator.
Variable-Rate Loans
Last week, rates on variable five-year student loans moved up, reaching 9.89% from 7.68% the week prior.
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 9.89%, you’d pay approximately $424 on average per month. In total interest over the life of the loan, you’d pay around $5,432. Of course, since the interest rate is variable, it could fluctuate up or down from month to month.
Getting a Private Student Loan
Private student loans may be a good option if you reach the annual borrowing limits for federal student loans or if you’re otherwise ineligible for them. You should consider a federal student loan as your first option, as interest rates are generally lower and you’ll enjoy more liberal repayment and forgiveness options than with a private loan.
To get a private student loan, you’ll generally need to apply directly through a non-federal lender. You can find private student loans through banks, credit unions and online entities. Nonprofit organizations, state agencies and colleges also offer loans.
It’s important to note that you’ll need a qualified co-signer if you have limited credit history, as undergraduates often do.
When applying for a private student loan, take into consideration the following:
- Your qualifications. Private student loans are credit-based. Lenders typically require a credit score in the higher 600s. This is where having a co-signer can be particularly beneficial.
- Where to apply. You can apply directly on the lender’s website, via mail or over the phone.
- Your options. Look at what each lender offers and compare the interest rate, term, future monthly payment, origination fee and late fee. Also, check to see if the lender offers a co-signer release so that the co-borrower can eventually come off of the loan.
Comparing Private Student Loans
When looking for the best private student loan option, take a close look at the overall cost of the loan, including the interest rate and fees. It’s also important to consider the type of help the lender offers if you can’t afford your payments.
Remember, those with good or excellent credit typically get the best rates.
How much should you borrow? Experts generally recommend borrowing no more than you’ll earn in your first year out of college. How much can you borrow? Some lenders cap the amount you can borrow each year, while others don’t. When you’re shopping around for a loan, take to lenders about how the loan is disbursed and what costs it will cover.
Current Federal Student Loan Interest Rates
If you need to borrow for school, federal student loans are generally the best option. This is because federal loans offer various borrower protections, such as access to income-driven repayment plans and student loan forgiveness programs. Additionally, most federal loans don’t require a credit check or co-signer.
The Rate You’ll Receive
The rate you receive depends on whether you’re getting a fixed or variable loan. Rates, in part, are based on your creditworthiness—those with higher credit scores often get the lowest rates. But your rate is based on other factors as well. Credit history, income and even the degree you’re working on and your career can play a part.
What Are the Benefits of Private Student Loans?
It’s generally a good idea to max out your eligibility for federal financial aid before borrowing private student loans, but private loans have some benefits. For one thing, they don’t have the same annual borrowing limits as federal loans. Many lenders let you borrow up to your cost of attendance minus any other financial aid you’ve already received.
Plus, you can usually apply throughout the year with a fast, easy online application. For instance, you can apply for a private loan if you need funds halfway through the semester. Some lenders can fund your loan in a week or two, though others take longer.
Private lenders can also offer competitive interest rates, especially to borrowers with excellent credit. Some private loans don’t have any fees, so you don’t have to worry about origination fees, administrative fees or even late fees in some cases.
You also may not have to make payments on your private student loan while you’re in school or for six to nine months after you graduate, depending on the lender. Some lenders offer additional perks to borrowers, such as forbearance and deferment, the option to skip a payment or career counseling services.
Some private lenders offer loans to international students. International students are not eligible for federal student loans from the U.S. Department of Education, so a private student loan can provide the funds they need for college or graduate school in the U.S.
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