Rates on 10-year fixed-rate private student loans moved down last week. If you’re interested in picking up a private student loan, you can still get a relatively low rate.
The average fixed interest rate on a 10-year private student loan was 6.19% from March 24 to March 29. 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 7.09% among the same population, according to Credible.com.
These rates are accurate as of March 24, 2025.
Related: Best Private Student Loans
Fixed-Rate Loans
Last week, the average fixed rate on 10-year loans fell by 2.93% to 6.19%. The week prior, the average stood at 9.12%.
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 8.77%, 2.58% higher than today’s rate.
A borrower who finances $20,000 in private student loans at today’s average fixed rate would pay around $224 per month and approximately $6,874 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 down last week to 7.09% on average from 8.92%.
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.
Let’s say you financed a $20,000 five-year loan with a variable interest rate of 7.09%. You’d pay about $397 on average per month. You’d pay approximately $3,812 in total interest over the life of the loan. Keep in mind that since the interest is variable, it could fluctuate up or down from month to month.
Related: How To Get A Private Student Loan
Know 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.
Shopping for 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.
Remember, those with good or excellent credit typically get the best rates.
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.
