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If you’re paying high interest rates on your student loans, it can take longer and cost you more to pay them back.

Whether you have federal or private student loans, here’s how you can get lower interest rates:

  1. Refinance your student loans
  2. Sign up for automatic payments
  3. Ask about loyalty discounts and more
  4. Make on-time payments

1. Refinance your student loans

Student loan refinancing allows you to pay off private or federal loans that have high interest rates with a new private loan. Refinancing lets you adjust your repayment term and monthly payment as well as your interest rate. If you’ve got variable-rate loans, you can convert them into a fixed-rate loan.

Not all lenders will offer you the same rate or terms for student loan refinancing. So you’ll want to get actual rates from the best student loan refinance lenders before you make a decision. You’ll need good credit, but you may qualify for lower rates if you apply with a cosigner.

LenderVariable rates from (APR)Fixed rates from (APR)Loan maximumMin. credit score
advantage education loan consolidation

Advantage review
N/A4.54%+$500,000+670
brazos student loan refinancing

Brazos review
4.01%+3.91%+
$250,000690
citizens bank student loans

Citizens Bank review
2.29%+¹3.45%+¹$350,000
(depending on degree type)
Does not disclose
college ave student loans

College Ave review
2.62%+23.54%+2$300,000
(depending on degree type)
Does not disclose
edvestinu student loan consolidation

EDvestinU review
4.64%+54.93%+5$200,000750
elfi student loans

ELFI review
2.39%+33.14%+3None680
mefa refinancing

MEFA review
4.08%+3.95%+None670
penfed purefy student loan consolidation

PenFed review
2.42%+3.48%+$300,000670
rhode island student loan authority refinancing

RISLA review
N/A3.49%+$250,000
(depending on degree type)
680
sofi student loan refinancing

SoFi review
2.31%+43.46%+4Up to the full balance of your qualified education loansDoes not disclose
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All APRs reflect autopay and loyalty discounts where available | 1Citizens Bank Disclosures | 2College Ave Disclosures | 3 ELFI Disclosures | 4SoFi Disclosures | 5EDvestinU Disclosures


Citizens Bank Education Refinance Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate ("LIBOR") published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of November 1, 2019, the one-month LIBOR rate is 1.80%. Variable interest rates range from 2.15%-8.82% (2.15%-8.82% APR) and will fluctuate over the term of the borrower's loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 3.45%-9.02% (3.45%-9.02% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.

2. Sign up for automatic payments

One of the quickest ways to get a rate discount is to check if your lender or loan servicer offers an automatic payment discount. Most autopay discounts reduce your rate by 0.25% percentage points. That might not seem like a lot, but every little bit helps.

 Without the 0.25% discountWith the 0.25% discount
Loan amount$40,000$40,000
Interest rate6.80%6.55%
Total interest$15,239$14,625
Savings$0$614
How authorizing automatic loan payments can lower your student loan repayment costs. Assumes 10-year repayment term.

If your total student loan debt is $40,000, for example, that small rate discount can save you more than $600 over the life of a loan with a 10-year repayment term. You’ll save even more if your loan balance is higher.

In addition to lowering your interest rate, authorizing automatic payments can:

  • Help you stay current on your loans
  • Avoid costly late fees and damage your credit score
  • Help you improve your credit by establishing a history of on-time payments

3. Ask about loyalty discounts and more

There’s another kind of interest rate discount that some private lenders offer to reward customers for their loyalty. If you already have an account with a lender, you may qualify for a loyalty discount on student loans that’s typically 0.25%.

Citizens Bank for example, offers a 0.25% loyalty discount on student loans if you have one a checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans with Citizens.

Some lenders offer even bigger “relationship-based” discounts to customers who maintain high balances in a checking or savings account.

Because borrowers who earn their degrees are less likely to default on their loans, you may also be able to earn rewards on private loans for earning good grades or graduating:

  • Discover offers a one-time cash reward equal to 1% of your original loan amount if you earn a 3.0 grade point average during an academic term covered by your loan.
  • SunTrust’s Custom Choice Loan rewards you with a 2% principal reduction if you earn your degree.

Ask your lender if there are any other discounts you qualify for. You might be surprised at how much lower you can get your rate.

4. Make on-time payments

On-time payment history is a key component of your credit score. It also gives lenders a chance to reward you for good behavior.

Some lenders offer an interest rate discount after you’ve made a specific number of on-time payments. For example, you might be offered a 1% rate discount after 36 monthly payments, or 2% after 48 months of on-time payments. Not all lenders offer on-time payment discounts, but it doesn’t hurt to ask yours if it’s available.

What to do if you can’t lower your student loan interest rates

If you’re not able to lower your interest rates, there are other ways to tackle your student loans. Here are a few other ways you can pay your loans off faster:

  1. Pay more each month
  2. Avoid alternative payment plans
  3. Focus on your highest interest debt

1. Pay more each month

Try making larger monthly payments rather than the minimum amount due. While you may not lower your interest rate, you’ll end up paying less in interest over the life of the loan since you’ll pay off student loans sooner.

You can also work towards making an extra payment on your student loan, whether it’s every other month or once a year. Consider making full payments twice a month, too, if your budget allows it.

2. Avoid alternative payment plans

Income-driven repayment plans are great if you can’t afford to make on-time minimum payments every month. But they can extend your loan terms from 10 years to as long as 25 years. That’s a long time to be paying back your loans.

If you stick to the standard repayment plan, you’ll be paid in full within a decade. When you extend your loan term, you may get a lower monthly payment, but you can end up paying a lot more in interest.

3. Focus on your highest interest debt

If you’re paying off multiple loans at once, you may have a few different interest rates. Create a document that lists all your loans, including what you owe, the monthly payment, and interest rate.

While making minimum payments on all your loans, put any extra money you can toward your highest interest debt. Once the loan with the highest interest is paid in full, start to focus on the loan with the next-highest interest. Do this until all your loans are paid off.

It’s called the debt avalanche method, and it can help you save money in interest over time.

Tackle your high student loan interest rates

Reducing your student loan interest rates isn’t always easy, but comparing refinancing lenders is a good way to see if you could be paying a lower interest rate on your loans.

Don’t confuse refinancing with federal loan consolidation, which doesn’t provide an interest rate reduction. Also, if you’re thinking about refinancing federal student loans, keep in mind that you’ll give up access to programs like income-driven repayment with the potential for loan forgiveness.

Still on the fence? Use a student loan calculator to see what you might save by refinancing your student loans.

Find out if refinancing is right for you

  • Compare actual rates, not ballpark estimates – Unlock rates from multiple lenders with no impact on your credit score
  • Won’t impact credit score – Checking rates on Credible takes about 2 minutes and won’t impact your credit score
  • Data privacy – We don’t sell your information, so you won’t get calls or emails from multiple lenders

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About the author
Matt Carter
Matt Carter

Matt Carter is a Credible expert on student loans. Analysis pieces he’s contributed to have been featured by CNBC, CNN Money, USA Today, The New York Times, The Wall Street Journal and The Washington Post.

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