Whether you can lower your student loan interest rate depends on your loan type. Federal rates are fixed for the life of each loan, so you can't negotiate them. Private rates depend on your credit score and history, as well as the lender. Improving your credit, adding a cosigner, and comparing lenders can help.
Refinancing can also lower your rate. However, if you refinance federal loans, they become private loans and lose federal benefits, including income-driven repayment and loan forgiveness.
In this guide, learn how to reduce your rate and when refinancing may be worth the trade-offs.
Compare student loan refinance rates
What to watch out for: While refinancing can make sense if it lowers your interest rate, refinancing federal loans means losing benefits like income-driven repayment, Public Service Loan Forgiveness (PSLF), and the federal autopay discount. Prequalify with several lenders and compare their rates with your current rate, including any autopay discount, to estimate your savings.
Can you lower the interest rate on your student loans?
Whether you can lower your rate depends on your loan type.
Federal student loan interest rates are set by Congress ahead of each school year and are the same for all borrowers. For 2026-27, undergraduate loans are 6.52%, graduate and professional loans are 8.07%, and parent PLUS loans are 9.07%.
“It’s not possible to lower rates when borrowing federal student loans,” Stacey MacPhetres, senior director of education finance for EdAssist by Bright Horizons, explains. “Interest rates reset annually, though. So it is possible that borrowers will have different interest rates for their federal student loans for each year they’re enrolled.”
The only way to obtain a lower interest rate on an existing federal loan is to refinance it into a private loan. But refinancing federal student loans comes with significant drawbacks.
Tip
If you enroll in autopay for your federal student loans by Dec. 31, 2026 at 11:59 p.m. ET, you can qualify for a temporary 1% interest rate reduction, up from 0.25%, through June 30, 2028. It covers Direct Loans disbursed on or after July 1, 2012.
Private student loan rates can vary widely based on the lender you choose, your credit score, loan amount, and loan term. Shopping around, improving your credit score, and planning ahead before applying may help you get a more affordable interest rate.
Improve your credit to qualify for a lower interest rate
If you’re applying for a private student loan, improving your credit score is one of the best ways to qualify for a lower interest rate.
“While secondary credit criteria, such as your debt-to-income ratio, duration of employment with your current employer, and income may affect eligibility for a private student loan, the interest rate depends primarily on your credit score and the credit score of the cosigner,” explains Mark Kantrowitz, a financial aid expert and author of “How To Appeal for More Financial Aid.”
Kantrowitz adds that having a cosigner with good credit can also help you secure a lower interest rate. Many undergraduate students applying for private student loans must provide a cosigner to qualify. Your cosigner becomes equally responsible for the loan, so check whether the lender offers an option to release your cosigner later.
Good to know
Undergraduate borrowers who applied for refinancing through Credible between October 2025 and September 2026 were about 1.6 times as likely to prequalify with a cosigner as without one. Plus, their interest rates were, on average, more than 1 percentage point lower.
Refinance your student loans to get a better rate
If you already have a student loan and want to reduce the interest rate you’re paying, refinancing is an option. It replaces your loan (or multiple loans) with a new one that has a different term, rate, and other features.
Whether refinancing your student loans is a smart move depends on the rate you’re paying on your current student loan debt and what rate you could qualify for on a new loan. For example, if your credit score has increased since you initially took out your loans, you may qualify for a lower rate on a new loan.
“It’s essential that you have the credit necessary to support the refinance loan with better terms or consider borrowing with a cosigner with strong credit,” says MacPhetres.
You can also combine multiple federal student loans into a federal Direct Consolidation Loan. Unlike refinancing, consolidation doesn't lower your rate. Your new rate is the weighted average of your loans' rates, rounded up to the nearest one-eighth of 1%. The primary benefit is a single monthly payment, and you keep your federal loan benefits.
Consolidating on or after July 1, 2026, limits your repayment options to the new Repayment Assistance Plan (RAP) or Tiered Standard Plan, which doesn’t qualify for Public Service Loan Forgiveness (PSLF).
Other ways to reduce your student loan rate
Another great way to reduce your student loan interest rate is to simply shop around. Get loan quotes from multiple lenders and compare each on fees, rates, and loan offerings.
Editor insight: “I recommend comparing at least three lenders before committing. Student loan interest rates can vary widely, and the best offer isn’t always from the first lender you check.”
— Richard Richtmyer, Student Loans Managing Editor, Credible
Common discounts can include:
- Setting up autopay
- Graduating on time
- Having good grades
- Making consistent on-time payments
- Having a bank account or other product with the lender
If you can’t get a lower interest rate on your student loans, make payments toward your balances while in school and during student loan grace periods. This won’t lower your interest rate, but it can reduce the amount of interest you pay over time.
When does it make sense to refinance for a lower rate?
Refinancing your student loans can make sense if your credit score has improved since you first applied for your loans, you have a creditworthy cosigner, or market rates are low enough to offset any federal benefits you'd give up.
If you have federal student loans, refinancing usually only makes sense if you’re certain you won’t need any of the benefits that come with them — such as PSLF, which can cancel student loan balances if you go into a qualifying public service career and meet other criteria, or an income-driven repayment plan that bases your monthly payments on your income.
FAQ
Can I get a lower student loan rate without refinancing?
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How much can I save by lowering my student loan rate?
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What’s the best credit score for low student loan interest rates?
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Are variable student loan rates lower than fixed rates?
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What are common discounts that can lower my student loan interest rate?
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