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All federal student loans have fixed interest rates, but when you work with a private lender, you’ll usually have a choice of a fixed or variable student loan.

Here’s what to keep in mind about fixed vs. variable rates:

  • Variable interest rates: You can often get lower rates with a variable-rate loan. But you need to be prepared for your rate and monthly payment to change — it could go up or down.
  • Fixed interest rates: A fixed-rate loan gives you the certainty of a monthly payment that never changes. You’ll also know exactly what your total repayment costs will be if you make all of your monthly payments on time.

In this post:

Fixed vs. variable student loan interest rates

 Fixed-interest rate Variable-interest rate
Interest rateFixed for lifeMay go up or down
Monthly paymentDoesn't change
(except in IDR)
Can go up or down with rate
ProsSame rate and monthly payment for life of the loan
  • Lower rate at outset
  • May provide lower monthly payment and total cost
ConsHigher rate than a variable-rate loan with same repayment term
  • Unpredictable monthly payment and total repayment cost
  • Rate can rise dramatically

Learn More: APR vs. Interest Rate: What’s the Difference?

How fixed interest rates work

Consider a fixed interest rate loan if:

  • You’re unsure about your future earnings and want a set monthly budget
  • You’ll need many years to pay your loans off
  • Indexes and interest rates are on the rise

The interest rate on a fixed-rate loan from a private lender will typically be higher than what that lender would offer you on a variable-rate loan with the same repayment term.

When you take out a fixed-rate student loan from a private lender, you’ll be offered rates based on factors that include creditworthiness (yours or your cosigner’s) and the repayment term of the loan. The better your credit score and the shorter the loan term, the lower interest rate you’ll be offered.

Federal student loan rates are “one-size-fits all,” meaning everyone taking out the same type of loan in a given academic year gets the same rate. But there are three rate tiers — one for undergraduates, one for grad students, and one for parents and grad students taking out PLUS loans.

Even though rates on federal student loans are fixed, you’ll pay different rates on the loans you take out each year you’re in school. That’s because rates are adjusted once a year, to account for the government’s own of borrowing.

You can use a student loan repayment calculator to estimate what your repayment costs will be with a fixed-rate loan.

How variable interest rates work

Consider a variable interest rate loan if:

  • You’ll be able to handle your monthly payments even if they increase
  • You intend to pay your loans off quickly, reducing the impact of rate increases
  • You’re comfortable with uncertainty

Variable-rate student loans are usually tied to a published index like the prime rate or London Interbank Offered Rate (LIBOR), so it can go up or down as economic market conditions change. There’s often a limit on how much your rate can go up, but you might not hit your lender’s rate cap until your interest rate reaches 15% to 18%.

The ups and downs in the prime rate and 1-month LIBOR can affect the interest rate on variable loans.

Variable rate student loan indexes

Interest rate on variable-rate student loans are calculated by adding the lender’s margin to the index rate. The margin, which is calculated when you apply for a loan, will depend on your (or your cosigner’s) credit score, the loan repayment term, and the index used. The longer the repayment term and the riskier the loan, the higher the margin.

For a loan indexed to LIBOR, the lender’s margin might be 2% to 10%. Your margin stays fixed for the life of the loan. The prime rate and LIBOR change every day, but your loan’s interest rate will typically be adjusted monthly, quarterly or annually.

Find the best rate for you today

Although you should always exhaust your options for federal student loans first, sometimes you still need more money for college. The key to finding the best rate on a fixed or variable-rate private student loan is to get rates from multiple lenders.

You can check prequalified rates with the student loan companies in the table below through Credible — without affecting your credit score.

LenderFixed Rates From (APR)
Variable Rates From (APR)Get Rates Through Credible
ascent

View details
4.21%+3.16%+Get Rates
Ascent review

  • Loan terms: 5 or 10 years (Ascent Tuition loan, 15-year term also available with variable-rate loans); 10 years (Ascent Independent loan, 15-year term also available with variable-rate loans)
  • Loan amounts: $2,000 minimum, up to school's cost of attendance within $200,000 cap
  • Repayment plans: Defer payments or make interest-only or $25 minimum monthly payment while in school
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% automatic payment discount, 1% cash back graduation reward Cosigner release option: Cosigner release available after 24 months of consecutive monthly on-time payments
  • Eligibility: Ascent Tuition: Minimum FICO 600 (borrower with cosigner) and 660 (cosigner). Cosigner not required for Ascent Independent loan. No minimum income or credit score requirement for borrowers with less than two years of credit history. Borrowers with two years of credit history need 680 credit score and $24,000 annual income.
  • Loan servicer: University Account Service (UAS)
citizens

View details
4.40%+¹2.83%+¹Get Rates
Citizens Bank review

  • Loan terms: 5, 10, 15 years
  • Loan amounts: $1,000 minimum, school’s cost of attendance up to $150,000 for undergraduates and graduate degrees; $225,000 MBA and law; $350,000 medical school and parent loans)
  • Repayment plans: Pay immediately, pay interest only, or defer payments
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% loyalty discount available (if you have another qualifying account with Citizens Bank) as well as a 0.25% automatic payment discount
  • Cosigner release option: Cosigner release available after 36 months of consecutive monthly on-time payments
  • Eligibility: U.S. citizens or permanent residents; international students can apply with a creditworthy U.S. citizen or permanent resident cosigner
  • Loan servicer: Firstmark Services
collegeave

View details
4.54%+2
2.84%+2Get Rates
College Ave review

  • Loan terms: 5, 8, 10, 15 years
  • Loan amounts: Up to 100% of the school-certified cost of attendance ($1,000 minimum)
  • Repayment plans: Make full principal and interest, interest only, or flat payments while in school; or defer payments until six months after leaving school
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% rate deduction with autopay
  • Cosigner release option: Cosigner release available once more than half of the scheduled repayment period has elapsed.
  • Eligibility: Available to all U.S. residents attending an eligible undergraduate or graduate school
  • Loan servicer: University Accounting Service LLC
edvestinu

View details
4.52%+8
3.78%+8
Get Rates
EDvestinU review

  • Loan terms: 7, 10, 12, 15 and 20 years
  • Loan amounts: Minimum loan amount of $1,000 up to school-certified cost of attendance with $200,000 cap
  • Repayment plans: Full deferment, interest-only payments, and principal and interest payments
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.5% autopay discount
  • Cosigner release option: Cosigner release available after 24 months of on-time payments
  • Eligibility: Borrower or cosigner (if applicable) must have a minimum income of $30,000. Must be U.S. citizen or permanent resident, admitted to or enrolled at least half-time at any title IV degree-granting college and university when applying.
  • Loan servicer: Granite State Management & Resources (GSM&R)
invested

View details
4.09%+3.12%+Get Rates
INvested review

  • Loan terms: 5, 10, 15 years
  • Loan amounts: Up to 100% of school certified cost of attendance (minimum $1,001)
  • Repayment plans: Full principal and interest, interest only, and full deferment
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% autopay discount; 2% principal reduction upon graduation
  • Cosigner release option: Applications accepted after 48 consecutive monthly principal and interest payments
  • Eligibility: Indiana residents enrolled in college and U.S. residents attending an eligible Indiana school
  • Loan servicer: American Education Services
mefa

View details
3.95%+n/aGet Rates
INvested review

  • Loan terms: 10 or 15 years
  • Loan amounts: Minimum $1,500 (public school) or $2,000 (private school). Maximum up to school’s certified cost of attendance (minus other aid received)
  • Repayment plans: Immediate, interest-only, or deferred
  • Application fees: No application, origination, or disbursement fees
  • Discounts: None
  • Cosigner release option: Cosigner release available after 48 on-time payments and meeting credit requirements
  • Eligibility: U.S. citizen or permanent resident
  • Loan servicer: American Education Services (AES)


View details
4.74% - 11.85%9
2.87% - 10.75%9
Get Rates
Sallie Mae review

  • Loan terms: 5 to 15 years
  • Loan amounts: Up to 100% of the school-certified cost of attendance
  • Repayment plans: Make interest-only or fixed monthly amount while in school, or defer payments until six months after leaving school
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% autopay discount
  • Cosigner release option: Available after making 12 on-time principal and interest payments and meeting credit requirements
  • Eligibility: U.S. Citizen or U.S. Permanent Resident. Non-U.S. citizen students, including DACA students attending a school located in the U.S., are eligible to apply with a creditworthy cosigner who is a U.S. citizen or U.S. permanent resident.
  • Loan servicer: Sallie Mae


View details
3.82%7
2.64%7
Get Rates
SunTrust Bank review

  • Loan terms: 7, 10, or 15 years
  • Loan amounts: $1,001 - $65,000 (up to $95,000 for graduate students)
  • Repayment plans: Immediate or make partial, interest-only or deferred payments while in school.
  • Application fees: No application, origination, or disbursement fees
  • Discounts: 0.25% autopay discount; 0.25% loyalty discount; other special rewards may include principal reduction at graduation, rate reduction for on-time payments, or zero interest for six months
  • Cosigner release option: Cosigner release after 36 months of consecutive on-time payments
  • Eligibility: U.S. citizens or permanent resident, not available to permanent residents of Iowa or Wisconsin. Union Federal Private Student Loan available to international students with an eligible cosigner who is a U.S. citizen or permanent resident
  • Loan servicer: American Education Services (AES)
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Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Bank Disclosures | 2,3College Ave Disclosures | 6Discover Disclosures | 7SunTrust Bank Disclosures | 8EDvestinU Disclosures | 9Sallie Mae Disclosures


Citizens Bank Student 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 2.83%-11.16% (2.83%-11.01% APR) and will fluctuate over the term of the 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 4.40%-12.19% (4.40% - 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. 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 the loan.

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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