{"id":2212,"date":"2016-01-14T13:25:16","date_gmt":"2016-01-14T13:25:16","guid":{"rendered":"https:\/\/www.credible.com\/blog\/?p=2212"},"modified":"2023-10-18T11:27:45","modified_gmt":"2023-10-18T18:27:45","slug":"choosing-fixed-or-variable-rate-student-loan-2","status":"publish","type":"post","link":"https:\/\/www.credible.com\/blog\/student-loans\/choosing-fixed-or-variable-rate-student-loan\/","title":{"rendered":"Variable vs. Fixed Rate Student Loans: How to Choose"},"content":{"rendered":"<p>The interest rate on a loan is a percentage of the loan principal charged by the lender as part of your overall loan cost \u2014 essentially, it\u2019s a fee you pay to borrow money.<\/p>\n<p>When you take out a student loan, you might have a choice between:<\/p>\n<ul>\n<li><b>A fixed interest rate,<\/b> which will stay the same throughout the life of the loan<\/li>\n<li><b>A variable interest rate,<\/b> which can fluctuate depending on the market conditions<\/li>\n<\/ul>\n<p><b>Here\u2019s how to decide between a fixed or variable student loan interest rate:<\/b><\/p>\n<ul>\n<li><a href=\"#fixed-variable-interest-rates\">Fixed vs. variable student loan interest rates<\/a><\/li>\n<li><a href=\"#fixed-rate-benefits-drawbacks\">Fixed-rate student loan benefits and drawbacks<\/a><\/li>\n<li><a href=\"#variable-rate-benefits-drawbacks\">Variable-rate student loan benefits and drawbacks<\/a><\/li>\n<li><a href=\"#slr-fixed-vs-variable-rate\">Student loan refinancing: Better to get a fixed or variable rate?<\/a><\/li>\n<li><a href=\"#how-student-loan-interest-rates-work\">How do student loan interest rates work?<\/a><\/li>\n<li><a href=\"#how-to-get-lowest-student-loan-rate\">How to get the lowest student loan rate<\/a><\/li>\n<li><a href=\"#how-to-calculate-student-loan-interest\">How to calculate student loan interest<\/a><\/li>\n<li><a href=\"#how-rate-indexes-affect-student-loans\">How rate indexes affect student loans<\/a><\/li>\n<li><a href=\"#fixed-vs-variable-rate-example\">Example of a fixed vs. variable interest rate<\/a><\/li>\n<\/ul>\n<p><a name=\"fixed-variable-interest-rates\"><\/a><\/p>\n<h2>Fixed vs. variable student loan interest rates<\/h2>\n<p>If you\u2019re comparing a fixed versus variable interest rate on a <a href=\"https:\/\/www.credible.com\/student-loans\">student loan<\/a>, it\u2019s important to consider your overall repayment strategy to choose the most optimal rate for your needs. Here are a few important points about both rate types to keep in mind:<\/p>\n\n<table id=\"tablepress-193\" class=\"tablepress tablepress-id-193 table table-border-top table-rounded table-no-img-margin table-capitalized-column-titles\">\n<thead>\n<tr class=\"row-1\">\n\t<td class=\"column-1\"><\/td><th class=\"column-2\"><strong>Fixed interest rate<\/strong>\t<\/th><th class=\"column-3\"><strong>Variable interest rate<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\"><strong>Interest rate<\/strong><\/td><td class=\"column-2\">Fixed for life<\/td><td class=\"column-3\">May go up or down<\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td class=\"column-1\"><strong>Monthly payment<\/strong><\/td><td class=\"column-2\">Doesn't change<br \/>\n<small>(except in IDR)<\/small><\/td><td class=\"column-3\">Can go up or down with rate<\/td>\n<\/tr>\n<tr class=\"row-4\">\n\t<td class=\"column-1\"><strong>Loan type<\/strong><\/td><td class=\"column-2\">Federal or private student loans<\/td><td class=\"column-3\">Private student loans<\/td>\n<\/tr>\n<tr class=\"row-5\">\n\t<td class=\"column-1\"><strong>Pros<\/strong><\/td><td class=\"column-2\">Same rate and monthly payment for life of the loan<\/td><td class=\"column-3\"><div style=\"text-align: left; padding:0px 15px;\"><ul><li>May have lower initial rates<\/li><li>May provide lower monthly payment and total cost<\/li><\/ul><\/div><\/td>\n<\/tr>\n<tr class=\"row-6\">\n\t<td class=\"column-1\"><strong>Cons<\/strong><\/td><td class=\"column-2\">Higher rate than a variable-rate loan with same repayment term<\/td><td class=\"column-3\"><div style=\"text-align: left; padding:0px 15px;\"><ul><li>Unpredictable monthly payment and total repayment cost<\/li><li>Rate can rise dramatically<\/li><\/ul><\/div><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n<p>No matter if you choose a fixed- or variable-rate student loan, it\u2019s important to shop around and compare as many lenders as possible. This way, you can find the right loan for your needs.<\/p>\n<p>Credible makes this easy \u2014 you can compare your prequalified rates (both fixed and variable) from multiple lenders in two minutes.<\/p>\n<div class=\"basic-box\" style=\"border: 1px solid #E2E4E6;\"><div class=\"basic-box__inside\"><span style=\"font-size: x-large;\"><strong>Compare student loan rates from top lenders<\/strong><\/span><\/p>\n<ul class=\"list--iconArrow accent--isGreen\">\n<li>Multiple lenders compete to get you the best loan<\/li>\n<li>Get prequalified rates, not estimated ones<\/li>\n<li>Finance almost any degree<\/li>\n<\/ul>\n<p style=\"text-align: center;\"><a class=\"btn btn-warning\" href=\"https:\/\/www.credible.com\/student-loans\">See Your Rates<\/a><br \/>\n<small>Checking prequalified rates will not affect your credit score<\/small><\/p>\n<p><!-- TrustBox widget - Micro Combo --><\/p>\n<div class=\"trustpilot-widget\" data-locale=\"en-US\" data-template-id=\"5419b6ffb0d04a076446a9af\" data-businessunit-id=\"5536ec090000ff00057eebe7\" data-style-height=\"20px\" data-style-width=\"100%\" data-theme=\"light\"><a href=\"https:\/\/www.trustpilot.com\/review\/www.credible.com\" target=\"_blank\" rel=\"noopener noreferrer\">Trustpilot<\/a><!-- End TrustBox widget --><\/div>\n<\/div><\/div>\n<p><em><small>Requesting prequalified rates on Credible is free and doesn&#8217;t affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you.<\/small><\/em><\/p>\n<p><b><i>Learn More: <\/i><\/b><a href=\"https:\/\/www.credible.com\/blog\/student-loans\/how-student-loans-work\/\"><b><i>How Do Federal and Private Student Loans Work?<\/i><\/b><\/a><\/p>\n<h3>Interest rates for federal and private student loans<\/h3>\n<p>Here are the interest rates you can generally expect for federal and private student loans:<\/p>\n\n<table id=\"tablepress-804\" class=\"tablepress tablepress-id-804 table table-border-top table-rounded table-no-img-margin table-capitalized-column-titles\">\n<thead>\n<tr class=\"row-1\">\n\t<td class=\"column-1\"><\/td><th class=\"column-2\"><strong>Interest rates<\/strong><\/th><th class=\"column-3\"><strong>Rate type<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\"><strong>Federal Direct Subsidized Loans<\/strong><\/td><td class=\"column-2\"><span data-sheets-value=\"{&quot;1&quot;:3,&quot;3&quot;:0.055}\" data-sheets-userformat=\"{&quot;2&quot;:577,&quot;3&quot;:{&quot;1&quot;:3,&quot;2&quot;:&quot;0.00%&quot;,&quot;3&quot;:1},&quot;9&quot;:0,&quot;12&quot;:0}\">5.50%<\/span><\/td><td class=\"column-3\">Fixed only<\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td class=\"column-1\"><strong>Federal Direct Unsubsidized Loans<\/strong><\/td><td class=\"column-2\"><div style=\"text-align: left; padding:0px 25px;\"><ul><li><b>Undergrad:<\/b> <span data-sheets-value=\"{&quot;1&quot;:3,&quot;3&quot;:0.055}\" data-sheets-userformat=\"{&quot;2&quot;:577,&quot;3&quot;:{&quot;1&quot;:3,&quot;2&quot;:&quot;0.00%&quot;,&quot;3&quot;:1},&quot;9&quot;:0,&quot;12&quot;:0}\">5.50%<\/span><\/li><li><b>Graduate or professional:<\/b> <span data-sheets-value=\"{&quot;1&quot;:3,&quot;3&quot;:0.0705}\" data-sheets-userformat=\"{&quot;2&quot;:577,&quot;3&quot;:{&quot;1&quot;:3,&quot;2&quot;:&quot;0.00%&quot;,&quot;3&quot;:1},&quot;9&quot;:0,&quot;12&quot;:0}\">7.05%<\/span><\/li><\/ul><\/div><\/td><td class=\"column-3\">Fixed only<\/td>\n<\/tr>\n<tr class=\"row-4\">\n\t<td class=\"column-1\"><strong>Federal Direct PLUS Loans<\/strong><\/td><td class=\"column-2\"><span data-sheets-value=\"{&quot;1&quot;:3,&quot;3&quot;:0.0805}\" data-sheets-userformat=\"{&quot;2&quot;:577,&quot;3&quot;:{&quot;1&quot;:3,&quot;2&quot;:&quot;0.00%&quot;,&quot;3&quot;:1},&quot;9&quot;:0,&quot;12&quot;:0}\">8.05%<\/span><\/td><td class=\"column-3\">Fixed only<\/td>\n<\/tr>\n<tr class=\"row-5\">\n\t<td class=\"column-1\"><strong>Private student loans<\/strong><\/td><td class=\"column-2\"><ul><li><b>Fixed rates from (APR):<\/b>   <span>\n    2.65%+<sup><\/sup>\n  <\/span>\n<\/li><li><b>Variable rates from (APR):<\/b>   <span>\n    3.5%+<sup><\/sup>\n  <\/span>\n<\/li><\/ul><small>(with Credible partner lenders)<\/small><\/td><td class=\"column-3\">Fixed or variable<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n<p><b><i>Check Out: <\/i><\/b><a href=\"https:\/\/www.credible.com\/blog\/student-loans\/pay-for-college-no-money\/\"><b><i>How to Pay for College With No Money Saved<\/i><\/b><\/a><\/p>\n<p><a name=\"fixed-rate-benefits-drawbacks\"><\/a><\/p>\n<h2>Fixed-rate student loan benefits and drawbacks<\/h2>\n<p>Before you apply for a fixed-rate student loan, you\u2019ll want to consider the benefits and drawbacks.<\/p>\n<h3>Benefits of a fixed-rate student loan<\/h3>\n<p>In some cases, a fixed-rate student loan could be the right option for your finances. Here are a few reasons why you might choose a fixed interest rate:<\/p>\n<ul>\n<li><b>Predictable monthly payment: <\/b>With a fixed interest rate, your monthly payment will stay the same throughout the life of the loan.<\/li>\n<li><b>Fixed repayment cost:<\/b> Because a fixed interest rate won\u2019t ever change, you\u2019ll know exactly how much the loan will cost you.<\/li>\n<li><b>Could be less expensive for longer repayment periods:<\/b> If you expect to repay your loan over several years, a fixed interest rate may be less expensive than a variable interest rate that could fluctuate over time.<\/li>\n<\/ul>\n<p><b><i>Learn More: <\/i><\/b><a href=\"https:\/\/www.credible.com\/blog\/student-loans\/best-parent-plus-student-loans\/\"><b><i>Best Parent Student Loans: Choosing Private or PLUS Loans<\/i><\/b><\/a><\/p>\n<h3>Drawbacks of a fixed-rate student loan<\/h3>\n<p>While the predictability of fixed-rate student loans is appealing for many borrowers, there are also some potential drawbacks to keep in mind:<\/p>\n<ul>\n<li><b>Rate won\u2019t ever drop: <\/b>Unlike a variable rate that could shift over time, a fixed rate will stay the same throughout the life of the loan. This means a fixed interest rate won\u2019t drop if market rates decrease.<\/li>\n<li><b>Higher loan cost for shorter repayment terms: <\/b>If you plan to pay off your loan quickly, you could end up paying more on a fixed-rate loan compared to a variable-rate loan.<\/li>\n<\/ul>\n<p><b><i>Check Out: <\/i><\/b><a href=\"https:\/\/www.credible.com\/blog\/student-loans\/grad-plus-loans\/\"><b><i>Grad PLUS Loans: PLUS Loans for Graduate Students<\/i><\/b><\/a><\/p>\n<p><a name=\"variable-rate-benefits-drawbacks\"><\/a><\/p>\n<h2>Variable-rate student loan benefits and drawbacks<\/h2>\n<p>Variable-rate student loans also come with benefits and drawbacks to consider.<\/p>\n<h3>Benefits of a variable-rate student loan<\/h3>\n<p>A variable-rate student loan might be the best choice for your needs in some situations. Here are a few benefits of variable rates to consider:<\/p>\n<ul>\n<li><b>Lower initial payments:<\/b> Because variable rates are sometimes lower than fixed rates to start, your initial payments will start off lower in comparison. This might be appealing if you expect your income to rise over time.<\/li>\n<li><b>Potential for interest rate drops:<\/b> Depending on market conditions, a variable rate might drop in the future. This also means your monthly payments will be reduced.<\/li>\n<\/ul>\n<p><b><i>Learn More: <\/i><\/b><a href=\"https:\/\/www.credible.com\/blog\/student-loans\/independent-vs-dependent-status\/\"><b><i>Independent vs. Dependent Student: Which Are You?<\/i><\/b><\/a><\/p>\n<h3>Drawbacks of a variable-rate student loan<\/h3>\n<p>Although a variable rate might be appealing in some cases, here are a few drawbacks to think about:<\/p>\n<ul>\n<li><b>Interest rate could change:<\/b> A variable rate can rise or fall along with market conditions. This could make it difficult to estimate your overall repayment cost.<\/li>\n<li><b>Unpredictable payments:<\/b> Any changes in your variable rate will also mean shifts in your monthly payments.<\/li>\n<li><b>Potentially more expensive overall:<\/b> Depending on how quickly you pay off your student loan, you might find yourself paying much more over time with a variable rate compared to a fixed rate.<\/li>\n<\/ul>\n<div class=\"basic-box\" style=\"border: 1px solid #E2E4E6;\"><div class=\"basic-box__inside\"><b>Keep in mind:<\/b> Depending on the lender, a variable-rate student loan could come with an interest rate cap, which is the highest variable rate allowed by the lender. Your rate will never increase past this amount.<\/p>\n<p>This can help keep your interest costs lower as well as offer some peace of mind. However, you might still end up paying more in interest with a capped variable-rate loan than you would with a fixed-rate loan \u2014 especially if you can\u2019t pay off your loan before your rate has a chance to change.<\/div><\/div>\n<div id=\"loan-score-tool\">\n  Loading widget - loan-score-tool\n<\/div>\n\n<p><a name=\"slr-fixed-vs-variable-rate\"><\/a><\/p>\n<h2>Student loan refinancing: Better to get a fixed or variable rate?<\/h2>\n<p><a href=\"https:\/\/www.credible.com\/refinance-student-loans\">Student loan refinancing<\/a> is the process of paying off your old loans with a new private student loan, leaving you with just one loan and payment to manage.<\/p>\n<p>If you choose to refinance your student loans, you\u2019ll also typically have a choice between a fixed or variable rate \u2014 this means you can switch the kind of rate you currently have.<\/p>\n<div class=\"basic-box\" style=\"border: 1px solid #E2E4E6;\"><div class=\"basic-box__inside\"><b>Keep in mind:<\/b> Your financial needs as a graduate will likely have changed from when you were first attending school \u2014 so it\u2019s important to carefully reconsider which kind of rate will be best for your situation.<\/div><\/div>\n<h3>Pros and cons of a fixed-rate refinanced loan<\/h3>\n<p>While a fixed-rate refinanced loan could be a good choice for some borrowers, it isn\u2019t right for everyone. Here are some pros and cons to keep in mind as you consider your options:<\/p>\n\n<table id=\"tablepress-849\" class=\"tablepress tablepress-id-849 table table-border-top table-rounded table-no-img-margin table-capitalized-column-titles\">\n<thead>\n<tr class=\"row-1\">\n\t<th class=\"column-1\"><strong>Pros<\/strong><\/th><th class=\"column-2\"><strong>Cons<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\"><ul><li>Rate won't ever change<\/li><li>Predictable monthly payments<\/li><li>Could save you money on interest if you need a longer payment term<\/li><\/ul><\/td><td class=\"column-2\"><ul><li>Fixed rates can start off higher than variable rates<\/li><li>The only way to change your rate is to refinance again<\/li><li>Might cost you more in interest if you plan to pay off your loan quickly<\/li><\/ul><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n<h3>Pros and cons of a variable-rate refinanced loan<\/h3>\n<p>Like fixed-rate loans, variable-rate loans also come with their own pros and cons when it comes to refinancing, such as:<\/p>\n\n<table id=\"tablepress-850\" class=\"tablepress tablepress-id-850 table table-border-top table-rounded table-no-img-margin table-capitalized-column-titles\">\n<thead>\n<tr class=\"row-1\">\n\t<th class=\"column-1\"><strong>Pros<\/strong><\/th><th class=\"column-2\"><strong>Cons<\/strong><\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\"><ul><li>Variable rates can be lower to start than fixed rates<\/li><li>Your payments might start off lower<\/li><li>You could save money on interest if you plan to pay off your loan quickly<\/li><\/ul><\/td><td class=\"column-2\"><ul><li>Your rate might rise<\/li><li>Your payments could change, which might be hard to budget for<\/li><li>You might end up paying more in interest over time compared to a fixed-rate loan<\/li><\/ul><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n<p><b><i>Check Out: <\/i><\/b><a href=\"https:\/\/www.credible.com\/blog\/student-loans\/student-loans-living-expenses\/\"><b><i>How to Use Student Loans for College Living Expenses<\/i><\/b><\/a><\/p>\n<p><a name=\"how-student-loan-interest-rates-work\"><\/a><\/p>\n<h2>How do student loan interest rates work?<\/h2>\n<p>Your interest rate is the main factor that will determine how much you\u2019ll pay for a student loan over time. Here\u2019s how student loan interest rates work for federal and private student loans:<\/p>\n<h3>Federal student loan interest rates<\/h3>\n<p>All federal student loans have fixed rates that will stay the same throughout the life of the loan. Federal rates are set by Congress and are updated each year. The rate you get on a federal student loan will depend on the type of loan you choose as well as your year in school.<\/p>\n<div class=\"basic-box\" style=\"border: 1px solid #E2E4E6;\"><div class=\"basic-box__inside\"><b>Tip: <\/b>If you need to borrow money to <a href=\"https:\/\/www.credible.com\/blog\/student-loans\/pay-for-college\/\">pay for college<\/a>, it\u2019s usually a good idea to start with federal student loans. This is mainly because these loans come with federal benefits and protections \u2014 such as access to income-driven repayment plans and student loan forgiveness programs.<\/p>\n<p>Additionally, most federal <a href=\"https:\/\/www.credible.com\/blog\/student-loans\/student-loans-without-cosigner\/\">student loans don\u2019t require a cosigner<\/a> or a credit check.<\/div><\/div>\n<p>Here are the current rates you can expect, as well as how rates have changed over time:<\/p>\n<ul>\n<li><b>Direct Subsidized Loans:<\/b> <span data-sheets-value=\"{&quot;1&quot;:3,&quot;3&quot;:0.055}\" data-sheets-userformat=\"{&quot;2&quot;:577,&quot;3&quot;:{&quot;1&quot;:3,&quot;2&quot;:&quot;0.00%&quot;,&quot;3&quot;:1},&quot;9&quot;:0,&quot;12&quot;:0}\">5.50%<\/span><\/li>\n<li><b>Direct Unsubsidized Loans (for undergraduate students): <\/b><span data-sheets-value=\"{&quot;1&quot;:3,&quot;3&quot;:0.055}\" data-sheets-userformat=\"{&quot;2&quot;:577,&quot;3&quot;:{&quot;1&quot;:3,&quot;2&quot;:&quot;0.00%&quot;,&quot;3&quot;:1},&quot;9&quot;:0,&quot;12&quot;:0}\">5.50%<\/span><\/li>\n<li><b>Direct Unsubsidized Loans (for graduate and professional students): <\/b><span data-sheets-value=\"{&quot;1&quot;:3,&quot;3&quot;:0.0705}\" data-sheets-userformat=\"{&quot;2&quot;:577,&quot;3&quot;:{&quot;1&quot;:3,&quot;2&quot;:&quot;0.00%&quot;,&quot;3&quot;:1},&quot;9&quot;:0,&quot;12&quot;:0}\">7.05%<\/span><\/li>\n<li><b>Direct PLUS Loans (for graduate students and parents):<\/b> <span data-sheets-value=\"{&quot;1&quot;:3,&quot;3&quot;:0.0805}\" data-sheets-userformat=\"{&quot;2&quot;:577,&quot;3&quot;:{&quot;1&quot;:3,&quot;2&quot;:&quot;0.00%&quot;,&quot;3&quot;:1},&quot;9&quot;:0,&quot;12&quot;:0}\">8.05%<\/span><\/li>\n<\/ul>\n<p><script id=\"infogram_0_b87bba9e-d947-43fc-bd3e-26bcb13b6b19\" title=\"Federal student loan rates 2006-2020 (actual May 12, 2020 auction)\" src=\"https:\/\/e.infogram.com\/js\/dist\/embed.js?eeq\" type=\"text\/javascript\"><\/script><\/p>\n<p><b><i>Learn More: <\/i><\/b><a href=\"https:\/\/www.credible.com\/blog\/student-loans\/federal-vs-private-student-loans\/\"><b><i>Federal vs. Private Student Loans: 5 Differences<\/i><\/b><\/a><\/p>\n<h3>Private student loan interest rates<\/h3>\n<p>The interest rates on <a href=\"https:\/\/www.credible.com\/blog\/student-loans\/best-private-student-loans\/\">private student loans<\/a> are set by individual lenders based on market conditions. Many private lenders offer both fixed- and variable-rate student loans.<\/p>\n<div class=\"basic-box\" style=\"border: 1px solid #E2E4E6;\"><div class=\"basic-box__inside\"><b>Keep in mind: <\/b>The rates you\u2019re offered on private student loans will mainly depend on your credit. You typically need good to excellent credit to qualify for a private student loan and to get the most favorable rates. In general, the better your <a href=\"https:\/\/www.credible.com\/blog\/student-loans\/credit-score\/\">credit score<\/a>, the lower your rate will be.<\/p>\n<p>Some lenders offer <a href=\"https:\/\/www.credible.com\/blog\/student-loans\/bad-credit\/\">private student loans for bad credit<\/a>. But these loans usually come with higher interest rates compared to good credit loans.<\/div><\/div>\n<p>Here are the rates you can expect on the private student loans offered by Credible\u2019s partner lenders, as well as how variable rates have shifted on private loans over time:<\/p>\n<ul>\n<li><b>Fixed rates from (APR):<\/b>   <span>\n    2.65%+<sup><\/sup>\n  <\/span>\n<\/li>\n<li><b>Variable rates from (APR):<\/b>   <span>\n    3.5%+<sup><\/sup>\n  <\/span>\n<\/li>\n<\/ul>\n<p><script id=\"infogram_0_fe6a073f-c19c-4061-88ea-f676610364b8\" title=\"Copy: Prime rate, LIBOR and variable-rate student loans\" src=\"https:\/\/e.infogram.com\/js\/dist\/embed.js?cl5\" type=\"text\/javascript\"><\/script><\/p>\n<p><b><i>Check Out: <\/i><\/b><a href=\"https:\/\/www.credible.com\/blog\/student-loans\/private-student-loans-covid\/\"><b><i>Private Student Loans &amp; COVID-19: What You Need to Know<\/i><\/b><\/a><\/p>\n<p><a name=\"how-to-get-lowest-student-loan-rate\"><\/a><\/p>\n<h2>How to get the lowest student loan rate<\/h2>\n<p>Here are a few strategies that could help you get a good interest rate on a private student loan:<\/p>\n<ul>\n<li><b>Have good credit.<\/b> Your credit score is one of the main factors that will determine the rates you\u2019re offered. You\u2019ll generally need good to excellent credit to qualify for the lowest interest rates \u2014 a good credit score is usually considered to be 700 or higher.<\/li>\n<li><b>Apply with a cosigner. <\/b>If you have less-than-perfect credit, applying with a <a href=\"https:\/\/www.credible.com\/blog\/student-loans\/cosigner-explained\/\">cosigner<\/a> could make it easier to get approved for a private student loan. Having a cosigner with good credit might also get you a lower interest rate than you\u2019d get on your own.<\/li>\n<li><b>Choose a shorter repayment term. <\/b>Many lenders offer lower rates for shorter repayment terms. It\u2019s usually a good idea to pick the shortest term you can afford to keep your interest costs as low as possible.<\/li>\n<li><b>Compare lender options.<\/b> It\u2019s important to research and compare your options from as many lenders as possible. This way, you can find the right loan with the most favorable rate for your needs.<\/li>\n<\/ul>\n<p>If you\u2019re ready to start shopping for a private student loan, Credible can help. You can compare your prequalified rates from our partner lenders in the table below in two minutes.<\/p>\n\n<table id=\"tablepress-742\" class=\"tablepress tablepress-id-742 table table-border-top table-rounded table-no-img-margin table-capitalized-column-titles table-align-center tbody-has-connected-cells\">\n<thead>\n<tr class=\"row-1\">\n\t<th class=\"column-1\">Lender<\/th><th class=\"column-2\">Fixed Rates From (APR)<br \/>\n<\/th><th class=\"column-3\">Variable Rates From (APR)<\/th><th class=\"column-4\">Loan amounts<\/th><th class=\"column-5\">Loan terms (years)<\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\"><center><br \/>\n<br \/>\n        <div class=\"tablepress-rating-shortcode\">\n            <div class=\"heading__container\">\n                <span class=\"heading\">\n                                            <a href=\"https:\/\/www.credible.com\/lenders\/ascent\/\">Credible Rating<\/a>\n                                    <\/span>\n                                    <div class=\"even\" data-toggle=\"tip\" data-placement=\"top left\">\n                        <img decoding=\"async\" class=\"icon-help\" alt=\"Question mark icon to show more information\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/icon-help-dark.svg\">\n                        <span class=\"tip\">\n                            <span class=\"tip-content\">Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. <a href=\"https:\/\/www.credible.com\/blog\/credible-rating-lender-methodology\/\">Read our full methodology.<\/a><\/span>\n                            <span class=\"tip-arrow\"><\/span>\n                        <\/span>\n                    <\/div>\n                            <\/div>\n            <div class=\"star-rating__container\" role=\"img\" aria-label=\"4 star rating\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A three-quarter star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-three-quarter.svg\">\n                    <\/div>\n            <div class=\"details-link\">\n                <a href=\"#\" class=\"collapsed\" data-target=\"#ascent-psl\" data-toggle=\"collapse\" role=\"button\">View details<\/a>\n            <\/div>\n        <\/div>\n        <\/td><td class=\"column-2\">  <span>\n    2.69%+<sup>10<\/sup>\n  <\/span>\n<\/td><td class=\"column-3\">  <span>\n    3.68%+<sup>10<\/sup>\n  <\/span>\n<\/td><td class=\"column-4\">$2,001* to $400,000<\/td><td class=\"column-5\">5, 7, 10, 12, 15, 20<\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td colspan=\"5\" class=\"column-1\">            <div id=\"ascent-psl\" class=\"collapse tablepress-lender-details__container\">\n                <ul>\n                                                <li><span class=\"font-weight-bold\">Fixed APR:<\/span>\n                                  <span>\n    2.69%+<sup>10<\/sup>\n  <\/span>\n<\/li>\n                                                <li><span class=\"font-weight-bold\">Variable APR:<\/span>\n                                  <span>\n    3.68%+<sup>10<\/sup>\n  <\/span>\n<\/li>\n                                                <li><span class=\"font-weight-bold\">Min. credit score:<\/span>\n                                Does not disclose<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan amount:<\/span>\n                                $2,001* to $400,000 <\/li>\n                                                <li><span class=\"font-weight-bold\">Loan terms (years):<\/span>\n                                5, 7, 10, 12, 15, 20<\/li>\n                                                <li><span class=\"font-weight-bold\">Repayment options:<\/span>\n                                Full deferral, fixed\/flat repayment, interest only, academic deferment, military deferment, forbearance, loans discharged upon death or disability<\/li>\n                                                <li><span class=\"font-weight-bold\">Fees:<\/span>\n                                None<\/li>\n                                                <li><span class=\"font-weight-bold\">Discounts:<\/span>\n                                0.25% to 1.00% automatic payment discount, 1% cash back graduation reward<\/li>\n                                                <li><span class=\"font-weight-bold\">Eligibility:<\/span>\n                                Must be a U.S. citizen or permanent resident or DACA student enrolled at least half-time in a degree-seeking program<\/li>\n                                                <li><span class=\"font-weight-bold\">Customer service:<\/span>\n                                Email, phone<\/li>\n                                                <li><span class=\"font-weight-bold\">Prequalified rates with a soft credit check:<\/span>\n                                Yes<\/li>\n                                                <li><span class=\"font-weight-bold\">Cosigner release:<\/span>\n                                After 12 on-time principal and interest payments<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan servicer:<\/span>\n                                Launch Servicing, LLC<\/li>\n                                    <\/ul>\n                            <\/div>\n        <\/td>\n<\/tr>\n<tr class=\"row-4\">\n\t<td class=\"column-1\"><center><br \/>\n<br \/>\n        <div class=\"tablepress-rating-shortcode\">\n            <div class=\"heading__container\">\n                <span class=\"heading\">\n                                            <a href=\"https:\/\/www.credible.com\/lenders\/citizens-bank\/#citizens-bank-private-student-loans\">Credible Rating<\/a>\n                                    <\/span>\n                                    <div class=\"even\" data-toggle=\"tip\" data-placement=\"top left\">\n                        <img decoding=\"async\" class=\"icon-help\" alt=\"Question mark icon to show more information\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/icon-help-dark.svg\">\n                        <span class=\"tip\">\n                            <span class=\"tip-content\">Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. <a href=\"https:\/\/www.credible.com\/blog\/credible-rating-lender-methodology\/\">Read our full methodology.<\/a><\/span>\n                            <span class=\"tip-arrow\"><\/span>\n                        <\/span>\n                    <\/div>\n                            <\/div>\n            <div class=\"star-rating__container\" role=\"img\" aria-label=\"4 star rating\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A three-quarter star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-three-quarter.svg\">\n                    <\/div>\n            <div class=\"details-link\">\n                <a href=\"#\" class=\"collapsed\" data-target=\"#citizens-bank-psl\" data-toggle=\"collapse\" role=\"button\">View details<\/a>\n            <\/div>\n        <\/div>\n        <\/td><td class=\"column-2\">  <span>\n    3.24%+<sup>1<\/sup>\n  <\/span>\n<\/td><td class=\"column-3\">  <span>\n    4.99%+<sup><\/sup>\n  <\/span>\n<\/td><td class=\"column-4\">$1,000 to $350,000 <small>(depending on degree)<\/small><\/td><td class=\"column-5\">5, 10, 15<\/td>\n<\/tr>\n<tr class=\"row-5\">\n\t<td colspan=\"5\" class=\"column-1\">            <div id=\"citizens-bank-psl\" class=\"collapse tablepress-lender-details__container\">\n                <ul>\n                                                <li><span class=\"font-weight-bold\">Fixed APR:<\/span>\n                                  <span>\n    3.24%+<sup>1<\/sup>\n  <\/span>\n<\/li>\n                                                <li><span class=\"font-weight-bold\">Variable APR:<\/span>\n                                  <span>\n    4.99%+<sup><\/sup>\n  <\/span>\n<\/li>\n                                                <li><span class=\"font-weight-bold\">Min. credit score:<\/span>\n                                720<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan amount:<\/span>\n                                $1,000 to $350,000<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan terms (years):<\/span>\n                                5, 10, 15<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan types:<\/span>\n                                Any private or federal student loan<\/li>\n                                                <li><span class=\"font-weight-bold\">Repayment options:<\/span>\n                                Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability<\/li>\n                                                <li><span class=\"font-weight-bold\">Fees:<\/span>\n                                Late fee<\/li>\n                                                <li><span class=\"font-weight-bold\">Discounts:<\/span>\n                                Autopay, loyalty<\/li>\n                                                <li><span class=\"font-weight-bold\">Eligibility:<\/span>\n                                Available in all 50 states (international students can apply with a creditworthy U.S. citizen or permanent resident cosigner)<\/li>\n                                                <li><span class=\"font-weight-bold\">Customer service:<\/span>\n                                Email, phone, chat<\/li>\n                                                <li><span class=\"font-weight-bold\">Soft credit check:<\/span>\n                                Yes<\/li>\n                                                <li><span class=\"font-weight-bold\">Cosigner release:<\/span>\n                                After 36 months<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan servicer:<\/span>\n                                Firstmark Services<\/li>\n                                    <\/ul>\n                            <\/div>\n        <\/td>\n<\/tr>\n<tr class=\"row-6\">\n\t<td class=\"column-1\"><center><br \/>\n<br \/>\n        <div class=\"tablepress-rating-shortcode\">\n            <div class=\"heading__container\">\n                <span class=\"heading\">\n                                            <a href=\"https:\/\/www.credible.com\/lenders\/college-ave\/#college-ave-private-student-loans\">Credible Rating<\/a>\n                                    <\/span>\n                                    <div class=\"even\" data-toggle=\"tip\" data-placement=\"top left\">\n                        <img decoding=\"async\" class=\"icon-help\" alt=\"Question mark icon to show more information\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/icon-help-dark.svg\">\n                        <span class=\"tip\">\n                            <span class=\"tip-content\">Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. <a href=\"https:\/\/www.credible.com\/blog\/credible-rating-lender-methodology\/\">Read our full methodology.<\/a><\/span>\n                            <span class=\"tip-arrow\"><\/span>\n                        <\/span>\n                    <\/div>\n                            <\/div>\n            <div class=\"star-rating__container\" role=\"img\" aria-label=\"4 star rating\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A three-quarter star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-three-quarter.svg\">\n                    <\/div>\n            <div class=\"details-link\">\n                <a href=\"#\" class=\"collapsed\" data-target=\"#college-ave-psl\" data-toggle=\"collapse\" role=\"button\">View details<\/a>\n            <\/div>\n        <\/div>\n        <\/td><td class=\"column-2\">  <span>\n    2.84%+<sup>2,3<\/sup>\n  <\/span>\n<br \/>\n<\/td><td class=\"column-3\">  <span>\n    3.89%+<sup>2,3<\/sup>\n  <\/span>\n<\/td><td class=\"column-4\">$1,000 up to 100% of the school-certified cost of attendance<\/td><td class=\"column-5\">5, 8, 10, 15, 20<\/td>\n<\/tr>\n<tr class=\"row-7\">\n\t<td colspan=\"5\" class=\"column-1\">            <div id=\"college-ave-psl\" class=\"collapse tablepress-lender-details__container\">\n                <ul>\n                                                <li><span class=\"font-weight-bold\">Fixed APR:<\/span>\n                                  <span>\n    2.84%+<sup>2,3<\/sup>\n  <\/span>\n<\/li>\n                                                <li><span class=\"font-weight-bold\">Variable APR:<\/span>\n                                  <span>\n    3.89%+<sup>2,3<\/sup>\n  <\/span>\n<\/li>\n                                                <li><span class=\"font-weight-bold\">Min. credit score:<\/span>\n                                Does not disclose<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan amount:<\/span>\n                                $1,000 up to cost of attendance<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan terms (years):<\/span>\n                                5, 8, 10, 15, 20<\/li>\n                                                <li><span class=\"font-weight-bold\">Repayment options:<\/span>\n                                Full deferral, full monthly payment, fixed\/flat repayment, interest only, immediate repayment, academic deferment, forbearance, loans discharged upon death or disability<\/li>\n                                                <li><span class=\"font-weight-bold\">Fees:<\/span>\n                                Late fee<\/li>\n                                                <li><span class=\"font-weight-bold\">Discounts:<\/span>\n                                Autopay<\/li>\n                                                <li><span class=\"font-weight-bold\">Eligibility:<\/span>\n                                Must be a U.S. citizen or permanent resident and be making satisfactory academic progress.<\/li>\n                                                <li><span class=\"font-weight-bold\">Customer service:<\/span>\n                                Email, phone<\/li>\n                                                <li><span class=\"font-weight-bold\">Prequalified rates with a soft credit check:<\/span>\n                                Yes<\/li>\n                                                <li><span class=\"font-weight-bold\">Cosigner release:<\/span>\n                                After half of the scheduled repayment term has been completed<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan servicer:<\/span>\n                                College Ave Servicing LLC\r\n<p><i><sup>Learn more about<a href=\"https:\/\/help.collegeavestudentloans.com\/hc\/en-us\/articles\/5560603133079-Can-a-cosigner-be-released-from-a-loan-\"> cosigner release requirements.<\/a> Requesting prequalified rates on Credible is free and doesn't affect your credit score. However, applying for or closing a loan will involve a hard credit pull that impacts your credit score and closing a loan will result in costs to you.<\/p><\/i><\/sup><\/li>\n                                    <\/ul>\n                            <\/div>\n        <\/td>\n<\/tr>\n<tr class=\"row-8\">\n\t<td class=\"column-1\"><center><br \/>\n<br \/>\n        <div class=\"tablepress-rating-shortcode\">\n            <div class=\"heading__container\">\n                <span class=\"heading\">\n                                            <a href=\"https:\/\/www.credible.com\/lenders\/custom-choice\/\">Credible Rating<\/a>\n                                    <\/span>\n                                    <div class=\"even\" data-toggle=\"tip\" data-placement=\"top left\">\n                        <img decoding=\"async\" class=\"icon-help\" alt=\"Question mark icon to show more information\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/icon-help-dark.svg\">\n                        <span class=\"tip\">\n                            <span class=\"tip-content\">Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. <a href=\"https:\/\/www.credible.com\/blog\/credible-rating-lender-methodology\/\">Read our full methodology.<\/a><\/span>\n                            <span class=\"tip-arrow\"><\/span>\n                        <\/span>\n                    <\/div>\n                            <\/div>\n            <div class=\"star-rating__container\" role=\"img\" aria-label=\"4 star rating\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A half star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-half.svg\">\n                    <\/div>\n            <div class=\"details-link\">\n                <a href=\"#\" class=\"collapsed\" data-target=\"#custom-choice-psl\" data-toggle=\"collapse\" role=\"button\">View details<\/a>\n            <\/div>\n        <\/div>\n        <\/td><td class=\"column-2\">  <span>\n    3.35%+<sup><\/sup>\n  <\/span>\n<\/td><td class=\"column-3\">  <span>\n    3.5%+<sup><\/sup>\n  <\/span>\n<\/td><td class=\"column-4\">$1,000 to $99,999 annually <br \/>\n<small>($180,000 aggregate limit)<\/small><\/td><td class=\"column-5\">7, 10, 15<\/td>\n<\/tr>\n<tr class=\"row-9\">\n\t<td colspan=\"5\" class=\"column-1\">            <div id=\"custom-choice-psl\" class=\"collapse tablepress-lender-details__container\">\n                <ul>\n                                                <li><span class=\"font-weight-bold\">Fixed APR:<\/span>\n                                  <span>\n    3.35%+<sup><\/sup>\n  <\/span>\n<a href=\"https:\/\/www.credible.com\/a\/cogfin-disclosures\"><sup>11<\/sup><\/a><\/li>\n                                                <li><span class=\"font-weight-bold\">Variable APR:<\/span>\n                                  <span>\n    3.5%+<sup><\/sup>\n  <\/span>\n<a href=\"https:\/\/www.credible.com\/a\/cogfin-disclosures\"><sup>11<\/sup><\/a><\/li>\n                                                <li><span class=\"font-weight-bold\">Loan amount:<\/span>\n                                $1,000 to $99,999 annually\r\n<small>($180,000 aggregate limit)<a href=\"https:\/\/www.credible.com\/a\/cogfin-disclosures\"><sup>11<\/sup><\/a><\/small><\/li>\n                                                <li><span class=\"font-weight-bold\">Loan terms (years):<\/span>\n                                7, 10, 15<a href=\"https:\/\/www.credible.com\/a\/cogfin-disclosures\"><sup>11<\/sup><\/a><\/li>\n                                                <li><span class=\"font-weight-bold\">Repayment options:<\/span>\n                                Full deferral, immediate repayment, interest-only repayment, flat\/full repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability<\/li>\n                                                <li><span class=\"font-weight-bold\">Fees:<\/span>\n                                None<\/li>\n                                                <li><span class=\"font-weight-bold\">Discounts:<\/span>\n                                Autopay<a href=\"https:\/\/www.credible.com\/a\/cogfin-disclosures\"><sup>11<\/sup><\/a><\/li>\n                                                <li><span class=\"font-weight-bold\">Eligibility:<\/span>\n                                Available to borrowers in all 50 states. Must be a U.S. citizen or permanent resident.<\/li>\n                                                <li><span class=\"font-weight-bold\">Customer service:<\/span>\n                                Phone, email<\/li>\n                                                <li><span class=\"font-weight-bold\">Prequalified rates with a soft credit check:<\/span>\n                                Yes<\/li>\n                                                <li><span class=\"font-weight-bold\">Cosigner release:<\/span>\n                                After 36 months<a href=\"https:\/\/www.credible.com\/a\/cogfin-disclosures\"><sup>11<\/sup><\/a><\/li>\n                                                <li><span class=\"font-weight-bold\">Loan servicer:<\/span>\n                                American Education Services<\/li>\n                                                <li><span class=\"font-weight-bold\">Min. income:<\/span>\n                                $1<\/li>\n                                    <\/ul>\n                            <\/div>\n        <\/td>\n<\/tr>\n<tr class=\"row-10\">\n\t<td class=\"column-1\"><center><br \/>\n<br \/>\n        <div class=\"tablepress-rating-shortcode\">\n            <div class=\"heading__container\">\n                <span class=\"heading\">\n                                            <a href=\"https:\/\/www.credible.com\/lenders\/invested\/#invested-private-student-loans\">Credible Rating<\/a>\n                                    <\/span>\n                                    <div class=\"even\" data-toggle=\"tip\" data-placement=\"top left\">\n                        <img decoding=\"async\" class=\"icon-help\" alt=\"Question mark icon to show more information\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/icon-help-dark.svg\">\n                        <span class=\"tip\">\n                            <span class=\"tip-content\">Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. <a href=\"https:\/\/www.credible.com\/blog\/credible-rating-lender-methodology\/\">Read our full methodology.<\/a><\/span>\n                            <span class=\"tip-arrow\"><\/span>\n                        <\/span>\n                    <\/div>\n                            <\/div>\n            <div class=\"star-rating__container\" role=\"img\" aria-label=\"4 star rating\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A half star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-half.svg\">\n                    <\/div>\n            <div class=\"details-link\">\n                <a href=\"#\" class=\"collapsed\" data-target=\"#invested-psl\" data-toggle=\"collapse\" role=\"button\">View details<\/a>\n            <\/div>\n        <\/div>\n        <\/td><td class=\"column-2\">  <span>\n    4.5%+<sup>8<\/sup>\n  <\/span>\n<\/td><td class=\"column-3\">  <span>\n    6.47%+<sup>8<\/sup>\n  <\/span>\n<\/td><td class=\"column-4\">$1,001 up to 100% of school certified cost of attendance<\/td><td class=\"column-5\">5, 10, 15<\/td>\n<\/tr>\n<tr class=\"row-11\">\n\t<td colspan=\"5\" class=\"column-1\">            <div id=\"invested-psl\" class=\"collapse tablepress-lender-details__container\">\n                <ul>\n                                                <li><span class=\"font-weight-bold\">Fixed APR:<\/span>\n                                  <span>\n    4.5%+<sup>8<\/sup>\n  <\/span>\n<\/li>\n                                                <li><span class=\"font-weight-bold\">Variable APR:<\/span>\n                                  <span>\n    6.47%+<sup>8<\/sup>\n  <\/span>\n<\/li>\n                                                <li><span class=\"font-weight-bold\">Min. credit score:<\/span>\n                                670<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan amount:<\/span>\n                                $1,001 up to cost of attendance<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan terms (years):<\/span>\n                                5, 10, 15<\/li>\n                                                <li><span class=\"font-weight-bold\">Repayment options:<\/span>\n                                Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, forbearance<\/li>\n                                                <li><span class=\"font-weight-bold\">Fees:<\/span>\n                                Late fee<\/li>\n                                                <li><span class=\"font-weight-bold\">Discounts:<\/span>\n                                Autopay, reward for on-time graduation<\/li>\n                                                <li><span class=\"font-weight-bold\">Eligibility:<\/span>\n                                Must be an Indiana resident or a U.S. citizen attending an eligible Indiana school<\/li>\n                                                <li><span class=\"font-weight-bold\">Customer service:<\/span>\n                                Email, phone, chat<\/li>\n                                                <li><span class=\"font-weight-bold\">Prequalified rates with a soft credit check:<\/span>\n                                Yes<\/li>\n                                                <li><span class=\"font-weight-bold\">Cosigner release:<\/span>\n                                After 12 months<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan servicer:<\/span>\n                                American Education Services<\/li>\n                                    <\/ul>\n                            <\/div>\n        <\/td>\n<\/tr>\n<tr class=\"row-12\">\n\t<td class=\"column-1\"><center><br \/>\n<br \/>\n        <div class=\"tablepress-rating-shortcode\">\n            <div class=\"heading__container\">\n                <span class=\"heading\">\n                                            <a href=\"https:\/\/www.credible.com\/lenders\/mefa\/#mefa-private-student-loans\">Credible Rating<\/a>\n                                    <\/span>\n                                    <div class=\"even\" data-toggle=\"tip\" data-placement=\"top left\">\n                        <img decoding=\"async\" class=\"icon-help\" alt=\"Question mark icon to show more information\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/icon-help-dark.svg\">\n                        <span class=\"tip\">\n                            <span class=\"tip-content\">Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. <a href=\"https:\/\/www.credible.com\/blog\/credible-rating-lender-methodology\/\">Read our full methodology.<\/a><\/span>\n                            <span class=\"tip-arrow\"><\/span>\n                        <\/span>\n                    <\/div>\n                            <\/div>\n            <div class=\"star-rating__container\" role=\"img\" aria-label=\"4 star rating\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A half star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-half.svg\">\n                    <\/div>\n            <div class=\"details-link\">\n                <a href=\"#\" class=\"collapsed\" data-target=\"#mefa-psl\" data-toggle=\"collapse\" role=\"button\">View details<\/a>\n            <\/div>\n        <\/div>\n        <\/td><td class=\"column-2\">  <span>\n    3.29%+<sup><\/sup>\n  <\/span>\n<\/td><td class=\"column-3\">N\/A<\/td><td class=\"column-4\">$1,500 up to school\u2019s certified cost of attendance less aid<\/td><td class=\"column-5\">10, 15<\/td>\n<\/tr>\n<tr class=\"row-13\">\n\t<td colspan=\"5\" class=\"column-1\">            <div id=\"mefa-psl\" class=\"collapse tablepress-lender-details__container\">\n                <ul>\n                                                <li><span class=\"font-weight-bold\">Fixed APR:<\/span>\n                                  <span>\n    3.29%+<sup><\/sup>\n  <\/span>\n<\/li>\n                                                <li><span class=\"font-weight-bold\">Variable APR:<\/span>\n                                N\/A<\/li>\n                                                <li><span class=\"font-weight-bold\">Min. credit score:<\/span>\n                                670<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan amount:<\/span>\n                                $1,500 up to cost of attendance less aid<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan terms (years):<\/span>\n                                10, 15<\/li>\n                                                <li><span class=\"font-weight-bold\">Repayment options:<\/span>\n                                Full deferral, interest only, immediate repayment, academic deferral, forbearance<\/li>\n                                                <li><span class=\"font-weight-bold\">Fees:<\/span>\n                                None<\/li>\n                                                <li><span class=\"font-weight-bold\">Discounts:<\/span>\n                                None<\/li>\n                                                <li><span class=\"font-weight-bold\">Eligibility:<\/span>\n                                Must be a U.S. citizen or permanent resident and be making satisfactory academic progress.<\/li>\n                                                <li><span class=\"font-weight-bold\">Customer service:<\/span>\n                                Email, phone<\/li>\n                                                <li><span class=\"font-weight-bold\">Prequalified rates with a soft credit check:<\/span>\n                                Yes<\/li>\n                                                <li><span class=\"font-weight-bold\">Cosigner release:<\/span>\n                                After 48 months<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan servicer:<\/span>\n                                American Education Services (AES)<\/li>\n                                    <\/ul>\n                            <\/div>\n        <\/td>\n<\/tr>\n<tr class=\"row-14\">\n\t<td class=\"column-1\"><center><br \/>\n<br \/>\n        <div class=\"tablepress-rating-shortcode\">\n            <div class=\"heading__container\">\n                <span class=\"heading\">\n                                            <a href=\"https:\/\/www.credible.com\/lenders\/sallie-mae\/\">Credible Rating<\/a>\n                                    <\/span>\n                                    <div class=\"even\" data-toggle=\"tip\" data-placement=\"top left\">\n                        <img decoding=\"async\" class=\"icon-help\" alt=\"Question mark icon to show more information\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/icon-help-dark.svg\">\n                        <span class=\"tip\">\n                            <span class=\"tip-content\">Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. <a href=\"https:\/\/www.credible.com\/blog\/credible-rating-lender-methodology\/\">Read our full methodology.<\/a><\/span>\n                            <span class=\"tip-arrow\"><\/span>\n                        <\/span>\n                    <\/div>\n                            <\/div>\n            <div class=\"star-rating__container\" role=\"img\" aria-label=\"4 star rating\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                    <img decoding=\"async\" class=\"star-light\" alt=\"A full star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-full.svg\">\n                            <img decoding=\"async\" class=\"star-light\" alt=\"A one-quarter star\" src=\"https:\/\/www.credible.com\/blog\/wp-content\/themes\/credible\/assets\/images\/lender-rating\/star-light-quarter.svg\">\n                        <\/div>\n            <div class=\"details-link\">\n                <a href=\"#\" class=\"collapsed\" data-target=\"#sallie-mae-psl\" data-toggle=\"collapse\" role=\"button\">View details<\/a>\n            <\/div>\n        <\/div>\n        <\/td><td class=\"column-2\"><span style=\"font-weight: 400;\">  <span>\n    2.890%<sup>9<\/sup>\n  <\/span>\n -   <span>\n    17.49%<sup>9<\/sup>\n  <\/span>\n<\/span><\/td><td class=\"column-3\"><span style=\"font-weight: 400;\">  <span>\n    3.75%<sup>9<\/sup>\n  <\/span>\n -   <span>\n    16.370%<sup>9<\/sup>\n  <\/span>\n<\/span><\/td><td class=\"column-4\">$1,000 up to 100% of school-certified cost of attendance<\/td><td class=\"column-5\">10 to 20<\/td>\n<\/tr>\n<tr class=\"row-15\">\n\t<td colspan=\"5\" class=\"column-1\">            <div id=\"sallie-mae-psl\" class=\"collapse tablepress-lender-details__container\">\n                <ul>\n                                                <li><span class=\"font-weight-bold\">Fixed APR:<\/span>\n                                <span style=\"font-weight: 400;\">  <span>\n    2.890%<sup>9<\/sup>\n  <\/span>\n -   <span>\n    17.49%<sup>9<\/sup>\n  <\/span>\n<\/span><\/li>\n                                                <li><span class=\"font-weight-bold\">Variable APR:<\/span>\n                                <span style=\"font-weight: 400;\">  <span>\n    3.75%<sup>9<\/sup>\n  <\/span>\n -   <span>\n    16.370%<sup>9<\/sup>\n  <\/span>\n<\/span><\/li>\n                                                <li><span class=\"font-weight-bold\">Min. credit score:<\/span>\n                                Does not disclose<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan amount:<\/span>\n                                $1,000 up to 100% of school-certified cost of attendance<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan terms (years):<\/span>\n                                10 to 20<sup>9<\/sup><\/li>\n                                                <li><span class=\"font-weight-bold\">Repayment options:<\/span>\n                                Full deferral, fixed\/flat repayment, interest only, academic deferment, forbearance, loans discharged upon death or disability<\/li>\n                                                <li><span class=\"font-weight-bold\">Fees:<\/span>\n                                Late fee, non-sufficient funds (NSF) fee<\/li>\n                                                <li><span class=\"font-weight-bold\">Discounts:<\/span>\n                                Autopay<\/li>\n                                                <li><span class=\"font-weight-bold\">Eligibility:<\/span>\n                                Must be a U.S. citizen or permanent resident. Also available to non-U.S. citizen students (including DACA students) attending a school located in the U.S. who apply with a qualifying cosigner.<\/li>\n                                                <li><span class=\"font-weight-bold\">Customer service:<\/span>\n                                Phone, chat<\/li>\n                                                <li><span class=\"font-weight-bold\">Prequalified rates with a soft credit check:<\/span>\n                                Yes<\/li>\n                                                <li><span class=\"font-weight-bold\">Cosigner release:<\/span>\n                                Borrowers can apply after graduation, 12 consecutive on-time principal and interest payments, and meeting certain credit requirements.<\/li>\n                                                <li><span class=\"font-weight-bold\">Loan servicer:<\/span>\n                                Sallie Mae<\/li>\n                                    <\/ul>\n                            <\/div>\n        <\/td>\n<\/tr>\n<tr class=\"row-16\">\n\t<td colspan=\"5\" class=\"column-1\"><center><b>Compare private student loan rates without affecting<br> your credit score. 100% free!<\/b><br><br \/>\n<center><a class=\"btn btn-warning\" href=\"https:\/\/www.credible.com\/student-loans\/start\">Compare Private Loans Now<\/a><\/center><br><\/center><br \/>\n<!-- TrustBox widget - Micro Combo --><br \/>\n<div class=\"trustpilot-widget\" data-locale=\"en-US\" data-template-id=\"5419b6ffb0d04a076446a9af\" data-businessunit-id=\"5536ec090000ff00057eebe7\" data-style-height=\"20px\" data-style-width=\"100%\" data-theme=\"light\"><a href=\"https:\/\/www.trustpilot.com\/review\/www.credible.com\" target=\"_blank\" rel=\"noopener noreferrer\">Trustpilot<\/a><\/div><br \/>\n<!-- End TrustBox widget --><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n<p><a name=\"how-to-calculate-student-loan-interest\"><\/a><\/p>\n<h2>How to calculate student loan interest<\/h2>\n<p>Before you take out a student loan, it\u2019s important to consider how much that loan will cost you over time. This way, you can be prepared for any added expenses.<\/p>\n<p>You can see what your estimated monthly payment will be along with your total interest costs by using our student loan calculator below.<\/p>\n<div class=\"calculator loan\">\n<div class=\"inputs container\">\n\n\t<p>Enter your loan information<span class=\"hidden-md-up\"> to calculate how much you could pay<\/span><\/p>\n\n  <div class=\"row form-groups\">\n  <div class=\"col-xs-8 col-lg\">\n    <div class=\"form-group\">\n  \t\t<label for=\"loan-amount\">Loan amount<\/label>\n  \t\t<span class=\"badge badge-pill\" data-toggle=\"tip\" data-placement=\"top left\">\n  \t\t\t?\t<span class=\"tip \">\n\t\t<span class=\"tip-content\">Enter the total amount borrowed<\/span>\n\t\t<span class=\"tip-arrow\"><\/span>\n\t<\/span>\n\t  \t\t<\/span>\n  \t\t<span class=\"input-group loan-amount\">\n  \t\t\t<span class=\"input-group-addon\">$<\/span>\n  \t\t\t<input type=\"number\" value=\"20000\" step=\"1000\" name=\"loan-amount\" id=\"loan-amount\" aria-label=\"Loan amount\" class=\"form-control\" inputmode=\"numeric\" pattern=\"[0-9]*\">\n  \t\t<\/span>\n    <\/div>\n  <\/div>\n  <div class=\"col-xs-6 col-lg\">\n    <div class=\"form-group\">\n  \t\t<label for=\"interest-rate\">Interest rate<\/label>\n  \t\t<span class=\"badge badge-pill\" data-toggle=\"tip\" data-placement=\"top left\">\n  \t\t\t?\t<span class=\"tip \">\n\t\t<span class=\"tip-content\">Enter your annual interest rate<\/span>\n\t\t<span class=\"tip-arrow\"><\/span>\n\t<\/span>\n\t  \t\t<\/span>\n  \t\t<span class=\"input-group interest-rate\">\n  \t\t\t<input type=\"number\" value=\"4\" step=\".01\" min=\".01\" max=\"100\" name=\"interest-rate\" id=\"interest-rate\" aria-label=\"Interest rate\" class=\"form-control\">\n  \t\t\t<span class=\"input-group-addon\">%<\/span>\n  \t\t<\/span>\n    <\/div>\n\t\t<span class=\"between\">or<\/span>\n  <\/div>\n  <div class=\"col-xs-6 col-lg\">\n    <div class=\"form-group\">\n  \t\t<label for=\"loan-term\">Loan term<\/label>\n  \t\t<span class=\"badge badge-pill\" data-toggle=\"tip\" data-placement=\"top left\">\n  \t\t\t?\t<span class=\"tip \">\n\t\t<span class=\"tip-content\">Enter the amount of time you have to repay your loan<\/span>\n\t\t<span class=\"tip-arrow\"><\/span>\n\t<\/span>\n\t  \t\t<\/span>\n  \t\t<span class=\"input-group loan-term\">\n  \t\t\t<input name=\"loan-term\" value=\"10\" step=\"1\" min=\"1\" max=\"50\" id=\"loan-term\" aria-label=\"Loan term\" type=\"number\" class=\"form-control\" inputmode=\"numeric\" pattern=\"[0-9]*\">\n  \t\t\t<span class=\"input-group-addon\">years<\/span>\n  \t\t<\/span>\n    <\/div>\n\t<\/div>\n\t<\/div>\n\n<\/div>\n<div class=\"outputs container\">\n\n  <div class=\"results row\">\n  <div class=\"col-xs-6 col-sm-4 col-md-6 col-lg-4\">\n  \tTotal Payment\n  \t<big>$<span class=\"total-payment\"><\/span><\/big>\n  <\/div>\n  <div class=\"col-xs-6 col-sm-4 col-md-6 col-lg-4\">\n  \tTotal Interest\n  \t<big>$<span class=\"total-interest\"><\/span><\/big>\n  <\/div>\n  <div class=\"col-xs-12 col-sm-4 col-md-12 col-lg-4\">\n  \tMonthly Payment\n  \t<big>$<span class=\"monthly-payment\"><\/span><\/big>\n  <\/div>\n  <\/div>\n\n  <p class=\"results-sentence\">\n    With a\n    <strong>$<span class=\"output-loan-amount\"><\/span><\/strong>\n        loan, you will pay\n    <strong>$<span class=\"monthly-payment\"><\/span><\/strong>\n    monthly and a total of\n    <strong>$<span class=\"total-interest\"><\/span><\/strong>\n    in interest over the life of your loan. You will pay a total of\n    <strong>$<span class=\"total-payment\"><\/span><\/strong>\n    over the life of the\n    loan, assuming you're making full payments while in school.\n  <\/p>\n\n  \n  <div class=\"cta\">\n    \n  <\/div>\n\n<\/div>\n<\/div>\n\n<p><a name=\"how-rate-indexes-affect-student-loans\"><\/a><\/p>\n<h2>How rate indexes affect student loans<\/h2>\n<p>Variable rate loans, including private student loans with variable interest, use an index to determine your interest rate. The index is based on current market conditions. For example, when inflation is low, an index will generally be low \u2014 but when inflation increases, the index also goes up.<\/p>\n<p>Private lenders will give you a variable interest rate based on that index, plus a margin that\u2019s generally determined based on your credit. If you have a good credit score and history, the margin will be lower, so your variable interest rate will only be a little higher than the index rate.<\/p>\n<p>Here\u2019s how your private lender calculates your variable interest rate:<\/p>\n<p>Your variable rate = Index (which fluctuates) + Margin (which remains the same)<\/p>\n<div class=\"basic-box\" style=\"border: 1px solid #E2E4E6;\"><div class=\"basic-box__inside\"><b>For example:<\/b> If your variable interest rate is equal to the SOFR index + a margin of 3%, your monthly rate could be is as follows:<\/p>\n<p><center>0.78% (current SOFR rate) + 3% (your margin) = 3.78%<\/center><\/div><\/div>\n<h3>What are LIBOR and SOFR?<\/h3>\n<p>A lender might use several indexes to determine your variable interest rate. For a long time, the London Interbank Offered Rate (LIBOR), which is based out of the United Kingdom, was the most common index used for determining variable interest rates. However, this index is scheduled to be discontinued as of June 2023.<\/p>\n<p>Private student loan lenders will generally be required to pick a replacement index that\u2019s comparable to LIBOR. Lenders will likely choose the Secured Overnight Financing Rate (SOFR), as this is the index recommended by the Federal Reserve\u2019s Alternative Reference Rates Committee. SOFR charts the average rate of interest that U.S. banking institutions borrow money from other institutions overnight, using U.S. Treasury bonds as collateral.<\/p>\n<p>In other words, the SOFR rate determines the cost of borrowing for banks, and it helps banks decide how much interest to charge borrowers.<\/p>\n<p><a name=\"fixed-vs-variable-rate-example\"><\/a><\/p>\n<h2>Example of a fixed vs. variable interest rate<\/h2>\n<p>When you\u2019re comparing student loan products, it can be tough to determine whether a fixed interest rate or a variable interest rate will be cheaper. A fixed interest rate will typically be higher than a variable rate when you first take out the loan. But depending on how the index performs, you may end up paying more in interest with a variable rate over time.<\/p>\n<p>Let\u2019s look at an example:<\/p>\n<p>Say you take out a private student loan for $20,000 with a fixed interest rate of 6.42% and a fixed monthly payment of $226 for 10 years.<\/p>\n<p>However, if you choose a variable rate for the $20,000 loan, your initial APR would be 4.15% and you\u2019d have a monthly payment of $204 over the same 10-year repayment period. (The 4.15% APR is based on the current SOFR rate of 0.78 plus a margin of 3.37%.)<\/p>\n<p>Let\u2019s see how the variable rate might change over time:<\/p>\n\n<table id=\"tablepress-969\" class=\"tablepress tablepress-id-969 table table-border-top table-rounded table-no-img-margin table-capitalized-column-titles\">\n<thead>\n<tr class=\"row-1\">\n\t<td class=\"column-1\"><\/td><th class=\"column-2\"><strong>Fixed interest rate<\/strong><\/th><th colspan=\"3\" class=\"column-3\"><center><strong>Variable interest rate<\/strong><\/center><\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-striping row-hover\">\n<tr class=\"row-2\">\n\t<td class=\"column-1\"><strong>Year 1<br \/>\n(SOFR at 0.78)<\/strong><\/td><td class=\"column-2\"><i>Rate<\/i><\/td><td class=\"column-3\"><i>Margin<\/i><\/td><td class=\"column-4\"><i>Index<\/i><\/td><td class=\"column-5\"><i>Variable rate<\/i><\/td>\n<\/tr>\n<tr class=\"row-3\">\n\t<td class=\"column-1\"><strong>Year 2 <br \/>\n(SOFR \u2191 2.0%)<\/strong><\/td><td class=\"column-2\">6.42%<\/td><td class=\"column-3\">3.37%<\/td><td class=\"column-4\">2.78%<\/td><td class=\"column-5\">6.15%<\/td>\n<\/tr>\n<tr class=\"row-4\">\n\t<td class=\"column-1\"><strong>Year 3<br \/>\n(SOFR \u2191 1.0%)<\/strong><\/td><td class=\"column-2\">6.42%<\/td><td class=\"column-3\">3.37%<\/td><td class=\"column-4\">3.78%<\/td><td class=\"column-5\">7.15%<\/td>\n<\/tr>\n<tr class=\"row-5\">\n\t<td class=\"column-1\"><strong>Year 4<br \/>\n(SOFR \u2193 0.5%)<\/strong><\/td><td class=\"column-2\">6.42%<\/td><td class=\"column-3\">3.37%<\/td><td class=\"column-4\">3.28%<\/td><td class=\"column-5\">6.65%<\/td>\n<\/tr>\n<tr class=\"row-6\">\n\t<td class=\"column-1\"><strong>Year 5<br \/>\n(SOFR \u2191 0.25)<\/strong><\/td><td class=\"column-2\">6.42%<\/td><td class=\"column-3\">3.37%<\/td><td class=\"column-4\">3.53%<\/td><td class=\"column-5\">6.90%<\/td>\n<\/tr>\n<tr class=\"row-7\">\n\t<td class=\"column-1\"><strong>Year 6<br \/>\n(SOFR \u2193 1.0%)<\/strong><\/td><td class=\"column-2\">6.42%<\/td><td class=\"column-3\">3.37%<\/td><td class=\"column-4\">2.53%<\/td><td class=\"column-5\">5.90%<\/td>\n<\/tr>\n<tr class=\"row-8\">\n\t<td class=\"column-1\"><strong>Year 7<br \/>\n(SOFR \u2193 0.75%)<\/strong><\/td><td class=\"column-2\">6.42%<\/td><td class=\"column-3\">3.37%<\/td><td class=\"column-4\">1.78%<\/td><td class=\"column-5\">5.15%<\/td>\n<\/tr>\n<tr class=\"row-9\">\n\t<td class=\"column-1\"><strong>Year 8<br \/>\n(SOFR \u2191 2.0%)<\/strong><\/td><td class=\"column-2\">6.42%<\/td><td class=\"column-3\">3.37%<\/td><td class=\"column-4\">3.78%<\/td><td class=\"column-5\">7.15%<\/td>\n<\/tr>\n<tr class=\"row-10\">\n\t<td class=\"column-1\"><strong>Year 9<br \/>\n(SOFR \u2193 1.5%)<\/strong><\/td><td class=\"column-2\">6.42%<\/td><td class=\"column-3\">3.37%<\/td><td class=\"column-4\">2.28%<\/td><td class=\"column-5\">5.65%<\/td>\n<\/tr>\n<tr class=\"row-11\">\n\t<td class=\"column-1\"><strong>Year 10<br \/>\n(SOFR \u2193 0.25%)<\/strong><\/td><td class=\"column-2\">6.42%<\/td><td class=\"column-3\">3.37%<\/td><td class=\"column-4\">2.03%<\/td><td class=\"column-5\">5.40%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n<p>Though your variable rate in this example would be lower than your fixed rate for the majority of your repayment term, there are four years during which your variable rate (and therefore your monthly payment and total interest paid) would be higher than your fixed rate.<\/p>\n<p>It might be a good idea to pay more than your monthly repayment amount with a variable rate loan when the variable rate is low. Paying more than the minimum allows your extra payment to go toward the principal, which will reduce your repayment time and the amount you\u2019ll pay in interest over the life of the loan.<\/p>\n<div class=\"calculator loan\">\n<div class=\"inputs container\">\n\n\t<p>Enter your loan information<span class=\"hidden-md-up\"> to calculate how much you could pay<\/span><\/p>\n\n  <div class=\"row form-groups\">\n  <div class=\"col-xs-8 col-lg\">\n    <div class=\"form-group\">\n  \t\t<label for=\"loan-amount\">Loan amount<\/label>\n  \t\t<span class=\"badge badge-pill\" data-toggle=\"tip\" data-placement=\"top left\">\n  \t\t\t?\t<span class=\"tip \">\n\t\t<span class=\"tip-content\">Enter the total amount borrowed<\/span>\n\t\t<span class=\"tip-arrow\"><\/span>\n\t<\/span>\n\t  \t\t<\/span>\n  \t\t<span class=\"input-group loan-amount\">\n  \t\t\t<span class=\"input-group-addon\">$<\/span>\n  \t\t\t<input type=\"number\" value=\"20000\" step=\"1000\" name=\"loan-amount\" id=\"loan-amount\" aria-label=\"Loan amount\" class=\"form-control\" inputmode=\"numeric\" pattern=\"[0-9]*\">\n  \t\t<\/span>\n    <\/div>\n  <\/div>\n  <div class=\"col-xs-6 col-lg\">\n    <div class=\"form-group\">\n  \t\t<label for=\"interest-rate\">Interest rate<\/label>\n  \t\t<span class=\"badge badge-pill\" data-toggle=\"tip\" data-placement=\"top left\">\n  \t\t\t?\t<span class=\"tip \">\n\t\t<span class=\"tip-content\">Enter your annual interest rate<\/span>\n\t\t<span class=\"tip-arrow\"><\/span>\n\t<\/span>\n\t  \t\t<\/span>\n  \t\t<span class=\"input-group interest-rate\">\n  \t\t\t<input type=\"number\" value=\"4\" step=\".01\" min=\".01\" max=\"100\" name=\"interest-rate\" id=\"interest-rate\" aria-label=\"Interest rate\" class=\"form-control\">\n  \t\t\t<span class=\"input-group-addon\">%<\/span>\n  \t\t<\/span>\n    <\/div>\n\t\t<span class=\"between\">or<\/span>\n  <\/div>\n  <div class=\"col-xs-6 col-lg\">\n    <div class=\"form-group\">\n  \t\t<label for=\"loan-term\">Loan term<\/label>\n  \t\t<span class=\"badge badge-pill\" data-toggle=\"tip\" data-placement=\"top left\">\n  \t\t\t?\t<span class=\"tip \">\n\t\t<span class=\"tip-content\">Enter the amount of time you have to repay your loan<\/span>\n\t\t<span class=\"tip-arrow\"><\/span>\n\t<\/span>\n\t  \t\t<\/span>\n  \t\t<span class=\"input-group loan-term\">\n  \t\t\t<input name=\"loan-term\" value=\"10\" step=\"1\" min=\"1\" max=\"50\" id=\"loan-term\" aria-label=\"Loan term\" type=\"number\" class=\"form-control\" inputmode=\"numeric\" pattern=\"[0-9]*\">\n  \t\t\t<span class=\"input-group-addon\">years<\/span>\n  \t\t<\/span>\n    <\/div>\n\t<\/div>\n\t<\/div>\n\n<\/div>\n<div class=\"outputs container\">\n\n  <div class=\"results row\">\n  <div class=\"col-xs-6 col-sm-4 col-md-6 col-lg-4\">\n  \tTotal Payment\n  \t<big>$<span class=\"total-payment\"><\/span><\/big>\n  <\/div>\n  <div class=\"col-xs-6 col-sm-4 col-md-6 col-lg-4\">\n  \tTotal Interest\n  \t<big>$<span class=\"total-interest\"><\/span><\/big>\n  <\/div>\n  <div class=\"col-xs-12 col-sm-4 col-md-12 col-lg-4\">\n  \tMonthly Payment\n  \t<big>$<span class=\"monthly-payment\"><\/span><\/big>\n  <\/div>\n  <\/div>\n\n  <p class=\"results-sentence\">\n    With a\n    <strong>$<span class=\"output-loan-amount\"><\/span><\/strong>\n        loan, you will pay\n    <strong>$<span class=\"monthly-payment\"><\/span><\/strong>\n    monthly and a total of\n    <strong>$<span class=\"total-interest\"><\/span><\/strong>\n    in interest over the life of your loan. You will pay a total of\n    <strong>$<span class=\"total-payment\"><\/span><\/strong>\n    over the life of the\n    loan, assuming you're making full payments while in school.\n  <\/p>\n\n  \n  <div class=\"cta\">\n    \n  <\/div>\n\n<\/div>\n<\/div>\n\n<p><a href=\"https:\/\/www.credible.com\/blog\/author\/matt-carter\/\">Matt Carter<\/a> contributed to the reporting of this article.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The interest rate on a loan is a percentage of the loan principal charged by the lender as part of your overall loan cost \u2014 essentially, it\u2019s a fee you pay to borrow money. When&hellip; <a class=\"more \" href=\"https:\/\/www.credible.com\/blog\/student-loans\/choosing-fixed-or-variable-rate-student-loan\/\">Continue reading<\/a><\/p>\n","protected":false},"author":114,"featured_media":35434,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"inline_featured_image":false,"footnotes":""},"categories":[2],"tags":[1464],"class_list":["post-2212","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-refinance-student-loans","tag-no-sidebar","choosing-fixed-or-variable-rate-student-loan-2","post_tag-no-sidebar"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Variable vs. Fixed Rate Student Loans: How to Choose | Credible<\/title>\n<meta name=\"description\" content=\"Your student loan interest rate is a major factor in your overall loan cost. 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