Credible takeaways
- Whether you can lower your student loan interest rate depends largely on the type of loan you have.
- Refinancing student loans can sometimes help you get a lower interest rate.
- Improving your credit score, having a cosigner, and shopping around can also help you get a lower student loan interest rate.
As with any financial product, interest rates on student loans can vary widely. Federal student loan interest rates for the 2025-26 school year range from 6.39% to 8.94%, depending on the loan type. Private student loans available through Credible currently have fixed APRs ranging from 2.85% to 17.99%.
If you’re borrowing money to pay for your education, you want to secure a rate on the lower end of either of those scales. These strategies can help.
Current student loan refinance rates
Can you lower the interest rate on your student loans?
Whether you can secure a lower rate on your student loan depends on the type of loan it is. Federal student loan interest rates, for example, are set in stone and the same for all borrowers. Congress establishes those rates annually ahead of each school year.
“It’s not possible to lower rates when borrowing federal student loans,” Stacey MacPhetres, senior director of education finance for EdAssist by Bright Horizons, explains. “Interest rates reset annually, though. So it is possible that borrowers will have different interest rates for their federal student loans for each year they’re enrolled.”
The only way to obtain a lower interest rate on an existing federal loan is to refinance it into a private loan. But refinancing federal student loans comes with significant drawbacks. We’ll discuss this option further later.
On the other hand, private student loan rates vary widely based on the lender you choose, your credit score, and other factors. Shopping around, beefing up your credit score, and planning ahead before applying can — and often will — get you a more affordable interest rate.
Improve your credit to qualify for lower rates
If you’re applying for a private student loan, improving your credit score is one of the best things you can do for your interest rate.
“While secondary credit criteria, such as your debt-to-income ratio, duration of employment with your current employer, and income may affect eligibility for a private student loan, the interest rate depends primarily on your credit score and the credit score of the cosigner,” says Mark Kantrowitz, a financial aid expert.
Kantrowitz, author of “How To Appeal for More Financial Aid” and other books on the subject, notes that having a cosigner with good credit can also help you secure a lower interest rate. In fact, many undergraduate students applying for private student loans require cosigners to qualify.
“Most typical undergraduate students do not have enough established credit history to permit borrowing without a creditworthy cosigner,” MacPhetres says. “Therefore, most private lenders will require undergraduates to apply with another individual whose credit can support the borrowing criteria.”
Steps you can take to improve your credit score include reducing your debts, setting your bills on autopayment (late payments can really ding your score), and disputing any errors you find on your credit report. Avoiding the opening of new accounts or lines of credit can also help.
Refinance your student loans to get a better rate
If you already have a student loan and want to reduce the interest rate you’re currently paying, refinancing is an option. This move replaces your loan (or multiple loans) with a new one that has a different term, rate, and other features.
Whether refinancing student loans is a smart move depends on the rate you’re paying on your current student loan debt and what rate you could qualify for on a new loan. For example, if your credit score has increased since you initially took out your loans, you may be able to qualify for a lower rate on a new one.
“It’s essential that you have the credit necessary to support the refinance loan with better terms or consider borrowing with a cosigner with strong credit,” MacPhetres says.
You can refinance private or federal student loans. However, it’s important to understand that when you refinance federal loans, they’ll become private loans and lose the benefits that student loans come with. These include potential loan forgiveness, income-based repayment plans, and other perks.
“It’s important to understand what you may risk when refinancing student loans,” MacPhetres says. “Federal student loans have certain terms and protections that do not exist under private refinance programs.”
You also have the option to combine multiple federal student loans into a federal Direct Consolidation Loan. The difference between federal student loan consolidation and refinancing, however, is that consolidation doesn't lower your interest rate. Instead, the new rate is the weighted average of the interest rates of the loans being consolidated, rounded up to the nearest one-eighth of a percent. The primary benefit is simplifying repayment by combining multiple loans into a single monthly payment. You also preserve the federal loan benefits.
Other ways to reduce your student loan rate
Another great way to reduce your student loan interest rate is to simply shop around. Get loan quotes from multiple lenders and compare each on fees, rates, and loan offerings.
Editor insight: “I recommend comparing at least three lenders before committing. Student loan interest rates can vary widely, and the best offer isn’t always from the first lender you check.”
— Richard Richtmyer, Student Loans Managing Editor, Credible
You can also compare the discounts offered by different lenders.
Some common discounts include:
- Setting up autopay
- Graduating on time
- Having good grades
- Making consistent on-time payments
- Having a bank account or other product with the lender
If you still can’t get a lower interest rate on your student loans, try to make payments toward your balances while in school and during student loan grace periods. While this won’t lower your interest rate outright, it can reduce how much you pay in interest over time.
When does it make sense to refinance for a lower rate?
Refinancing your student loans might make sense if your credit score has improved since you first applied for your loans, you have the support of a creditworthy cosigner, or market rates have dropped notably below your current rate.
If you have federal student loans, refinancing usually only makes sense if you’re certain you won’t need any of the benefits that come with them — such as Public Service Loan Forgiveness, which can cancel student loan balances if you go into a qualifying public service career and meet other criteria, or income-driven repayment plans that base your monthly payments on how much you earn.
“Refinancing may get you a better interest rate, but then you'll lose the superior benefits of federal student loans,” Kantrowitz says.
FAQ
Can I get a lower student loan rate without refinancing?
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How much can I save by lowering my student loan rate?
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What’s the best credit score for low student loan interest rates?
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Are variable student loan rates lower than fixed rates?
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Can I switch my student loan from a high fixed rate to a lower one?
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