Student Loans With Low Interest Rates in May 2025

When you take out student loans, you're responsible for paying back the principal balance and the interest. The rate you qualify for will significantly affect the loan's overall cost, so getting the lowest student loan rate is important for saving money over the life of your loan.

Some student borrowers take out federal student loans, private loans, or a combination of both. Each type treats interest rates differently. To help with your research to determine the best fit for you, here's a look at the best student loan lenders with low interest rates and how they stack up to federal loans.

Current private student loan rates

Federal student loan rates for 2024-2025

You should start by applying for federal student loans through the Department of Education. Federal rates are the same for all student loan borrowers and, instead of basing your interest rate on your credit and financial situation, you must meet basic eligibility criteria like citizenship or permanent residency, age, and enrollment and institution requirements.

These are the current federal student loan interest rates for loans disbursed between July 1, 2024, and July 1, 2025:

Federal student loans come with unique borrower benefits and protections, like forgiveness programs and income-driven repayment plans to help you manage your debt.

Generally, you should maximize your federal loan options first because of their competitive interest rates, repayment options, and forgiveness benefits. Private student loans are a good choice if you’ve used up your federal loan aid and still have more college expenses.

Best low interest student loans

When comparing private student loans, look at interest rates, fees, repayment options, terms, deferment and forbearance options, loan amount requirements, and any borrower perks. Before applying, you may see the rates you prequalify for without affecting your credit.

These student loan lenders currently have fixed interest rates starting at under 4% for well-qualified borrowers:

Related: Can You Get a Student Loan With Bad Credit?

Why you can trust our Credible experts

The Credible editorial team is independent and unbiased. Partners do not influence our editorial content. To help you find the best student loan for your situation, we conduct thorough research and analyze thousands of lender data points. Using data-driven methodologies, we score criteria that are important to you. This allows us to objectively rank student loan lenders and products. To learn more, read our methodology below.

Methodology

To determine the best student loan lenders, Credible collected more than 1,000 points of data on two dozen companies and evaluated them on several different categories: repayment options, eligibility, interest rates, loan terms, and customer support. We assigned a score out of five stars to each lender based on our findings. Below are the weightings assigned to the general categories for the best student loan companies — which comprise individual criteria that are also weighted.

• Repayment options: 30%
• Eligibility: 25%
• Interest rates: 20%
• Loan terms: 15%
• Customer support: 10%

While the best lender for you will depend on your unique needs and financial circumstances, these findings should help answer your questions and assist you in your search for the best student loan.

Learn more about our methodology.

Average student loan interest rates

Private student loan rates fluctuate based on market conditions. These are the weekly average student loan rates for borrowers who prequalified for student loans through Credible:

Pros and cons of federal student loans

Federal student loan rates are fixed, meaning once your loan is disbursed, your rate will never change. Most federal loans don't require a credit check. Instead of determining your interest rate based on your credit and financial history, you must meet basic eligibility criteria like citizenship or permanent residency, age, enrollment, and other institution requirements.

Federal student loans also come with unique borrower benefits and protections, such as forgiveness programs and income-driven repayment plans. You should usually maximize federal loan options first since they have competitive interest rates, repayment options, and forgiveness benefits. Private student loans may be a good option if you've exhausted your federal loan allowance because of borrowing limits and still need more funding.

Pros and cons of private student loans

Private student loans might have a fixed or variable rate and are offered through private financial institutions. Variable rates can change over time based on the rate market and the economy. 

Unlike federal loans, your rate is tied to factors like your credit score, income, and debt-to-income ratio (DTI), among others. The stronger your credit, the more likely you are to access a lender's lowest rates. However, private lenders offer the option to apply with a cosigner, which can lower your interest rate.

How to get the lowest interest rate on student loans

If you plan on taking out private student loans, these are some tips to help you get approved for the lowest possible interest rate:

Raise your credit score

A strong credit score can help you secure lower interest rates and access the most competitive loan offers. For example, in March 2025, borrowers who looked into a 5-year student loan through the Credible marketplace with excellent credit (780+) prequalified for a 6.59% rate, while those with a score between 640 and 679 prequalified for a 14.5% rate.

To improve your credit, pay bills on time, reduce outstanding balances, and keep credit card usage to a minimum. Also, try to avoid applying for several loans or credit cards in a short timeframe.

Apply with a cosigner

If you have a parent, partner, or family member with strong credit, consider asking them to cosign your student loan. Having a cosigner can improve your chances of approval and may also help qualify you for a lower interest rate.

For example, data collected by Credible between February and April 2025 showed that borrowers who prequalified for 10-year fixed-rate student loans with a cosigner received lower rates by as much as 2.45 percentage points, depending on their credit score.

Sign up for autopay

Many private lenders offer an interest rate reduction for borrowers who sign up for automatic payments. Usually, the discount is 0.25 percentage points off your rate.

Choose the shortest loan repayment term

A shorter loan term reduces the lender's risk, which translates to a lower interest rate. However, choosing a shorter loan term means your monthly payments will be higher, but you'll pay less interest over time.