Average private student loan rates fall for borrowers with credit scores of 720, higher

During the week of Dec. 19, 2022, average private student loan rates fell for borrowers with credit scores of 720 or higher who used the Credible marketplace to take out 10-year fixed rate loans and rose for 5-year variable-rate loans.

Private student loan interest rates dropped this week for 10-year fixed-rate loans and increased dramatically for 5-year variable-rate loans. Ten-year loans fell 0.22 percentage points, while rates for 5-year terms saw an uptick of 2.30 percentage points.

In addition to this week’s rate changes, rates for both loan terms are higher than they were at the same time last year.

Still, it’s worth noting that borrowers with good credit may find a lower rate with a private student loan than with some federal loans.

For the 2022-23 academic school year, federal student loan rates will range from 4.99% to 7.54%. Private student loan rates for borrowers with good to excellent credit can be lower right now.

Since federal loans come with certain benefits, like access to income-driven repayment plans, it is advisable to always exhaust federal student loan options first before turning to private student loans to cover any funding gaps.

Private lenders such as banks, credit unions and online lenders provide private student loans. Private loans may be used to pay for education costs and living expenses, which might not be covered by federal education loans.

Interest rates and terms on private student loans can vary depending on your financial situation, credit history and the chosen lender.