Federal student loans often have the lowest interest rates. Federal student loan rates are determined by the government, do not take into account a borrower’s credit, and are fixed, which means they will not alter after the loan is taken out. However, federal loans can only cover a portion of an individual’s school costs. Borrowers may also need to take out a private Student Loan to cover the shortfall.
Private student loan interest rates vary, but the main lenders now provide fixed interest rates comparable to government student loans, which are now 5.50% for undergraduate direct subsidized and unsubsidized loans. The only disadvantage of private student loans is that not everyone will get the lowest Rate. The interest rate on a private student loan is decided by criteria such as your credit score, credit history, and income.
themoneymail do Select set out to identify the finest low-interest student loans. We concentrated on lenders’ interest rates, whether they offer fixed and variable rates, any rate discounts with autopay, credit requirements and eligibility, payback terms, and fees. (For additional information on how we compiled this list, please refer to our methodology).
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1. College Ave (Best overall)
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Eligible borrowers
Undergraduate and graduate students, parents
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Loan amounts
$1,000 minimum; maximum up to cost of attendance
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Loan terms
Range from 5 to 20 years
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Loan types
Variable and fixed
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Borrower protections
Deferment, forbearance, and grace period options available
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Co-signer required?
Only for international students
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Offer student loan refinancing?
Yes
Pros
- High loan amount
- Flexible repayment arrangements
- You can select between variable and fixed rates.
- Borrowers have hardship protection.
- Students in the United States are not obliged to have a co-signer
- Offers cosigner release.
- There are no origination, application, or prepayment costs.
- 0.25% interest rate reduction for autopay.
- Offers student loan refinancing.
- Accepts in-school payments.
Cons
- Non-cosigned loans typically carry higher interest rates.
- Co-signer release cannot be made until half of the repayment period has passed.
College Ave now provides undergraduate fixed interest rates ranging from 4.43% to 17.99% APR (graduate fixed rates from 4.43% to 14.49% APR), as well as undergraduate variable interest rates ranging from 5.59% to 17.99% APR. When you sign up for autopay, you get a 0.25% rate savings, and borrowers have a variety of repayment options, including paying in school with full principal and interest, interest-only payments, a flat $25 monthly payment, or deferring payments until after school.
2. Citizen (Runner-up)
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Eligible borrowers
Undergraduate and graduate students, parents
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Loan amounts
$150,000 maximum, or cost of attendance, whichever is lower
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Loan terms
Range from 5 to 15 years
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Loan types
Variable and fixed
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Borrower protections
Forbearance options available
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Co-signer required?
No
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Offer student loan refinancing?
Yes
Pros
- Flexible repayment arrangements
- You can select between variable and fixed rates.
- Borrowers have hardship protection.
- No co-signer is necessary.
- Offers cosigner release.
- There are no origination, application, or prepayment costs.
- Autopay offers up to 0.50% interest rate savings.
- Offers student loan refinancing.
- Accepts in-school payments.
Cons
- Non-cosigned loans typically carry higher interest rates.
- The loan amount is limited to the maximum of $150,000 or the cost of attendance, whichever is lower.
Citizens Bank’s fixed interest rates range from 4.99% to 13.29% APR, while variable interest rates range from 6.37% to 14.27% APR. Citizen account holders receive a 0.50% loyalty and autopay discount.
3. Sallie Mae Student Loan (Best for applying with a co-signer)
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Eligible borrowers
Undergraduate and graduate students, borrowers seeking career training
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Loan amounts
$1,000 minimum; maximum up to cost of attendance
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Loan terms
Range from 10 to 15 years
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Loan types
Variable and fixed
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Borrower protections
Deferment and forbearance options available
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Co-signer required?
No
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Offer student loan refinancing?
No
Pros
- High loan amount
- You can select between variable and fixed rates.
- Borrowers have hardship protection.
- No co-signer is necessary.
- Offers cosigner release.
- There are no origination, application, or prepayment costs.
- 0.25% interest rate reduction for autopay.
- Accepts in-school payments.
Cons
- Non-cosigned loans typically carry higher interest rates.
- Does not provide student loan refinancing.
Sallie Mae’s fixed interest rates range from 4.50% to 15.49% APR, while variable interest rates range from 6.37% to 16.70% APR. Sign up for autopay and receive a 0.25% rate savings. Borrowers who have a co-signer are more likely to get a cheaper interest rate from any private lender. Sallie Mae allows borrowers to eventually release their co-signer after graduating, making 12 on-time principal and interest payments, and meeting certain credit conditions.
4. Ascent Funding (Best for applying without a co-signer)
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Eligible borrowers
Qualifying undergraduate juniors and seniors, graduate students
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Loan amounts
Up to $200,000 for undergraduate and $400,000 for graduate loans
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Loan terms
Range from 5 to 15 years
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Loan types
Variable and fixed
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Borrower protections
Deferment and forbearance options available
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Co-signer required?
No
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Offer student loan refinancing?
No
Pros
- Considers applicants with no credit.
- High loan amount
- You can select between variable and fixed rates.
- Borrowers have hardship protection.
- No co-signer is necessary.
- Offers cosigner release.
- There are no origination, application, or prepayment costs.
- Autopay offers up to a 1% interest rate savings.
- 1% cashback rewards
- Accepts in-school payments.
Cons
- Non-cosigned loans typically carry higher interest rates.
- Does not provide student loan refinancing.
For non-cosigned student loans, Ascent provides fixed interest rates ranging from 13.05% to 15.04% APR and variable interest rates ranging from 13.27% to 15.18% APR. Any non-cosigned student loan will have a higher interest rate than a cosigned student loan, but Ascent’s rates are among the lowest for this type of loan, allowing students without a cosigner to qualify on their own. Sign up for autopay and receive up to a 1% rate savings.
5. SoFi (Best for refinancing)
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Eligible borrowers
Undergraduate and graduate students, parents, health professionals
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Loan amounts
$5,000 minimum (or up to state); maximum up to cost of attendance
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Loan terms
Range from 5 to 15 years; up to 20 years for refinancing loans
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Loan types
Variable and fixed
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Borrower protections
Forbearance options like unemployment protection are available
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Co-signer required?
No
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Offer student loan refinancing?
Yes
Pros
- High loan amount
- You can select between variable and fixed rates.
- Borrowers have hardship protection.
- No co-signer is necessary.
- There are no origination, application, or prepayment costs.
- 0.25% interest rate reduction for autopay.
- SoFi members receive career coaching, financial guidance from planners, and a 0.125% interest rate
- discount on any additional SoFi lending product, including student loan refinancing.
- Accepts in-school payments.
Cons
- Non-cosigned loans typically carry higher interest rates.
- There are no co-signer release options available.
- Loan size minimum of $5,000.
SoFi’s fixed refinancing interest rates range from 5.24% to 9.99% APR, while variable refinancing interest rates range from 6.24% to 9.99% APR. Borrowers can refinance to get a cheaper interest rate and a new repayment term. Sign up for autopay and receive a 0.25% rate savings.
6. Earnest
Pros
- Skip a payment every 12 months.
- Nine-month grace period.
- Very low starting rates.
Con
- There are no student loans available in Nevada.
- There is no co-signer release.
- A credit score of 650 and a minimum income of $35,000 are necessary.
Overview: Earnest is an online lender that provides private student loans to undergraduate and graduate students with flexible repayment choices. Earnest’s grace period is nine months, which is three months longer than what most lenders provide. Borrowers can also miss one payment every twelve months.
Why Earnest is best for flexible repayment terms: Borrowers can choose their loan period, which runs from five to twenty years. Furthermore, once every twelve months, debtors might choose to postpone a payment.
Requirements: Borrowers must be currently attending or planning to attend a qualified four-year Title IV institution. Undergraduate borrowers must be enrolled at least half-time. Borrowers must also be the age of majority in their state and a citizen or permanent resident of the United States, or have a co-signer who is both the age of majority and a citizen or permanent resident. Borrowers or co-signers must have at least three years of clean credit, no bankruptcy history, a $35,000 yearly income, and a credit score of at least 650.
Fees: Earnest imposes a return payment fee of up to $8. Florida citizens may be charged a 0.35 percent stamp tax.
More about our top low-interest student loans
1. College Ave
College Ave has affordable interest rates with no application, origination, or prepayment costs. College Avenue also provides hardship protections like as postponement, forbearance, and grace period choices. Borrowers with College Avenue student loans can begin repaying while still in school.
Eligible loans
Undergraduate and graduate loans, graduate health professions, and parent loans
Loan amounts
$1,000 minimum; maximum up to cost of attendance
Loan terms
5, 8, 10, 15 years; graduate loans up to 20 years
Citizens Bank
Eligible loansUndergraduate and graduate loans, parent loans
Loan amounts
$150,000 maximum, or cost of attendance, whichever is lower
Loan terms
5, 10, 15 years
Sallie Mae
Eligible loansUndergraduate and graduate loans, health profession, medical and dental residency loans, bar study loans, and career training student loans
Loan amounts
$1,000 minimum; maximum up to cost of attendance
Loan terms
10, 15 years
Ascent
Ascent examines those who do not have established credit, as well as those who fulfill the minimum credit requirements but not the income or payback criteria. In certain circumstances, the lender considers additional factors such as the borrower’s school, program, graduation date, major, GPA, cost of attendance, and Satisfactory Academic Progress.
Ascent charges no penalties for early repayment of your loan, nor does it charge an origination or application fee. Ascent also offers perks such as 1% cash back on principal loan amounts at graduation, as well as deferment and forbearance choices for borrowers. Ascent student loan students can begin making payments while still in school.
Eligible loans
Undergraduate and graduate loans, health professions and PhD, and Master’s loans
Loan amounts
$2,001 minimum; maximum up to $200,000 for undergraduate loans; up to $400,000 for graduate loans
Loan terms
5, 7, 10, 12, 15, 20 years
SoFi
SoFi offers competitive refinancing rates, no application or origination fees, and no prepayment penalties. Borrowers can get unemployment benefits and other forbearance alternatives, as well as make student loan payments while still enrolled in school.
SoFi student loan debtors receive member perks such as premium vacation offers, tailored career coaching, financial planning from real-life counselors, and an unemployment protection program that temporarily modifies their loan payments
Eligible loans
Undergraduate and graduate loans, parent loans, health professions loans
Loan amounts
$5,000 minimum (or up to state); maximum up to cost of attendance
Loan terms
5, 7, 10, 15 years; refinancing loans up to 20 years
7. PNC
PNC Bank provides undergraduate, graduate, and professional loans with flexible repayment terms. It does not charge an application or origination fee.
PNC provides a 0.50% discount for setting up autopay, which is higher than other lenders. You are also eligible for a semi-annual $2,000 scholarship.
Loan Details
- APRs. Fixed rates for PNC Bank undergraduate loans range from 6.69% to 13.89%, while variable rates range from 8.44% to 15.64%. PNC Bank’s graduate student loan fixed rates range from 6.69% to 13.89%, while variable rates range from 8.44% to 15.64%.
- Terms: Five-, 10- or 15-year terms are available.
- Loan amounts. Undergraduate loans allow you to borrow up to $50,000 each year, with a total maximum of $225,000, including other federal or private loans. Graduate student loans can be up to $65,000, with a total maximum of $225,000.
- Co-signer release. Co-signer releases become accessible after 48 consecutive on-time payments.
- Available discounts. PNC Bank provides a 0.50% discount for autopay.
Types of student loans
Students have numerous alternatives for student loans based on their degree program:
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Federal undergraduate loans: Federal student loans are available to both US citizens and qualifying non-citizens, regardless of credit or co-signer status. Undergraduates may be eligible for either Direct Unsubsidized Loans or Direct Subsidized Loans, the latter of which is only available to students in need.
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Federal graduate loans: Graduate students may apply for federal Direct Unsubsidized Loans or Direct PLUS Loans. Unsubsidized loans are cheaper, however, PLUS Loans have larger loan amounts.
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Private undergraduate loans: Borrowers who have maxed out their federal student loans may seek private loans. International students who do not qualify for federal aid may rely solely on these loans to study in the United States.
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Private graduate loans: Private lenders provide loans for graduate studies in several fields, such as law, business, and medicine.
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Student loan refinancing: If you wish to adjust your payment period or interest rate on an existing student loan, refinancing is an option. Refinancing involves repaying your existing loans in return for a new loan.
Federal vs. private student loans
The United States Department of Education offers federal student loans, whilst banks, credit unions, and private lenders offer private student loans. It is nearly always better to begin your search for federal student loans.
The rates and eligibility requirements for federal and private loans differ the most. Private lenders base their rates on your credit score, and a low credit score results in higher rates. Federal student loans, on the other hand, offer the same rate to all borrowers regardless of loan type. The typical interest rate on a private student loan is between 4 and 15 percent, whereas federal loans charge 4.99 percent, 6.54 percent, or 7.54 percent, depending on the loan type.
Borrowing constraints on federal loans mean that borrowers frequently turn to private lenders to cover their remaining educational expenses. While private loans can often cover the full cost of attendance, they do not provide as many repayment options.
Most private student loans also provide few chances for loan forgiveness. Federal student loan forgiveness alternatives do not extend to private debt.
| Federal Student Loan | Private Student Loan | |
|---|---|---|
| Interest rates | 5.50% to 8.05% for 2023-24 | 4.39% to 16.99% fixed, 4.98% to 16.99% variable |
| Fees | 1.057% to 4.228% origination fee varies Loans | s by lender |
| Borrowing limits | Dependent undergraduates pay $31,000, independent undergraduates pay $57,500, and graduates pay the full cost of attendance. | 100% whole cost of attendance with several lenders’ qualifications. |
| n requirements must | o be a U.S. citizen or eligible noncitizen and be enrolled at least half-time varies. | Vary by a lender; frequently requires good credit and consistent income. |
| Benefits | Income-based repayment programs, strong deferment and forbearance, no minimum credit score with | h interest rates for good-credit borrowers, frequently $0 fees, and lender-specific advantages |
| Drawbacks | Potentially higher interest rates than private loans offer for applicants with strong credit, loan amount limits for undergraduate borrowers. | Credit checks are needed, high rate ceilings, and fewer borrower protections. |
Banks vs. Online Lenders
There are some distinctions between student loan choices available through banks and Internet lenders. Both can be advantageous, but it is critical to grasp the differences before making a decision.
Most online lenders provide pre-qualification services for borrowers who want to estimate terms and fees. This method necessitates a light credit inquiry, which has no bearing on your score. Banks frequently need a hard credit check to qualify, which can lower your score.
Banks also have fewer options for weak credit outside of adding a co-signer. Online lenders generally provide separate loan options for borrowers with terrible credit, with more liberal terms. Loans for bad credit, on the other hand, are often associated with high-interest rates.
Advantages and Disadvantages of Getting Student Loans from a Bank
Before selecting a bank for your private student loan needs, weigh the benefits and drawbacks.
Advantages
- High loan amounts. Most banks allow you to borrow up to the amount required to meet your school-certified costs, less any previous financial aid.
- Rate discounts. If you currently have a bank account or sign up for autopay, you may be eligible for a 0.25% or higher discount.
- Flexible repayment options. Many banks allow you to postpone payments while attending school and for six months after graduation. You can also receive an interest-only or small monthly payment while in school to help reduce interest payments.
Disadvantages
- Credit and income requirements. Banks look at your credit and income before accepting you for a student loan. Most banks require a credit score of at least 670 and a consistent source of income to qualify. If you are unable to meet the standards, obtaining a cosigner may be an alternative.
- Slow funding time. Traditional banks do not necessarily offer the same quick application process as certain online lenders. This may lead to slower funding.
- Co-signer releases aren’t always available. Not all banks provide co-signer releases. Even those that do provide them cannot ensure that your co-signer release will be authorized.
What type of student loan has the lowest interest rate?
Federal student loans often have the lowest interest rates. These are issued by the United States Department of Education, and most students will be eligible for some form of government aid.
Which bank has the lowest interest rate for student loans?
Because student loan rates fluctuate and are advertised as a range, there is no one bank with the lowest rates. However, just a few (those on this list) offer rates that are comparable to one another. Just keep in mind that the rate you receive is determined by your financial situation, such as your credit score and salary.
How to get a low-interest student loan with bad credit?
It’s tough to obtain a low-interest loan with terrible credit because banks and lenders typically charge higher rates to consumers with poor credit because they are viewed as larger risks. Your best bet is to check how much you can get in federal student loans, which have a single rate and do not consider borrowers’ credit scores. Federal student loans often have the lowest interest rates.
Is it possible to get a lower rate in the future?
Refinancing your student loans allows you to acquire a cheaper interest rate in the future. Refinancing allows you to select a new loan term, and the higher your credit score, the cheaper your interest rate. To get started, refer to themoneymail Select’s list of the top student debt refinance companies.
How student loan interest works
When you apply for a student loan, you will receive an interest rate. This interest rate is an additional percentage of your loan amount that you must pay every month.
With federal loans, this rate is fixed for all borrowers and is set by the federal government each year. Your credit score, income, and other factors all influence the interest rate on private loans. Students with strong financial health and great credit ratings receive the most economical private student loans.
Borrowers can commonly select between fixed and variable interest rates. Fixed interest rates are constant throughout the loan’s term, whereas variable rates alter in response to market developments. Federal student loans are always fixed, although private student loans can be both fixed and variable.
How student loan interest is calculated
While exploring interest rates, you can calculate your student loan interest to see how much you’ll pay each month. This is how you do it:
- Find your daily interest rate: Divide your yearly interest rate by the number of days in the year (365).
- Determine your daily interest accrual charge: Multiply your daily interest rate by the principal balance.
- Calculate your monthly payment: Multiply your daily interest by the number of days in your billing period.
If you have $10,000 in student loans, a 6% interest rate, and a 30-day billing cycle, a little more than $49 of your first month’s payment will go toward interest.
A student loan calculator can also be used to calculate the amount of interest you will pay over the life of your loan.
In Conclusion
The lowest-interest student loans are primarily government loans, but if you require additional financing, the private lenders on this list have some of the best rates. The rest depends on your credit and money to decide the exact rate you receive. Shop around to see what you can prequalify for without affecting your credit score.
Why trust themoneymail Select?
Our objective at themoneymail Select is to give our readers high-quality service journalism and comprehensive consumer advice, allowing them to make informed financial decisions. Our team of specialist writers and editors, all of whom have a deep understanding of student loan programs, do rigorous reporting for each student loan review. While themoneymail Select receives commissions from affiliate partners on many offers and links, we develop all of our content independently of our commercial team or any outside third parties, and we take pride in our journalistic standards and ethics. See our approach to learn more about how we select the best low-interest student loans.
Our methodology
themoneymail Select investigated and compared private student loan funding from national banks, credit unions, and online lenders to find the lowest interest rates. We filtered down our list to only those who provide competitive student loan rates and prequalification options that do not harm borrowers’ credit.
While the companies we selected for this post frequently rank as having some of the market’s cheaper interest rates, we also compared each company on the following features:
- Broad availability: All of the companies on our list offer undergraduate and graduate private student loans, with both variable and fixed interest rates to select from.
- Flexible loan terms: Each company offers a choice of financing options that borrowers can tailor to their monthly budget and the length of time they need to repay their student loan. Each organization also allows borrowers to begin repaying their student loans while still in school, so saving them money.
- No origination or signup fee: None of the companies on our list charge consumers an upfront “origination fee” upon taking out a loan.
- No early payoff penalties: The companies on our list do not charge borrowers prepayment penalties for repaying loans early.
- Streamlined application process: We ensured that companies provided a fast online application process.
- Autopay discounts: All of the mentioned firms provide auto-pay Loans interest rate savings.
- Private student loan protections: Each company on our list provides some form of financial hardship insurance to borrowers.
- Loan sizes: The above companies provide private student loans in a variety of levels, up to the cost of college attendance. Each organization advertises its unique loan sizes, and completing a preapproval process can offer borrowers an indication of what their interest rate and monthly payment will be.
- Credit requirements/eligibility: We considered the minimal credit scores and income levels required if this information was accessible.
- Customer support: Every organization on our list offers customer assistance through phone, email, or secure online messaging. We also chose lenders with an online resource hub or guidance center to help borrowers educate themselves on student loans in general.
After examining the qualities listed above, we ranked our choices in order of best overall, runner-up, best for applying with a co-signer, best for applying without a co-signer, and best for refinance.
It is important to note that private student loan rates and fee structures are not guaranteed indefinitely; they can alter without notice and frequently fluctuate in conjunction with the Fed rate. Choosing a fixed-rate APR ensures that the interest rate and monthly payment remain stable throughout the loan.
A borrower’s interest rate is determined by their credit score, income, debt-to-income (DTI) ratio, savings, payment history, and general financial situation. To obtain private student loans, lenders will run a thorough credit check and seek a complete application, which may include proof of income, identity verification, proof of address, and other requirements.
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