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The average interest rate on 10-year fixed-rate private student loans moved down last week. For many borrowers, that means rates continue to be low enough to make private student loans a decent option, especially if you have good credit.
Average Private Student Loan Interest Rates
The average fixed interest rate on a 10-year private student loan was 7.21% from November 24 to November 29. That’s for borrowers with a credit score of 720 or higher who prequalified on Credible.com’s student loan marketplace. The average interest rate on a five-year variable-rate loan was 9.51% among the same population, according to Credible.com.
These rates are accurate as of the week of November 24, 2025.
Related: Best Private Student Loans
Fixed-Rate Loans
Last week, the average fixed rate on 10-year loans declined by 0.38 percentage points to 7.21%. The week prior, the average stood at 7.59%.
Borrowers currently in the market for a private student loan will receive a lower rate than they would have at this time last year. At this time last year, the average fixed rate on a 10-year loan was 8.03%, 0.82 percentage points higher than today’s rate.
If you were to finance $20,000 in student loans at today’s average fixed rate, you’d pay around $234 per month and approximately $8,126 in total interest over 10 years, according to Forbes Advisor’s student loan calculator.
Variable-Rate Loans
The average rate on five-year variable student loans moved up by 0.40 percentage points last week. Now it sits at 9.51%.
In contrast to fixed rates, variable interest rates fluctuate over the course of a loan term. Variable rates may start lower than fixed rates, especially during periods when rates are low overall, but they can rise over time.
Private lenders often offer borrowers the option to choose between fixed and variable interest rates. Fixed rates may be the safer bet for the average student, but if your income is stable and you plan to pay off your loan quickly, it could be beneficial to choose a variable loan.
Financing a $20,000 five-year private loan at 9.51% would yield a monthly payment of approximately $420. A borrower would pay $5,208 in total interest over the life of the loan. But the rate in this example is variable, and it could move up or down each month.
Applying for a Private Student Loan
Private student loans may be a good option if you reach the annual borrowing limits for federal student loans or if you’re otherwise ineligible for them. You should consider a federal student loan as your first option, as interest rates are generally lower and you’ll enjoy more liberal repayment and forgiveness options than with a private loan.
Getting a private student loan generally involves applying directly through a non-federal lender, such as a bank, credit union or online entity. You may also be able to get a private student loan through a nonprofit organization, state agency or college.
Keep in mind that undergraduates with limited credit history often need a co-signer who can meet the lender’s borrowing requirements.
When applying for a private student loan, take into consideration the following:
- Your qualifications. Private student loans are credit-based. Lenders typically require a credit score in the higher 600s. This is where having a co-signer can be particularly beneficial.
- Where to apply. You can apply directly on the lender’s website, via mail or over the phone.
- Your options. Look at what each lender offers and compare the interest rate, term, future monthly payment, origination fee and late fee. Also, check to see if the lender offers a co-signer release so that the co-borrower can eventually come off of the loan.
Shopping for Private Student Loans
When looking for the best private student loan option, take a close look at the overall cost of the loan, including the interest rate and fees. It’s also important to consider the type of help the lender offers if you can’t afford your payments.
If you have good or excellent credit, you have a better chance at landing the best interest rates.
How much should you borrow? Experts generally recommend borrowing no more than you’ll earn in your first year out of college. How much can you borrow? Some lenders cap the amount you can borrow each year, while others don’t. When you’re shopping around for a loan, talk to lenders about how the loan is disbursed and what costs it will cover.
Current Federal Student Loan Interest Rates
If you need to borrow for school, federal student loans are generally the best option. This is because federal loans offer various borrower protections, such as access to income-driven repayment plans and student loan forgiveness programs. Additionally, most federal loans don’t require a credit check or co-signer.
How Lenders Determine Your Rate
The rate you receive depends on whether you’re getting a fixed or variable loan. Rates, in part, are based on your credit profile. Those with higher credit scores often get the lowest rates. But your rate is based on other factors as well. Income and even the degree you’re working on and your career can play a part.
What Are the Advantages of Private Student Loans?
There are several advantages to private student loans, including:
- Competitive interest rates. Many private lenders offer competitive interest rates, especially if you have excellent credit or a creditworthy co-signer.
- Low or no fees. The best private student loans don’t charge an origination fee, unlike federal Direct loans, which charge a loan disbursement fee. Some private lenders don’t even charge fees for late payments.
- High loan amounts. Depending on the lender, you may be able to borrow up to your school’s total cost of attendance minus any previously awarded financial aid.
- Grace period. Some private lenders let you defer payments while you’re in school and for a few months after graduation. Some grace periods last up to nine months after graduation.
- Easy online application process. It’s easy to apply for a private student loan online in just a few steps. Some lenders also let you check your rates through prequalification, allowing you to compare offers without dinging your credit score.
- Bonus perks, depending on the lender. Some lenders offer additional borrower benefits, such as financial counseling, career services, deferment and forbearance or cash-back rewards for graduating or getting good grades.
- Availability to international students. International students are not eligible for federal financial aid from the U.S. Department of Education, but they may qualify for a private student loan to pay for school.