What's a good student loan interest rate? These lenders offer some of the lowest APRs
When you take out a student loan, you’ll repay more than just the amount you borrowed. You’ll also pay interest, which is the cost of borrowing the money.
So what counts as a “good” student loan interest rate? In general, the lower the rate, the less you’ll pay over the life of the loan. A higher rate typically means higher monthly payments and more interest costs over time. While you’ll want to lock in the lowest rate possible, how much control you have depends on the type of loan you choose. Federal student loan rates are set by the government, while private loan rates vary based on factors like your credit profile, income and whether you apply with a co-signer.
What’s a good rate on a student loan?
Federal student loan interest rates
Federal student loan interest rates are set by the federal government each spring and are tied to the yield on the 10-year Treasury note. Those rates take effect on July 1 and remain in place for the entire academic year (through June of the following year). With federal student loans, a “good” interest rate isn’t about qualifying for a lower rate. Every borrower receives the same rate for a given loan type and academic year.
The current federal student loan interest rates are here:
| Federal loan type | Interest rate for 2026 to 2027 academic year |
|---|---|
| Undergraduate (Subsidized and Unsubsidized) | 6.52% |
| Graduate and Professional (Unsubsidized) | 8.07% |
| PLUS Loans (Parent) | 9.07% |
Federal loans come with either fixed or subsidized interest terms. Unsubsidized loans begin accruing interest as soon as the funds are disbursed, and subsidized loans don’t accrue interest while you’re enrolled at least half-time or during eligible grace and deferment periods.
Once you take out a federal student loan, your interest rate is fixed for the life of the loan, so it won’t change over time. This makes it easier to budget your monthly payments since it’s the same each month. Many federal loan servicers also offer a small interest rate discount, usually 0.25 percentage points, for enrolling in autopay.
Because Congress sets federal student loan rates, your credit score doesn’t affect the interest rate you receive.
Private student loan interest rates
Private student loan lenders set their interest rates based in part on the prime rate, a benchmark that typically moves with the Federal Reserve’s federal funds rate. When the prime rate rises, borrowing generally becomes more expensive. When it falls, lenders often lower their rates.
Unlike federal student loans, private lenders typically advertise a range of rates; for example, 3.99% to 15.99% APR. Where you fall within that range depends on factors such as your credit score, income, debt-to-income ratio and whether you apply with a co-signer. Borrowers with stronger credit profiles generally qualify for the lowest advertised rates.
So, what counts as a “good” private student loan interest rate? It depends on the broader interest rate environment. A 4.8% rate is objectively cheaper than a 9.8% rate, but if prevailing rates have risen and the lowest rate you qualify for is 5.8%, that may be the best available option.
As a general rule, lower is always better. And while there’s no universal cutoff for a “good” student loan rate, interest rates of 8% or higher are often considered high-interest debt. If possible, aim for a rate below that benchmark.
Low-interest student loans
Once you’ve exhausted all federal aid options for financing your education, private lenders can help fill in any gaps.
If you’re aiming to score the lowest interest rate possible on a new private student loan, your credit profile will play a big part. There are some lenders, however, who do stand out for offering competitive rates.
Sallie Mae offers both fixed and variable interest rates. You can prequalify to see your estimated rate without hurting your credit. There are no origination fees, three repayment options, option to add a co-signer, plus a 0.25 percentage point discount with autopay.
- Loans available to part-time and continuing ed students
- Co-signer release after just 12 payments
- No origination fee
- Offers loans for a wide variety of educational needs including: bar study, medical school, residency and relocation costs, dental school, residency and relocation costs, nursing school/health professions, commercial flight school, coding boot camp and professional certifications
- No student loan refinancing
- Doesn’t offer parent loans
- Hard credit check to prequalify
- Late payment fee
You can also prequalify to see your estimated interest rate with lender Ascent, which offers industry-leading low rates. There’s up to a 1% rate discount when signing up for autopay, depending on the type of loan you have, as well as no origination fee or prepayment penalty.
- Considers borrowers with no credit
- High loan limit
- Co-signer release available after just 12 payments
- Up to 1% interest rate discount for autopay*
- 1% cash back rewards*
- Considers alternative requirements like the borrower’s school, program, graduation date, major, GPA, cost of attendance and Satisfactory Academic Progress (SAP) to grant approval
- Maximum fixed APR is on the high side
- Doesn’t offer student loan refinancing
Disclosure: *Ascent Funding, LLC products are made available through Bank of Lake Mills or DR Bank, each Member FDIC. Subject to credit approval. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent’s Terms and Conditions please visit AscentFunding.com/Ts&Cs. Annual Percentage Rates (APRs) displayed above are effective as of 3/1/2026 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments. Loans subject to individual approval, restrictions and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions. The final amount approved depends on the borrower’s credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation.1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers that agree to the AscentUP Terms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.
Two other options for low rates are College Ave and SoFi — both with no origination fees. College Ave may be a better fit if you’re looking for smaller loan amounts and flexible repayment options. SoFi is a good choice for those wanting a fast co-signer release and member perks.
Pursue a college education with funding from these experienced lenders
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Eligible borrowers
Undergraduate and graduate students, parents, students in MBA, law, health professional and dental programs
Loan amounts
$5,000 (or state-mandated minimum) up to the cost of attendance
Loan terms
5, 7, 10, 15, years; up to 20 years for refinancing loans
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