Private Student Loan Rates: June 10, 2025 - Loan Rates Start To Increase
Rates on 10-year fixed-rate private student loans moved up last week. If you're interested in picking up a private student loan, you can still get a relatively low rate.
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The average fixed interest rate on a 10-year private student loan was 7.31% from June 2 to June 7. 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 10.00% among the same population, according to Credible.com.
These rates are accurate as of the week of June 2, 2025.
Related: Best Private Student Loans
The average fixed rate on 10-year loans last week jumped by 0.50 percentage point to 7.31%. The week prior, the average stood at 6.81%.
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 7.66%, 0.35 percentage point higher than today's rate.
A borrower who finances $20,000 in private student loans at today's average fixed rate would pay around $235 per month and approximately $8,251 in total interest over 10 years, according to Forbes Advisor's student loan calculator.
Average variable rates on five-year loans moved up last week, from 8.63% on average to 10.00%.
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.
If you were to finance a $20,000 five-year loan at a variable interest rate of 10.00%, you'd pay approximately $425 on average per month. In total interest over the life of the loan, you'd pay around $5,496. Of course, since the interest rate is variable, it could fluctuate up or down from month to month.
If you reach the annual borrowing limits for federal student loans or if you're otherwise ineligible for them, private student loans may be a good choice. But consider a federal student loan as your first option since the interest rates are typically lower. You'll also receive more liberal repayment and forgiveness options with federal student loans.
When shopping for a private student loan, you'll generally need to apply directly through a non-federal lender. This includes banks, credit unions, nonprofit organizations, state agencies, colleges and online entities.
It's important to note that you'll need a qualified co-signer if you have limited credit history, as undergraduates often do.
Here's what to consider when applying for a private student loan:
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.
Remember, those with good or excellent credit typically get the best rates.
Experts generally recommend that you borrow no more than what you'll earn in your first year out of college. While some lenders cap the amount of money you can borrow each year, others don't. When comparing loans, figure out how the loan will be disbursed and what costs it covers.
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.
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.
It's generally a good idea to max out your eligibility for federal financial aid before borrowing private student loans, but private loans have some benefits. For one thing, they don't have the same annual borrowing limits as federal loans. Many lenders let you borrow up to your cost of attendance minus any other financial aid you've already received.
Plus, you can usually apply throughout the year with a fast, easy online application. For instance, you can apply for a private loan if you need funds halfway through the semester. Some lenders can fund your loan in a week or two, though others take longer.
Private lenders can also offer competitive interest rates, especially to borrowers with excellent credit. Some private loans don't have any fees, so you don't have to worry about origination fees, administrative fees or even late fees in some cases.
You also may not have to make payments on your private student loan while you're in school or for six to nine months after you graduate, depending on the lender. Some lenders offer additional perks to borrowers, such as forbearance and deferment, the option to skip a payment or career counseling services.
Some private lenders offer loans to international students. International students are not eligible for federal student loans from the U.S. Department of Education, so a private student loan can provide the funds they need for college or graduate school in the U.S.
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