- Federal Student Loan Interest Rates
- Private Student Loan Interest Rates
- How to Lower Your Student Loan Interest Rate
What is the current student loan interest rate? It’s a question that many college students and their families face when taking out loans to pay for college. The current student loan interest rate is 4.53%, which is unchanged from last year.
Checkout this video:
Federal Student Loan Interest Rates
Federal student loan interest rates are determined by Congress and set for the life of the loan. The rates shown in the chart below are fixed rates for the duration of the loan. For new federal student loans first disbursed on or after July 1, 2020 and before July 1, 2021, the interest rate is 2.75% for undergraduate loans, 4.30% for graduate loans, and 6.84% for PLUS loans.
Federal Direct Subsidized Loans
The interest rate for Federal Direct Subsidized Loans first disbursed on or after July 1, 2020, and before July 1, 2021, is 2.75%.
Federal Direct Unsubsidized Loans
The interest rate for Federal Direct Unsubsidized Loans first disbursed on or after July 1, 2019 and before July 1, 2020 is 6.08%.
Federal Direct PLUS Loans
The interest rate for Federal Direct PLUS Loans first disbursed on or after July 1, 2020, and before July 1, 2021, is 5.3%.
Private Student Loan Interest Rates
The average private student loan interest rate for the 2019-2020 school year is 5.05%. This is the starting point for most private lenders, but some may go lower. Some factors that will affect your interest rate include your credit score, the length of your repayment term, and the type of private student loan you choose.
Sallie Mae Smart Option Student Loan
The Sallie Mae Smart Option Student Loan offers private student loan consolidation with competitive interest rates and repayment options. Sallie Mae is a trusted lender with millions of satisfied customers. You can apply for a Smart Option Student Loan online or over the phone.
The current interest rate for the Sallie Mae Smart Option Student Loan is 6.25% APR for fixed-rate loans and 4.50% APR for variable-rate loans. The repayment term for fixed-rate loans is 10 years, and the repayment term for variable-rate loans is 7 years. There is no origination fee or prepayment penalty for either type of loan.
Wells Fargo Private Consolidation Loan
The interest rate for the Wells Fargo Private Consolidation Loan is a fixed rate. The current student loan interest rates are:
-5.49% APR to 14.87% APR
Your interest rate will be based on creditworthiness, and will be between 5.49% APR and 14.87% APR.
SunTrust Custom Choice Loan
The current student loan interest rate for the SunTrust Custom Choice Loan is 4.74% for loans disbursed on or after July 1, 2019, and before July 1, 2020. This fixed rate is higher than the rates for both federal student loans and private student loans from other lenders. So, if you have the option to take out a federal loan instead of a private loan, you may want to consider doing so.
How to Lower Your Student Loan Interest Rate
If you’re currently paying off student loans, you might be looking for ways to lower your interest rate. The current student loan interest rate is 4.53%, but there are a few things you can do to lower your rate. You can choose to refinance your loan, consolidate your loans, or make extra payments.
Refinance Your Student Loans
Refinancing your student loans can save you money in interest and lower your monthly payments. You can also choose to refinance your loans to a shorter repayment term, which could help you pay off your debt faster.
To compare rates from multiple lenders, use a student loan refinancing calculator. Once you’ve found the best rate, apply directly with the lender. If you have good credit, you should be able to qualify for a lower interest rate than what you’re currently paying.
You can also try negotiating with your current lender for a lower interest rate. If you have a good history with your lender and are current on your payments, they may be willing to work with you.
If you have private loans, you may be able to consolidate them into a single loan with a lower interest rate. Federal consolidation loans do not offer this benefit, however, so make sure you only consolidate private loans.
Apply for Income-Driven Repayment Plans
There are several repayment plans that tie your monthly payment to your income. These are called income-driven repayment (IDR) plans. Depending on your income, family size, and state of residence, your monthly payment could be as low as $0 per month. And, if you have a remaining balance after 20 or 25 years of qualifying payments, that balance is forgiven.
To apply for an IDR plan:
-If you have a Direct Loan or a Federal Family Education Loan (FFEL) Program loan, contact your loan servicer to discuss which IDR plan might be right for you. You can find contact information for your servicer on www.nslds.ed.gov by logging in with your Federal Student Aid PIN. Or, you can call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243). TTY users can call 1-800-730-8913.
If you have a Direct Consolidation Loan or an FFEL Program Consolidation Loan that was used to repay other federal student loans (not private student loans), the interest rate on the consolidation loan is the weighted average of the interest rates on the repaid loans rounded up to the nearest one eighth of one percent (.125%), but not more than 9.5%.
Pay Off Your Student Loans Early
If you want to lower your student loan interest rate, one option is to pay off your loans early. You can do this by making extra payments or by refinancing your loans.
Paying off your loans early will lower your overall interest costs because you will accrue less interest over the life of the loan. If you have high-interest loans, paying them off early can also save you a significant amount of money.
Refinancing your student loans can also help you lower your interest rate. When you refinance, you take out a new loan with a lower interest rate and use the money to pay off your existing loans. This can save you money on interest and help you repay your loans more quickly.