Variable APR
5.59% to 16.99%
Fixed APR
4.43% to 16.99%
Best Low-interest Student Loan Options
Ascent
Undergraduate Variable APR
Why We Picked It
Ascent offers both co-signed and non-co-signed student loans, which gives borrowers without co-signers more college funding options. We scored the company based on its co-signed credit-based student loan for undergraduates.
Ascent stands out for its range of payment reduction and postponement options, rare among private student loan companies. Borrowers can choose a graduated repayment plan, which provides a lower monthly payment to start that increases over time. That can be useful for graduates just starting out, who will likely make more money as they move up in their careers.
Borrowers also can pause payments if they’re experiencing a temporary financial hardship for one to three months at a time, up to a maximum of 24 months total. However, taking this forbearance means you will repay the loan over a longer period. Interest continues to accrue during forbearance, which is true for the vast majority of private student loans.
Ascent also offers benefits for students including 1:1 free success coaching*, a graduation reward of 1% of the loan’s original principal balance and access to monthly no-essay scholarships.
Ascent was a winner of Forbes Advisor’s best private student loans of 2021 awards. Learn more here.
Pros & Cons
- Both co-signed and independent loans available
- International students can qualify with a co-signer who has U.S. citizenship or permanent residency
- Interest rate estimate available without undergoing a hard credit check
- Charges late fees
- Maximum APR is above 10%
Details
Extra Details
Loan terms: 5, 7, 10, 12 or 15 years. See repayment examples for more details.
Loan amounts available: $2,001** up to total cost of attendance, to a maximum of $200,000 per academic year ($200,000 aggregate)
Eligibility: Student borrowers with no credit history can qualify with a creditworthy co-signer. Co-signers must show income of at least $24,000 for the current and previous year. Co-signers must have a minimum credit score which can vary.***
Forbearance options: When experiencing financial hardship, borrowers can suspend payments for up to three months at a time, for a total of up to 24 months throughout the loan term. Only four rounds of forbearance (up to 12 months’ worth) may be taken consecutively.
Co-signer release policy: Available after 12 months of consecutive automatic debit payments, if the primary borrower meets certain credit score requirements.***
*Other eligibility requirements apply. Learn more at AscentFunding.com/BorrowerBenefits.
**The minimum amount is $2,001 except for the state of Massachusetts. Minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.
***Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 1/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
Federal Direct Subsidized Loans
Why We Picked It
Among undergraduate and graduate student loan options, federal direct subsidized loans are the cheapest and most flexible. Only undergraduate borrowers with financial need—as determined by the information in the Free Application for Federal Student Aid, or FAFSA—can get subsidized loans. The government will pay the interest when students are in school, during their grace period and when they put their loans into deferment.
The interest rate on subsidized loans is one of the lowest you’ll find, and no co-signer is required. All eligible undergraduate borrowers qualify and they receive the same rate regardless of credit history. Most importantly, borrowers of federal subsidized loans have access to income-driven repayment options that can lower the amount due and loan forgiveness for those who work in public service fields.
While there is an origination fee of 1.057%, it’s lower than what many private lenders offering loans without a co-signer charge.
Pros & Cons
- Low fixed interest rate
- Multiple repayment and forgiveness options available
- Interest subsidy during certain periods
- Charges an origination fee
- Low annual loan limits
Details
Loan terms: 5, 7, 10, 15 and 20 years
Loan amounts available: $5,000 minimum; no maximum, except for associate’s degree graduates, who can refinance up to $50,000.
Eligibility: Must be enrolled at least half-time in a school that participates in the federal direct loan program. Must be an undergraduate and be determined to have financial need.
Forbearance options: Forbearance available for up to three years in certain circumstances. Enrolling in an income-driven repayment program can lower monthly payments and result in loan forgiveness after 20 to 25 years.
Federal Direct Unsubsidized Loan
Why We Picked It
Federal direct unsubsidized loans offer low fixed interest rates, and this type of loan isn’t credit-based and doesn’t require a co-signer. All eligible undergraduate borrowers qualify, and they receive the same rate regardless of credit history.
While there’s a chance the most creditworthy borrowers could get a lower interest rate with a private student loan, they’ll miss out on a range of consumer protections that might be useful in the future. Borrowers of federal direct unsubsidized loans have access to income-driven repayment options that can lower the amount due and loan forgiveness for those who work in public service fields.
Direct unsubsidized loans come with an origination fee of 1.057%, while most private loans do not. But in many cases, the low interest rate and loan benefits make the fee worth it.
Pros & Cons
- Low fixed interest rate
- Multiple repayment and forgiveness options available
- No co-signer required in order to get lowest rate
- Charges an origination fee
Details
Loan terms: Terms of 10 to 25 years are available, depending on the repayment plan.
Loan amounts: Loan amounts up to $12,500 per year and $57,500 in aggregate in aggregate are available.
Eligibility: You must be enrolled at least half-time in a school that participates in the federal direct loan program.
Forbearance options: Forbearance available for up to three years in certain circumstances. Enrolling in an income-driven repayment program can lower monthly payments and result in loan forgiveness after 20 to 25 years.
Co-signer release policy: N/A
SoFi®
Variable APR
5.99% to 14.70%
with autopay and rate sale discount
Fixed APR
4.44% to 14.70%
with autopay and rate sale discount
5.99% to 14.70%
with autopay and rate sale discount
4.44% to 14.70%
with autopay and rate sale discount
Why We Picked It
SoFi is perhaps best known as a student loan refinance lender, but it also makes loans to undergraduates, graduate students, law and business students and parents. Its undergraduate student loan product offers mostly industry-standard features, plus a few perks: no late fees, an interest rate discount of 0.125% if your co-signer already uses another SoFi product and job search help through its career team.
Pros & Cons
- Access to SoFi member benefits, including career coaching
- No late fees
- Interest rate estimate available without undergoing a hard credit check
Details
Loan terms: 5, 7, 10 and 15 years.
Loan amounts available: $1,000 up to the total cost of attendance.
Eligibility: Does not disclose credit score or income requirements.
Forbearance options: SoFi offers a specific Unemployment Protection Program that allows borrowers to pause payments in three-month increments, for up to 12 months, if laid off from work. A separate forbearance program is also available for borrowers experiencing other types of economic hardship, such as medical expenses. Borrowers can take up to 12 months total forbearance, no matter which program they use.
Co-signer release policy: Available after 24 payments.
Discover
Why We Picked It
Discover charges no late fees on its private student loans, and it provides an interest rate discount if borrowers choose to pay the interest on the loan as it accrues while they’re in school. It also offers several unique deferment, forbearance and hardship payment options.
Co-signer release is not available, though, and there is only one loan term: 15 years. Know that you can prepay the loan without penalty, and if you have the means to do so, paying off a student loan in less than 15 years could save you a substantial amount in interest.
Pros & Cons
- Borrowers with a 3.0 GPA or higher can receive 1% of their loan amount as a cash reward
- International students can qualify with a co-signer who has U.S. citizenship or permanent residency
- Multiple economic hardship repayment options
- No co-signer release program
Details
Loan term: 15 years
Loan amounts available: $1,000
Eligibility: Discover does not disclose its minimum credit score or income requirements, but in 2019 the company reported that 94% of all private loan borrowers had a FICO score of 660 or higher.
Forbearance options: Borrowers can take up to 12 months of forbearance, which is standard across the industry. But Discover also offers several additional hardship options, including a three-month suspension of payments for borrowers early in the repayment cycle and a six-month reduced payment option.
Co-signer release policy: None.
College Ave
Why We Picked It
College Ave offers a solid all-around private loan product with a few unique features. Borrowers can choose an eight-year term, which is in addition to the typical five-, 10- and 15-year terms many lenders provide. Borrowers can also access an extended six-month grace period beyond the initial payment-free six months allowed after separating from school.
Pros & Cons
- Interest rate estimate available without undergoing a hard credit check
- International students can qualify with a co-signer who has U.S. citizenship or permanent residency
- Long time period (210 days) before unpaid loans go into default
Details
Loan terms: 5, 8, 10, 15 and 20 years
Loan amounts available: $1,000 up to 100% of the school-certified cost of attendance
Eligibility: Applicants must have a minimum credit score in the mid-600s.
Forbearance options: Up to 12 months of forbearance is available, in three- to six-month increments
Co-signer release policy: Available after 24 payments
*Borrowers with a co-signer who choose the shortest repayment term available and who make full monthly payments while in school qualify for the lowest rates.
1 – College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
2 – All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3 – Cover up to 100% of your cost of attendance as certified by your school and less any other financial aid you might receive. Minimum $1,000.
Citizens Bank
Why We Picked It
Citizens Bank’s parent loan offers comparatively low interest rates, and borrowers can qualify for an interest rate discount of up to 0.50% if they have an existing account with the bank. (Student loans are available in all states, but checking and savings accounts are only available in Connecticut, Delaware, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Vermont.)
Citizens Bank also offers a relatively rare loan modification program, introduced in spring 2020, that allows for reduced monthly payments for a period of 12 months. That’s in addition to the industry-standard 12 months of forbearance.
Pros & Cons
- Maximum interest rate under 10%
- Loan modification option in addition to standard forbearance
- No origination fee
- No rate estimate available without soft credit check
- Non-U.S. citizens cannot apply
Details
Loan terms: 5 or 10 years
Origination fee: None
Loan amounts available: $1,000 to $350,000
Eligibility: Parent applicant and student must be U.S. citizens. Student must attend school at least half-time.
Forbearance options: Up to 12 months throughout the life of the loan, provided in two-month increments.
Sallie Mae
Why We Picked It
Borrowers can qualify for a Sallie Mae student loan even if they’re attending school less than half-time, which not all lenders allow. After graduation, borrowers also have access to a few hardship repayment programs beyond forbearance, including a rate reduction or one year of interest-only payments.
Sallie Mae’s graduate student loan offers a comparatively short time period after which primary borrowers can apply to release their co-signers: 12 months.
Pros & Cons
- No origination fee
- Co-signer release available after 12 monthly payments
- Only one loan term available
- No rate estimate available with soft credit check
Details
Loan terms: 15 years
Loan amounts available: $1,000 up to total cost of attendance; no aggregate graduate student loan limit
Eligibility: International students can apply with a U.S. citizen co-signer. Borrowers are eligible if they’re attending full-time, half-time or less than half-time.
Forbearance options: Up to 12 months throughout loan term. Interest-only payment option for one year after leaving school.
Co-signer release policy: Available after 12 on-time monthly payments
PNC Bank
Variable APR
7.89% to 14.99%
(including 0.50% discount for automatic payments)
Fixed APR
6.99% to 13.94%
(including 0.50% discount for automatic payments)
7.89% to 14.99%
(including 0.50% discount for automatic payments)
6.99% to 13.94%
(including 0.50% discount for automatic payments)
Why We Picked It
PNC Bank offers an extra-generous 0.50% interest rate discount for making automatic payments, and it provides a 12-month loan modification program for borrowers in financial distress (in addition to 12 months of forbearance). Loan modification lowers the interest rate and monthly payment charged.
It also offers co-signer release, though after an even longer period than Citizens Bank’s policy: 48 months.
Pros & Cons
- 12-month payment reduction option, in addition to forbearance, for borrowers experiencing an economic hardship
- 0.50% interest rate discount available
- No interest rate estimate available without hard inquiry
- Co-signer release after 48 months, about 24 months later than many other lenders’ policies
Details
Loan terms: 5, 10 and 15 years
Loan amounts available: Up to $50,000 annually, with an overall maximum limit of $225,000
Eligibility: Does not disclose credit score or income requirements.
Forbearance options: Up to 12 months of forbearance available.
Co-signer release policy: Co-signers can be released from the loan after 48 payments.
Tips for Comparing Low-interest Student Loans
Federal student loans provide the same fixed rate to every borrower regardless of credit history. That’s one of their biggest advantages. It’s always best to take out the maximum amount of federal student loans you qualify for before turning your attention to private student loans.
When comparing private lenders, know that only the most creditworthy borrowers—typically those with good or excellent credit scores, steady income and low debt-to-income ratios—will qualify for the lowest advertised interest rates. That’s true if you apply with a co-signer, too; the better their credit profile, the lower the interest rates you’ll receive.
If you have poor credit or no credit, consider working specifically with a lender that offers student loans for bad credit. Many undergraduates who don’t yet have lengthy credit histories apply using a co-signer, which can make them eligible for a wider range of loans at lower interest rates. But if you don’t have access to one, look into our picks for the best student loans without a co-signer.
Beyond interest rates, when deciding on a loan, consider features like available economic hardship programs, whether or not the lender allows you to release your co-signer after a period of time and the number of loan repayment schedules you can choose from.
Methodology
We scored 14 institutions that offer federal and private student loans across 15 data points in the categories of interest rates, fees, loan terms, hardship options, application process and eligibility. We chose the nine lenders who earned four stars or more.
The following is the weighting assigned to each category:
- Hardship options: 30%
- Interest rates: 20%
- Application process: 15%
- Fees: 13%
- Loan terms: 11%
- Eligibility: 11%
Specific characteristics taken into consideration within each category included number of months of forbearance available, economic hardship repayment options available beyond traditional forbearance, time to default, disclosure of credit score and income requirements.
Lenders with advertised interest rates under 3% scored the highest, as did those who offered more than the standard 12 months of forbearance, who made their loans available to non-U.S. citizens, who offered interest rate discounts beyond the standard 0.25% for automatic payments, who offered multiple loan terms maxing out at 15 years and who charged minimal fees.
In some cases, lenders were awarded partial points, and a maximum of 3% of the final score was left to editorial discretion based on the quality of consumer-friendly features offered.
To learn more about how Forbes Advisor rates lenders, and our editorial process, check out our Loans Rating & Review Methodology.
Compare Personalized Student Loan Rates
Takes Up To 3 Minutes
What Is a Low Interest Rate for Student Loans?
What constitutes a low interest rate for student loans varies based on your creditworthiness, loan term, type of interest rate and the general economic conditions of the marketplace. For private student loans, variable interest rates can vary from about 1% to upwards of 12%; fixed interest rates are generally higher and can range from about 3% to 13% or more.
In June 2022, borrowers with a credit score of 720 or higher qualified for an average fixed rate of 5.61% on a private 10-year loan, according to data from Credible. For a five-year private loan with a variable rate, the average interest was 3.67%.
Unlike private student loans, federal loans have standardized interest rates. Everyone who qualifies for these loans receives the same rate, regardless of their credit. That means borrowers with less-than-perfect credit will likely find a lower rate with federal loans.
How to Get Low-interest Student Loans
For private student loans, the lowest interest rates are reserved for borrowers with excellent credit, a stable income and a low debt-to-income ratio. If you don’t meet these criteria, work to improve these areas before applying for a private student loan.
Your credit is a major factor in determining the interest rates you qualify for, so increasing your credit score can have a big impact. You can review your credit report for any errors that may be artificially bringing your score down and dispute them with the appropriate credit bureau. Also be sure to pay all your bills on time, as your payment history makes up a significant portion of your score. Consider your credit utilization, as well; keeping your credit card balances low is a simple way to boost your credit.
If your credit is as healthy as possible and you still can’t qualify for the interest rates you’d like, consider adding a well-qualified co-signer to your student loan application. A co-signer is a friend or family member with good credit who is added to your loan and is equally responsible for paying off the debt if you can’t repay it. Because a co-signer with strong credit makes the loan less risky for the lender, you can qualify for lower rates by adding one.
Summary: Best Low-Interest Student Loans
Frequently Asked Questions (FAQs)
How are interest rates determined for private student loans?
Private student loans usually offer variable and fixed interest rates that are based on the borrower’s creditworthiness. Variable rates rise and fall according to the index they follow. For example, the lender may use the prime rate as its benchmark.
If you have good or excellent credit, then you’ll be eligible for a lower interest rate. But if you have poor or fair credit, prepare for an interest rate on the higher end of the range. Using a creditworthy co-signer can help you get a lower rate.
Should I choose a fixed or variable interest rate?
Fixed rates are the safer bet because they’ll never increase in the future. Especially if you borrow during a period when interest rates are low, you’ll benefit from a rate that will stay low even if economic conditions change.
Some lenders offer variable rates that start out markedly lower than fixed rates. The risk in borrowing a variable-rate loan is that the rate will increase over time. But if you have a plan to pay down your student loan very quickly after graduation—or, even better, while you’re still in school—you may be able to avoid pricey increases in interest.
Is it possible to get a lower rate in the future?
Student loan refinancing is a way to get a lower interest rate on loans you’ve already borrowed. When you refinance, a new private company—typically a bank, credit union or online lender—pays off the student loans you choose to refinance, and you’ll get a new loan with an interest rate tied to your credit history, income and other characteristics.
Many lenders require a degree in order to refinance, so it’s best to wait until you’ve graduated. Some lenders have more relaxed degree requirements, but they may want to see a history of on-time student loan payments for a period of time first (say, 12 months). You also typically must be out of school before refinancing, with some exceptions.
You should consider student loan refinancing if you have a good or excellent credit score and stable income (or a co-signer who does) and your current loans have high enough interest rates that you’ll benefit from a lower rate. Of the lenders that disclosed their minimum credit scores for student loan refinancing to Forbes Advisor, all had a minimum credit score of 650 or higher.
How do I get low-interest student loans without co-signer?
To get a low-interest student loan without the help of a co-signer, you’ll have to qualify on your own. You’ll need a high credit score and a consistent income that comfortably covers your other debt obligations to be eligible for the lowest rates on private loans.
If you can’t qualify for desirable rates on private loans, federal student loans may still offer you a relatively low interest rate. The rates on federal loans are standardized, and most are not based on your credit or income—that means you could get competitive rates even if you don’t have much of a credit history.
How do I get low-interest student loans with a co-signer?
If you have poor or average credit, it will likely be easier to qualify for low interest rates with the help of a co-signer. You should ensure that your co-signer is well-qualified and has healthy credit—if they have a spotty credit history, adding them to your application won’t help much.
Once you’ve found a qualified co-signer who you trust, it’s as simple as adding them to your loan application. Often, co-signers can fill out their portion of the application themselves. They should be prepared to provide their personal information along with details about their financial circumstances, including recent pay stubs or tax data to verify their income.
Can you get low-interest student loans for bad credit?
It’s very unlikely that you’ll get a low-interest private student loan if you have bad credit. While there are student loans specifically for bad-credit borrowers, they come with higher rates to make up for the added risk to the lender.
Some types of bad-credit student loans don’t check your credit. Instead, these lenders consider alternative factors such as your field of study, grade point average and estimated future earnings. However, these types of loans also come with higher interest rates than a traditional student loan.
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Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
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