What are today’s student loan rates?

While student loans can be a useful tool for financing your education after you’ve exhausted other options like federal grants and scholarships, both federal and private student loans can be expensive if you’re not careful. Interest on your loan can compound quickly, and it can be difficult to keep up with payments as your balance grows—especially in a challenging economy.

Fortunately, millions of student loan borrowers received some relief during the pandemic, thanks to temporary federal student loan interest breaks and moratoriums on federal student loan repayments. But interest on federal student loans will resume on September 1 and payments will be due again Starting from October. If you’re worried about the high interest rates on your current student loans eating into your budget, it might be worth doing the math. Student loan refinancing Can save you money.

And if you’re still financing your education with loans, the good news is that private student loan rates are dropping. But knowing exactly what student loan interest rates are right now can help you better prepare for repayments down the line.

Start exploring student loan options you qualify for right here.

What are today’s student loan interest rates?

Loan Type — Student loan rates vary based on a number of factors, including federal or private.

The following federal and private student loan rates are current as of July 21, 2023. Taka.com.

Federal student loan interest rates

Interest rate on Federal student loans Fixed, so your repayments remain the same throughout the term. Federal student loan rates are set based on the high yield of the 10-year Treasury note at auction. In turn, such loan rates for new borrowers may change every year.

As of July 21, the average federal student rate is:

• Direct Subsidy (Graduate Students): 5.50%
• Direct Un-Subsidized (Graduate Students): 5.50%
• Direct Subsidy (Graduate Students): 7.05%
• Plus Loan (Graduate Students and Parents of Graduate Students): 8.05%

Private Student Loan Interest Rates

rate for Private student loans is set by the lender. That means these loan rates, which are typically offered by banks, credit unions, or private student loan lenders and other financial institutions, can vary — sometimes drastically — based on the lender, loan terms and other factors — your credit score and overall creditworthiness.

Another thing to note is that unlike federal student loans, private student loans can have fixed or variable rates. While a loan with a fixed rate will have the same interest rate throughout the life of the loan, a student loan with a variable rate may result in the rate fluctuating over time.

As of July 21, the average private student rates are:

• Fixed Interest Rate: 4.42% to 15.99%
• Variable interest rates: 5.13% to 16.45%

If you’re looking for a student loan to help finance your education, you have plenty of options to pursue today.

How to get a better student loan rate

If you’re planning to use private student loans for some or all of your education expenses, it’s important to maximize your chances of getting the best loan rate possible. To get a better student loan rate, consider the following.

Decide on a fixed or variable rate

Can come with private student loans Fixed or variable ratesAnd each type of interest rate has potential advantages and downsides, so weigh them and decide which one might work best.

For example, student loans with fixed rates usually come with a low rate to start, but as the rate drops over time, you’ll continue to pay a higher rate of interest on your student loan. On the other hand, variable rates may start out higher, but can gradually decrease if interest rates drop in the future, which can save you money.

Determine the tenure of the loan

The term of your loan can also affect the interest rate you pay on your private student loan. Shorter loan terms will usually come with lower interest rates, but will mean higher monthly payments since you have less time to pay off your loan balance and interest. A private student loan with a longer term usually has a higher interest rate attached, but will result in lower payments each month because you have more time to pay off your loan.

Are you ready to find qualified student loan options? Learn more here now.

Shop around

The rates offered on your student loans can vary widely from one lender to the next. If you borrow from the first lender you find, you may leave money on the table by paying higher interest rates than other lenders.

You should avoid paying more than necessary for your interest rate Compare multiple lenders Before signing on the dotted line. Many lenders will even allow you to check if you’re pre-qualified before filling out a full application, so take advantage of the opportunity to pre-qualify with different lenders and find your rate.

What you may learn is whether you qualify for better rates or terms with a particular lender. Make sure you compare the same loan types and information to get an accurate picture of what your best offers are during the process.

Bottom line

Knowing what the current student loan rates are is an important part of preparing to borrow money for your education. While federal student loan rates won’t change during the school year, private student loan rates can vary greatly from one lender to the next. And if you’re using these types of loans to help finance your education, but you’re not staying on top of current student loan rate trends or shopping around to find the best rate possible, you could be leaving money on the table.