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Best Low Rate Interest Student Loan Banks

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Federal student loans often have the lowest interest rates. Federal student loan rates are determined by the government, do not take into account a borrower’s credit, and are fixed, which means they will not alter after the loan is taken out.

However, federal loans can only cover a portion of an individual’s school costs. Borrowers may also need to take out a private student loan to cover the shortfall.

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Private student loan interest rates vary, but the main lenders now provide fixed interest rates comparable to government student loans, which are now 5.50% for undergraduate direct subsidized and unsubsidized loans. The only disadvantage of private student loans is that not everyone will get the lowest rate. The interest rate on a private student loan is decided by criteria such as your credit score, credit history, and income.

themoneymail Select set out to identify the finest low-interest student loans. We concentrated on lenders’ interest rates, whether they offer fixed and variable rates, any rate discounts with autopay, credit requirements and eligibility, payback terms, and fees. (For additional information on how we compiled this list, please refer to our methodology).

1. Best overall: College Ave

  • Eligible borrowers

    Undergraduate and graduate students, parents

  • Loan amounts

    $1,000 minimum; maximum up to cost of attendance

  • Loan terms

    Range from 5 to 20 years

  • Loan types

    Variable and fixed

  • Borrower protections

    Deferment, forbearance, and grace period options available

  • Co-signer required?

    Only for international students

  • Offer student loan refinancing?

    Yes – click here for details

Pros

  • High loan amount
  • Flexible repayment arrangements
  • You can select between variable and fixed rates.
  • Borrowers have hardship protection.
  • Students in the United States are not obliged to have a co-signer
  • Offers cosigner release.
  • There are no origination, application, or prepayment costs.
  • 0.25% interest rate reduction for autopay.
  • Offers student loan refinancing.
  • Accepts in-school payments.

Cons

  • Non-cosigned loans typically carry higher interest rates.
  • Co-signer release cannot be made until half of the repayment period has passed.

College Ave now provides undergraduate fixed interest rates ranging from 4.43% to 17.99% APR (graduate fixed rates from 4.43% to 14.49% APR) and undergraduate variable interest rates ranging from 5.59% to 17.99% APR.

When you sign up for autopay, you get a 0.25% rate savings, and borrowers have a variety of repayment options, including paying in school with full principle and interest, interest-only payments, a flat $25 monthly payment, or deferring payments until after school.

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2. Runner-up: Citizens™

  • Eligible borrowers

    Undergraduate and graduate students, parents

  • Loan amounts

    $150,000 maximum, or cost of attendance, whichever is lower

  • Loan terms

    Range from 5 to 15 years

  • Loan types

    Variable and fixed

  • Borrower protections

    Forbearance options available

  • Co-signer required?

    No

  • Offer student loan refinancing?

    Yes – click here for details

Pros

  • Flexible repayment arrangements
  • You can select between variable and fixed rates.
  • Borrowers have hardship protection.
  • No co-signer is necessary.
  • Offers cosigner release.
  • There are no origination, application, or prepayment costs.
  • Autopay offers up to a 0.50% interest rate savings.
  • Offers student loan refinancing.
  • Accepts in-school payments.

Cons

  • Non-cosigned loans typically carry higher interest rates.
  • The loan amount is limited to the maximum of $150,000 or the cost of attendance, whichever is lower.

Citizens Bank’s fixed interest rates range from 4.99% to 13.29% APR, while variable interest rates range from 6.37% to 14.27% APR. Citizen account holders receive a 0.50% loyalty and autopay discount.

3. Best for applying with a co-signer: Sallie Mae Student Loan

  • Eligible borrowers

    Undergraduate and graduate students, borrowers seeking career training

  • Loan amounts

    $1,000 minimum; maximum up to cost of attendance

  • Loan terms

    Range from 10 to 15 years

  • Loan types

    Variable and fixed

  • Borrower protections

    Deferment and forbearance options available

  • Co-signer required?

    No

  • Offer student loan refinancing?

    No

Pros

  • High loan amount
  • You can select between variable and fixed rates.
  • Borrowers have hardship protection.
  • No co-signer is necessary.
  • Offers cosigner release.
  • There are no origination, application, or prepayment costs.
  • 0.25% interest rate reduction for autopay.
  • Accepts in-school payments.

Cons

  • Non-cosigned loans typically carry higher interest rates.
  • Does not provide student loan refinancing.

Sallie Mae’s fixed interest rates range from 4.50% to 15.49% APR, while variable interest rates range from 6.37% to 16.70% APR. Sign up for autopay and receive a 0.25% rate savings. Borrowers with a co-signer are likelier to get a cheaper interest rate from any private lender. Sallie Mae allows borrowers to eventually release their co-signer after graduating, making 12 on-time principal and interest payments, and meeting certain credit conditions.

4. Best for applying without a co-signer: Ascent® Funding

  • Eligible borrowers

    Qualifying undergraduate juniors and seniors, graduate students

  • Loan amounts

    Up to $200,000 for undergraduate and $400,000 for graduate loans

  • Loan terms

    Range from 5 to 15 years

  • Loan types

    Variable and fixed

  • Borrower protections

    Deferment and forbearance options available

  • Co-signer required?

    No

  • Offer student loan refinancing?

    No

Pros

  • Considers borrowers without credit.
  • High loan amount
  • You can select between variable and fixed rates.
  • Borrowers have hardship protection.
  • No co-signer is necessary.
  • Offers cosigner release.
  • There are no origination, application, or prepayment costs.
  • Autopay offers up to a 1% interest rate savings.
  • 1% cashback rewards
  • Accepts in-school payments.

Cons

  • Non-cosigned loans typically carry higher interest rates.
  • Does not provide student loan refinancing.

For non-cosigned student loans, Ascent provides fixed interest rates ranging from 13.05% to 15.04% APR and variable interest rates ranging from 13.27% to 15.18% APR.

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Any non-cosigned student loan will have a higher interest rate than a cosigned student loan, but Ascent’s rates are among the lowest for this type of loan, allowing students without a cosigner to qualify on their own. Sign up for autopay and receive up to a 1% rate savings.

5. Best for refinancing: SoFi

  • Eligible borrowers

    Undergraduate and graduate students, parents, health professionals

  • Loan amounts

    $5,000 minimum (or up to state); maximum up to cost of attendance

  • Loan terms

    Range from 5 to 15 years; up to 20 years for refinancing loans

  • Loan types

    Variable and fixed

  • Borrower protections

    Forbearance options like unemployment protection are available

  • Co-signer required?

    No

  • Offer student loan refinancing?

    Yes – click here for details

  • Offer parent loan?

    Yes – click here for details

Pros

  • High loan amount
  • You can select between variable and fixed rates.
  • Borrowers have hardship protection.
  • No co-signer is necessary.
  • There are no origination, application, or prepayment costs.
  • 0.25% interest rate reduction for autopay.
  • SoFi members receive career coaching, financial guidance from planners, and a 0.125% interest rate
  • discount on any additional SoFi lending product, including student loan refinancing.
  • Accepts in-school payments.

Cons

  • Non-cosigned loans typically carry higher interest rates.
  • There are no co-signer release options available.
  • Loan size minimum of $5,000.

SoFi offers fixed refinance interest rates ranging from 8.99% to 29.99% APR. Borrowers can refinance for cheaper interest rates and a new repayment term. Sign up for autopay and receive a 0.25% rate savings.

6. Custom Choice Undergraduate Student Loans

Regular Annual Percentage Rate (APR)

5.37% – 15.19% variable and 4.43% – 14.66% fixed

Recommended Credit

Undisclosed

Pros

  • There are no origination costs, prepayment penalties, or late fees.
  • Competitive APR.
  • Get your prices in just a few minutes.
  • Low loan minimum and graduation discount offered.

Cons

  • Credit check
  • May need a cosigner

Custom Choice offers comparably cheap rates when compared to other student loan lenders. The lender will also deduct 2% of your loan sum once you graduate.

Product Details

  • 2% principal decrease at graduation
  • We offer repayment terms of 7, 10, or 15 years.
  • Customer care is offered via phone, email, or ordinary mail.
  • Loan amounts are available. Loans start at $1,000 and have a lifetime borrowing limit of $180,000.
  • Repayment alternatives are available.
  • Deferred: There are no payments for up to six months after leaving school.
  • Interest only: Only pay the loan’s interest while in school and throughout the six-month grace period.
  • Flat payments: Pay $25 each month while attending school and during the grace period.
  • Immediate Repayment: Make full payments while still in school.
  • Loans are made by Citizens Bank, Member FDIC.

Why Custom Choice stands out: After graduation, your balance will be reduced. After you graduate, Custom Choice will provide you with a 2% decrease in your loan principal. This may not seem like much, but it will reduce the total cost of your loan.

What to watch out for: There is no mobile app. Custom Choice does not allow you to manage your loan while on the go.

7. Federal Direct Subsidized Loan

Regular Annual Percentage Rate (APR)

4.99% undergraduate

Fees

1.057% loan fee

Recommended Credit

Not applicable

Loan Amount Range

Up to $3,500 for first-year students, which increases every year you’re in school

Pros

  • Government pays interest while in school
  • Low interest rate
  • No credit check required
  • No cosigner needed

Cons

  • Low maximum loan amount
  • Eligibility based on financial need
Product Details

  • 10-year standard repayment term
  • Rates change annually
  • Loan maximum of $3,500 for first-years, $4,500 for second-years, and $5,500 per year for each school year after that

Why Direct Subsidized Loans Stand Out Subsidized loans are provided based on financial need, and the government pays the interest while you’re in school and for an additional six months after graduation. This implies you won’t pay interest until you’re on solid financial ground after school. The loans also provide some of the most competitive interest rates on the market.

Furthermore, federal loans qualify for certain protections, such as the federal repayment stop. They would also be eligible for massive loan forgiveness from the Biden administration, which is presently being contested in court.

Keep in mind that the maximum loan amount is limited. You can only borrow up to $23,000 in subsidized loans throughout your academic career. If you require more, you will have to seek another loan from a different lender.

8. Federal Direct Unsubsidized Loan

Regular Annual Percentage Rate (APR)

5.50% undergraduates and 7.05% graduate and professional students

Fees

1.057% loan fee

Recommended Credit

Not applicable

Loan Amount Range

Up to $5,500 for first-years, scales up each year you’re in school

Pros

  • Low interest rate
  • No credit check needed
  • No cosigner
  • Not based on financial need

Cons

  • Interest accrues while you’re in school
  • No variable loans

Product Details

  • 10-year standard repayment term
  • Rates are fixed, but new rates for each school year
  • Loan maximum of $5,500 for first-years, $6,500 for second-years, and $7,500 per year for each school year after that

What to look out for A maximum loan amount. You can borrow up to $31,000 in unsubsidized loans over your academic career, with a maximum of $23,000 in subsidized loans. If you require more, you will have to seek another loan from a different lender.

More about our top low-interest student loans

College Ave: College Ave has affordable interest rates with no application, origination, or prepayment costs. College Avenue also provides hardship protections like postponement, forbearance, and grace period choices. Borrowers with College Avenue student loans can begin repaying while still in school.

Eligible loans

Undergraduate and graduate loans, graduate health professions, and parent loans

Loan amounts

$1,000 minimum; maximum up to cost of attendance

Loan terms

5, 8, 10, 15 years; graduate loans up to 20 years

Citizens: Citizens Bank is the only brick-and-mortar bank on this list that provides reasonable student loan rates with no application, origination, or prepayment costs. Citizens Bank also provides hardship protections such as forbearance, and student loan debtors can begin repayment while still in school.

Eligible loans

Undergraduate and graduate loans, parent loans

Loan amounts

$150,000 maximum, or cost of attendance, whichever is lower

Loan terms

5, 10, 15 years

Sallie Mae: Sallie Mae’s interest rates are competitive compared to other private lenders. Borrowers can benefit from no origination, application, or prepayment fees. Borrower safeguards include deferral and forbearance. Sallie Mae allows applicants to start repaying their loans while still in school.

Eligible loans

Student loans for undergraduate and graduate studies, health professions, medical and dental residencies, bar study, and career training

Loan amounts

$1,000 minimum; maximum up to cost of attendance

Loan terms

10, 15 years

Ascent:  Ascent examines those who do not have established credit, as well as those who fulfill the minimum credit requirements but not the income or payback criteria. In certain circumstances, the lender considers additional factors such as the borrower’s school, program, graduation date, major, GPA, cost of attendance, and Satisfactory Academic Progress.

Ascent charges no penalties for early repayment of your loan, nor does it charge an origination or application fee. Ascent also offers perks such as 1% cash back on principal loan amounts at graduation, as well as deferment and forbearance choices for borrowers. Ascent student loan students can begin making payments while still in school.

Eligible loans

Undergraduate and graduate loans, health professions and PhD, and Master’s loans

Loan amounts

$2,001 minimum; maximum up to $200,000 for undergraduate loans; up to $400,000 for graduate loans

Loan terms

5, 7, 10, 12, 15, 20 years

SoFi: SoFi offers competitive refinancing rates, no application or origination fees, and no prepayment penalties. Borrowers can get unemployment benefits and other forbearance alternatives, as well as make student loan payments while still enrolled in school.

SoFi student loan debtors receive member perks such as premium vacation offers, tailored career coaching, financial planning from real-life counselors, and an unemployment protection program that temporarily modifies their loan payments

Eligible loans

Undergraduate and graduate loans, parent loans, health professions loans

Loan amounts

$5,000 minimum (or up to state); maximum up to cost of attendance

Loan terms

5, 7, 10, 15 years; refinancing loans up to 20 years

How to get a low-interest student loan with bad credit?

It’s tough to obtain a low-interest loan with terrible credit because banks and lenders typically charge higher rates to consumers with poor credit because they are viewed as larger risks. Your best bet is to check how much you can get in federal student loans, which have a single rate and do not consider borrowers’ credit scores. Federal student loans often have the lowest interest rates.

Which bank has the lowest interest rate for student loans?

Because student loan rates fluctuate and are advertised as a range, there is no one bank with the lowest rates. However, just a few (those on this list) offer rates that are comparable to one another. Just keep in mind that the rate you receive is determined by your Low-Interest financial situation, such as your credit score and salary.

Is it possible to get a lower rate in the future?

Refinancing your student loans allows you to acquire a cheaper interest rate in the future. Refinancing allows you to select a new loan term, and the higher your credit score, the cheaper your interest rate. To get started, refer to themoneymail Select’s list of the top student debt refinance companies.

What type of student loan has the lowest interest rate?

Federal student loans often have the lowest interest rates. These are issued by the United States Department of Education, and most students will be eligible for some form of government aid.

Can you negotiate a better interest rate on federal student loans?

No, federal student loan rates are fixed for each school year. Rates may vary from year to year.

What are three important factors to consider when taking out student loans?

How much do you truly need? The more you borrow, the higher the total cost of your loan.

Your interest rate. Your interest rate has a significant impact on the total cost of your loan. Borrowers with higher credit scores typically receive lower interest rates.

When payments begin, interest begins to accrue. Some lenders require immediate repayment, while others let you wait until a six-month grace period following graduation. Sometimes interest begins to accrue right away, while other loans do not collect interest until your grace period has expired.

Is it better to have a student loan with a higher interest rate or a lower one?

It is nearly always preferable to obtain a student loan with a lower interest rate because the overall cost of borrowing will be cheaper. However, there may be exceptions. For example, if your only option is a lower-rate loan with a shorter term duration, a loan with a higher interest rate and longer time to pay it off may give you a smaller payment that better fits your monthly budget.

Should I pay off my low-interest student loan?

If you are able, pay off any outstanding debts as quickly as feasible. This includes lower-interest student loans. If your resources are limited, prioritize paying off higher interest-rate debt first, such as credit cards.

Low-Interest Student Loan Provider Trustworthiness

We only chose private student loan lenders who had no public disputes in the previous three years. We also compared each institution’s Better Business Bureau rating.

The Better Corporate Bureau (BBB), a non-profit organization dedicated to consumer protection and trust, rates businesses based on their responses to customer complaints, honesty in advertising, and transparency in corporate procedures. Here are the scores for each company:

lenders B grade
Department of Education N/A
Earnest A+
SoFi A+
College Ave A+
Custom Choice N/A
Sallie Mae A+

Only the Department of Education and Customs Choice are currently rated as A+ or higher by the Better Business Bureau. Government entities are not rated by the Better Business Bureau, and neither is Custom Choice. However, this does not necessarily indicate the lenders’ trustworthiness, and you should inquire about others’ experiences with the businesses before determining whether to borrow from them.

In Conclusion

The lowest-interest student loans are primarily government loans, but if you require additional financing, the private lenders on this list have some of the best rates. The rest depends on your credit and money to decide the exact rate you receive. Shop around to see what you can prequalify for without affecting your credit score.

 

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