If you need to take out a private student loan to cover the gap after exhausting federal financial aid, the key is securing the lowest interest rate possible. Not only can a low rate save you thousands of dollars over the life of your loan, but, with a lower rate, more of your monthly payment can go toward your principal instead of interest.
Your credit score plays one of the biggest roles in the rate you’ll qualify for, but it’s not the only factor lenders consider. Here’s how to improve your chances of getting a low-rate student loan.
How to secure a low-rate student loan
Shop around
Don’t settle for the first loan offer you receive. Interest rates, fees, repayment terms and borrower benefits can vary significantly from one lender to the next.
Many private student loan lenders let you prequalify by providing some basic personal and financial information. Prequalification gives you an estimate of the interest rate and loan terms you may qualify for without requiring a hard credit inquiry, so it typically won’t affect your credit score.
Credible is an online marketplace that lets you compare rates from top student loan lenders with no impact to your credit. Borrowers can compare lenders for private and graduate student loans, as well as loans for medical school and law school.
Credible® Student Loans
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Eligible borrowers
Undergraduate and graduate students, parents
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Loan amounts
Amount varies by individual lender
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Loan terms
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Loan types
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Borrower protections
Amount varies by individual lender
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Co-signer required?
Varies by individual lender
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Offer student loan refinancing?
Pros
- Lets you compare offers from multiple lenders
- None of the lenders on Credible charge origination fees or prepayment penalties
- Can check prequalified rates with lenders for free without a hard credit check
Cons
- Doesn’t directly underwrite loans, so you’ll have to do some comparison shopping
Once you’ve compared offers from several lenders, you can move forward with the one that provides the lowest rate and the loan features that best fit your needs, such as flexible repayment options or the ability to release a co-signer later on.
Apply with good credit
Your credit score is one of the biggest factors private student lenders use to determine the interest rate you’ll receive. In general, borrowers with higher credit scores qualify for lower interest rates, while those with lower scores are more likely to be offered higher rates. Even a small difference in your interest rate can add up to hundreds or thousands of dollars in additional borrowing costs over the life of your loan.
If you have time before you need to apply, consider taking steps to improve your credit score first. Payment history is the largest factor in your FICO® Score, so make every bill payment on time and in full. It’s also a good idea to avoid applying for multiple new credit accounts in a short period of time, as hard inquiries and new debt can temporarily lower your score.
While you’ll get a better private student loan rate if you have good credit — or have a co-signer that does (more on this below) — having bad credit doesn’t totally put borrowing off the table. For example, Funding U uses criteria besides credit to approve applicants, including GPA, estimated graduation rate and employment experience. There’s also a 0.5% rate discount when signing up for autopay.
- Considers borrowers’ earning potential
- Borrowers have hardship protections
- No co-signer required
- No fee for paying off loan early
- 0.5% interest rate discount for making interest-only payments in school
- Loan officer assigned to each borrower for hands-on help
- Promises an approval decision in just minutes
- Only fixed-rate loans
- Not available in every U.S. state
- Non-cosigned loans tend to charge higher interest rates
Have a co-signer help you out
If you don’t have enough time to whip your credit score into shape, consider getting a co-signer. Many private student loan lenders let you apply with a co-signer since borrowers may be going into their loan with little or no credit history. A co-signer can help you qualify for more favorable loan terms, like lower interest rates, if they have a better credit profile than you do. Choose your co-signer carefully and make sure they fully understand what you’re asking them to do, since they’ll become financially responsible for repaying your loan if you default on it.
For those considering adding a co-signer, look for lenders that offer early co-signer release. This kind of term lets your co-signers off the hook after you’ve made a certain number of repayments. Edly, for example, offers some of the fastest co-signer release terms out there after just six consecutive, in-full qualifying payments. Sallie Mae offers co-signer release after 12 consecutive, principal and interest payments.
Edly Student Loans
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Eligible borrowers
Qualifying juniors, seniors and graduate students
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Loan amounts
$2,000 up to $15,000 per academic year and up to $10,000 for summer terms; ($20,000 lifetime limit)
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Loan terms
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Loan types
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Borrower protections
Deferment and forbearance; all loans are based on income-based repayment
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Co-signer required?
Pros
- Considers borrowers’ schooling and programs
- All loan payments are income-based
- Hardship protections available
- No co-signer required
- Student success team and career counselors available for support
Cons
- Only 7-year loan terms
- Only variable-rate loans
- Not available in every state
- Non-cosigned loans tend to charge higher interest rates
- Loans available to part-time and continuing ed students
- Co-signer release after just 12 payments
- No origination fee
- Offers loans for a wide variety of educational needs including: bar study, medical school, residency and relocation costs, dental school, residency and relocation costs, nursing school/health professions, commercial flight school, coding boot camp and professional certifications
- No student loan refinancing
- Doesn’t offer parent loans
- Hard credit check to prequalify
- Late payment fee
Sign up for autopay
Enrolling in autopay can lower your student loan interest rate while helping you avoid missed payments. With autopay, your monthly payment is automatically deducted from your linked bank account, reducing the risk of late or missed payments. In return, many lenders offer a small interest rate discount, typically 0.25%.
Some lenders offer an even bigger break. For example, Ascent borrowers may qualify for up to a 1.00% interest rate reduction by enrolling in autopay, depending on their loan terms.
- Considers borrowers with no credit
- High loan limit
- Co-signer release available after just 12 payments
- Up to 1% interest rate discount for autopay*
- 1% cash back rewards*
- Considers alternative requirements like the borrower’s school, program, graduation date, major, GPA, cost of attendance and Satisfactory Academic Progress (SAP) to grant approval
- Maximum fixed APR is on the high side
- Doesn’t offer student loan refinancing
Disclosure: *Ascent Funding, LLC products are made available through Bank of Lake Mills or DR Bank, each Member FDIC. Subject to credit approval. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent’s Terms and Conditions please visit AscentFunding.com/Ts&Cs. Annual Percentage Rates (APRs) displayed above are effective as of 7/15/2026 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments. Loans subject to individual approval, restrictions and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions. The final amount approved depends on the borrower’s credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation.1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers that agree to the AscentUP Terms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.
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