8 Best Student Loans with the Lowest Interest Rates in 2023

There are two main types of low-rate loans including federal loan options and private student loans.

Federal Student Loans

Federal student loans are provided by the U.S. Department of Education and they have the lowest interest rates along with flexible repayment options. To qualify for these loans a student must complete the free application for federal student aid also known as FAFSA. 

There are four types of federal loans:

Direct Subsidized Loans

To be eligible for a direct subsidized loan, you must be enrolled in college at least half of the time. These loans are provided to the student after assessment of their financial need and the interest rate is subsidized to make the repayment easier. The interest is only charged after graduation and the student gets an additional 6 months grace period as well. In case of deferment, you will not be charged interest for that time. 

Direct Unsubsidized Loans

These loans do not need to assess the financial needs of the student and therefore have a fixed interest rate that starts as soon as the funds are allocated and continue till the loan is paid in full. Unsubsidized loans however still have flexibility in repayment.

Direct PLUS Loans

Direct Plus loans are provided to the parents and caregivers of students. These also have fixed interest rates with flexible repayment options. The parents do not have to pass a credit check and can defer the loan till the student graduates. Direct Plus loans are also available for graduate and professional students. 

Direct Consolidation Loans

For multiple federal student loans, the government can offer a single loan with fixed interest rates to pay off the other loans. This helps in getting debt sorted and provides the students a better debt ratio.

Private Student Loans

Private student loans are provided by banks and other lending institutions. The borrower of private loans must pass a credit check and prove their creditworthiness. These loans usually have a higher interest rate but you can borrow a bigger loan amount.  

That said, if you have exhausted all the federal loan options given above, you can still find student loans with low interest rates. Continue reading to understand the criteria you must meet to get the lowest interest rates from lending institutions.

Lender	Scholaroorating	Our view	Fixed ratesstarting (APR)	Variable ratesstarting (APR)	Learn more
Sallie Mae Visit website	4.9/5	A trusted lender with great offers	4.50%	4.62%	Visit website
College Ave Visit website	5/5	The best for low interest student loans	3.99%	3.99%	Visit website
Earnest Visit website	5/5	The best for low interest student loans	3.99%	3.99%	Visit website
Ascent Visit website	4.8/5	Great for loans without cosigners.	4.62%	4.72%	Visit website
Sofi Visit website	4.8/5	Great lender for private student loans.	4.99%	4.49%	Visit website
Discover Visit website	4.5/5	Best lender with zero fees and valuable rewards	5.49%	5.87%	Visit website
Citizens Bank Visit website	4/5	Great for multi-year approval	4.99%	5.10%	Visit website
PNC Bank Visit website	3/5	Best for auto-pay interest rate discounts	4.49%	5.64%	Visit website

The following are details on the best private student loan options with the lowest interest rates. However, most lenders do require the borrower to be creditworthy for offering them the lowest interest rate.

Sallie Mae is one of the most popular lending institutions and is considered to be the largest loan provider in the country. For students, Sallie Mae offers multiple different types of loans including undergraduate, graduate, career training, medical school loans, and many more, as well as also offering credit cards and saving accounts.

Loans by Sallie Mae can be easily applied for through a cosigner and provide discounts for fixed payment schedules.

Pros of Sallie Mae:

• No origination fees

• 100% school attendance costs covered

• Discounts for fixed payment schedules

• Easy repayment options

• Needs a cosigner

Cons of Sallie Mae:

• They will conduct a credit check

Eligibility Requirements:

• Verified school admission halftime or more

• Must be a U.S. citizen or permanent resident

• Should have a minimum credit score (undisclosed)

Repayment Details:

• Fixed and variable repayment options available

• Cosigner can be released after 12 regular payments

• Deferment options available for undergraduate and graduate borrowers

• Repayment terms 5-15 years

College Ave provides many loan options that are flexible and has the lowest APR rates. Students can choose from various repayment options, along with coverage of 90% of their school costs. You also have the flexibility to choose additional loans with a cosigner, giving you a multi-year peace of mind. 

You can easily calculate the terms and your payments on their website, making it easier for you to see everything in one go. 

Pros of College Ave:

• Lowest APR rates
• Multi-year additional loans are available
• Coverage for up to 100% cost of attendance
• Flexible repayment terms
• No origination fees

Cons of College Ave:

• Cosigner release is not possible until half of the loan payments are complete

Eligibility requirements:

• Need a cosigner
• Must be a U.S. citizen or permanent resident
• School verification

Repayment terms:

• You can start repaying your principal interest from the beginning
• Loan term can be 5-15 years
• Deferment options available
• Cosigner release only possible after half of loan payments are done

Students can get good loan options with flexible terms of repayment through Earnest without worrying about additional fees. Earnest does not charge any fee for the origination, application, or early closure of the loans. It provides good APR rates and a choice of variable or fixed interest rates. 

You can check their website and find out eligibility in a few minutes. 

Pros of Earnest loans:

• No fees at any point of the loan
• 9 months grace period
• Discount on fixed payments
• Flexible loan repayment terms

Cons of Earnest loans:

• Cosigner has to complete the loan term

Eligibility requirements:

• Should have a minimum credit score of 650
• Must be a U.S. citizen or permanent resident
• All States except Washington DC and Nevada

Repayment terms:

• 9 months grace period
• Start paying principal interest from start
• Loan term 5-15 years
• No cosigner release

Ascent is a popular choice for students as its options include a non-cosigned loan and a loan based on future income. 

Ascent also offers deferment options and flexible repayment plans. It provides a 9-month grace period after graduation making it easier for the students to start repaying their loans. 

Pros of Ascent:

• Apply for loans without a cosigner
• 9 months grace period
• Flexible repayment options
• Deferment options available

Cons of Ascent:

• Loan amounts have limitations 

Eligibility requirements:

• Minimum credit score 540
• School verification
• Must be a U.S citizen or permanent resident

Repayment terms:

• Cosigner release after 24 regular payments
• 9 months grace period
• Loan terms 5-15 years

SoFi is a leading provider of student loans that covers federal and private loans. SoFi also provides various other banking services including credit card, mortgage and auto financing. 

SoFi members can gain access to exclusive deals and discounts, financial advice, flexible repayment plans and more. 

Pros of SoFi loans:

• Many member benefits
• Financial planning & advice
• Special discounts for a cosigner that is also SoFi member
• Flexible plans

Cons of SoFi loans:

• Minimum loan amount required

Eligibility requirements:

• Must be enrolled in a degree-awarding eligible school
• No minimum income requirement
• All 50 states covered

Repayment terms:

• Cosigner release after 24 regular payments
• 6-month grace period
• Fixed monthly payments of $25 

Discover offers multiple private student loan options available to undergraduates, graduates, health professionals, MBA students, Law students, bar exam, and to students in residency. They also have options for parents and other creditworthy individuals. They do not charge late fees on their private student loans and provide further interest rate discounts based on certain conditions. For example, those registered for auto pay can receive a 0.25% rate reduction.

Pros of Discover Loans:

• No origin fee, late fee, or application fee
• Cash rewards for good grades
• Covers up to 100% of school-certified college costs
• 0.25% rate reduction with auto pay
• Various economic hardships and repayment options
• International students can qualify with a co-signer who is a U.S. citizen or a permanent resident
• Multi-year option available

Cons of Discover Loans:

• No cosigner release program

Eligibility Requirements:

• Must be a U.S. citizen or permanent resident, or have a cosigner that is one
• Seeking an undergraduate or graduate degree
• Enrolled at least half-time in a degree program at an eligible school
• Must be making satisfactory academic progress
• Be 16 years or older when applying
• Pass a credit check (minimum limit undisclosed)

Repayment Details:

• Fixed and variable repayment options available
• Deferment options available
• Repayment term 15 years
• Interest-only payments during school and grace period

Citizens Bank provides private student loans to undergraduates pursuing bachelor’s degrees, graduate students, and parents. They offer good rates to creditworthy individuals along with a further discount of 0.25% if the borrower or cosigner has an existing account with the bank. Citizens Bank has a multi-year approval system too where borrowers do not require a hard credit check for future loans.

Pros of Citizens Bank Loans:

• Multi-year approval
• International students can qualify with a cosigner who is a U.S. citizen or permanent resident
• 0.25% loyalty discount

Cons of Citizens Bank Loans:

• Maximum limit of $150,000 for undergraduate loans
• No firm deferment or forbearance policies
• Charges late fee and returned payment fee
• Minimum credit required
• No soft credit checks available

Eligibility Requirements:

• Must be a U.S. citizen or permanent resident or have a cosigner that is one
• Borrowers must be enrolled at least half time
• No prior student loan defaults
• Must be the age of majority otherwise needs a cosigner that is
• Must be credit-worthy (minimum score undefined)

Repayment Details:

• Fixed and variable repayment options available
• Repayment terms 5, 10, 15 years

PNC Bank offers multiple private student loan options with low-interest rates for undergraduates, graduates, and professionals. They offer a further discount of 0.50% on the rates if you enroll in automatic payments. PNC gives their borrowers various refinancing and forbearance options too. The loan modification with PNC can also help you to lower the rates and monthly payments charged on your loan.

Pros of PNC Bank Loans:

• No origin or application fee
• 0.50% discount with auto pay
• Customizable payment plans
• Cosigner release
• Scholarships available

Cons of PNC Bank Loans:

• Requires credit approval
• Requires a hard credit check
• Cosigner release available after 48 months of consecutive timely payments
• International students cannot apply

Eligibility Requirements:

• Both student and cosigner (if any) must be a U.S. citizen or permanent resident
• Enrolled at least half-time in a degree or certificate program
• Satisfactory credit history

Repayment Details:

• Fixed and variable repayment options available
• Refinancing and forbearance available
• Customizable payment plans
• Loan terms 5, 10, 15 years
• Interest-only payments while in school
• Deferred payments start after 6 months of graduation

There various are factors that can contribute to getting a lower interest rate on a student loan. Consider taking the following steps:

Lending institutions provide better interest rates and repayment options to borrowers with good credit. You can start building your credit with easy steps like a prepaid credit card and paying your existing loan payments on time. When you have a good credit score lenders provide loan options with lowest interest rates.

Reducing your overall debit load really helps in getting good loan options. Lenders always evaluate your credit, and your overall debt burden, and compare it to your income. If your debit burden is low, that means you are able to maintain regular loan payments without being a high risk. Consider paying off your debt load at least 2-3 months prior to applying for a new loan. This helps in improving your credit score and debt-to-income ratio.

A cosigner or a guarantor can bring their good credit score to your loan application. Commonly student loans are cosigned by the parents and they bear the full responsibility of paying off the loan. This can help in getting lower interest rates from lenders. Loans can also be cosigned by other relatives and grandparents.

A short term loan is less riskier and gets lower interest rates compared to a long term loan. If you are able to pay off larger monthly payments, a short term loan will not only get you better rates but you will also benefit from paying interest for a shorter time period.

Before signing up with a lender, you should review different institutions and do detailed comparisons. Some lenders may offer you special student discounts which will help in getting a better loan deal. Study the lenders and their reviews before making a final decision.

Which type of student loan has the lowest interest rates?

The subsidized federal student loans provide fixed interest rates that are lower than other lending institutions. To receive better interest rates on private student loans, we recommend building good credit and having a cosigner.

Do I need a cosigner for student loans?

Some banks and lending institutions require a cosigner for student loans. Sallie Mae is one of the top leading loan providers in the country and requires a cosigner that can be released after 12 regular payments. Cosigners can be parents, grandparents or other relatives. However, not all lenders require a cosigner. Ascent is among the lenders offering student loans without a cosigner.

Which bank gives the lowest interest rates on student loans?

Based on our research, College Ave offers the lowest interest rates and better repayment options than other banks and lending institutions. You can review our comparison table and detailed review of lenders to understand which options work best for you.