Finance

Private student loan interest rates rise for 5-year terms and dip for 10-year terms

Published

8 months ago

September 25, 2024

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

The latest private student loan interest rates from the Credible marketplace, updated weekly. (iStock)

During the week of Sept. 16, 2024, average private student loan rates spiked for borrowers with credit scores of 720 or higher who used the Credible marketplace to take out 5-year variable-rate loans and dropped for 10-year fixed-rate loans.

10-year fixed rate: 7.99%, down from 8.57% the week before, -0.58
5-year variable rate: 10.31%, up from 8.61% the week before, +1.70

Through Credible, you can compare private student loan rates from multiple lenders.

For 10-year fixed private student loans, interest rates dropped by 0.58 percentage points, while 5-year variable student loan interest increased by 1.70 percentage points.

Borrowers with good credit may find a lower rate with a private student loan than with some federal loans. For the 2024-25 academic school year, federal student loan rates will range from 6.53% to 9.08%. Private student loan rates for borrowers with good-to-excellent credit can be lower right now.

Because federal loans come with certain benefits, like access to income-driven repayment plans, you should always exhaust federal student loan options first before turning to private student loans to cover any funding gaps. Private lenders such as banks, credit unions, and online lenders provide private student loans. You can use private loans to pay for education costs and living expenses, which might not be covered by your federal education loans.

Interest rates and terms on private student loans can vary depending on your financial situation, credit history, and the lender you choose.

Private student loan rates (graduate and undergraduate)

Who sets federal and private interest rates?

Congress sets federal student loan interest rates each year. These fixed interest rates depend on the type of federal loan you take out, your dependency status and your year in school.

Private student loan interest rates can be fixed or variable and depend on your credit, repayment term and other factors. As a general rule, the better your credit score, the lower your interest rate is likely to be.

You can compare rates from multiple student loan lenders using Credible.

How does student loan interest work?

An interest rate is a percentage of the loan periodically tacked onto your balance — essentially the cost of borrowing money. Interest is one way lenders can make money from loans. Your monthly payment often pays interest first, with the rest going to the amount you initially borrowed (the principal).

Getting a low interest rate could help you save money over the life of the loan and pay off your debt faster.

What is a fixed- vs. variable-rate loan?

Here’s the difference between a fixed and variable rate:

With a fixed rate, your monthly payment amount will stay the same over the course of your loan term.
With a variable rate, your payments might rise or fall based on changing interest rates.

Comparison shopping for private student loan rates is easy when you use Credible.

Calculate your savings

Using a student loan interest calculator will help you estimate your monthly payments and the total amount you’ll owe over the life of your federal or private student loans.

Once you enter your information, you’ll be able to see what your estimated monthly payment will be, the total you’ll pay in interest over the life of the loan and the total amount you’ll pay back.

About Credible

Credible is a multi-lender marketplace that empowers consumers to discover financial products that are the best fit for their unique circumstances. Credible’s integrations with leading lenders and credit bureaus allow consumers to quickly compare accurate, personalized loan options – without putting their personal information at risk or affecting their credit score. The Credible marketplace provides an unrivaled customer experience, as reflected by over 7,700 positive Trustpilot reviews and a TrustScore of 4.8/5.

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Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

24 hours ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”