Best Student Loan Rates of March 2024

Author
Grace Lemire
Grace Lemire
author

Grace Lemire is a freelance writer and editor with over five years of experience in the personal finance industry. She has been featured on a variety of publications, including NPR, CNN, FinanceBuzz, Dollar Geek, Pangea, and True Finance. Her work focuses on the intersection of personal finance and technology. In 2023, Grace was nominated for the Best Personal Finance Advice award in Debt.com’s FinTok Awards.

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Edited by
Daniel Kahn
Daniel Kahn
editor
Daniel is the co-founder and COO at Sparrow. Daniel is responsible for the day-to-day operations of a company, working closely with other members of the executive team to develop and implement strategies to support the growth and success of the company.
Daniel was a 2023 Forbes 30 Under 30 lister in the Education category.  Daniel was born and raised in Raleigh, North Carolina and graduated from Duke University in 2020.
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Reviewed by
Camden Ford
Camden Ford
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Camden leads Sparrow’s business operations – everything from product management to business analytics. After graduating Cum Laude from Duke University where he studied Civil Engineering, Camden worked as a Consultant for A.T. Kearney where he worked in their Strategic Operations practice. With a strong background in analytics, Camden strives to deliver data-driven conclusions and insights.

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Updated
March 11, 2024
On a similar note

Best Private Student Loans of 2024

November 14 · 20 min read

Student loans serve as a valuable resource to bridge financial gaps when scholarships, grants, and other forms of aid fall short. However, it’s important to note that student loans come with a cost. In addition to repaying the principal balance (the initial borrowed amount), student loans also accrue interest. These interest rates play a crucial role in determining the total amount owed and significantly impact monthly payments. Before committing to a loan, compare interest rates to ensure that your debt will be manageable after graduation.

Below we’ve listed our top-rated student loan options with the lowest advertised interest rates. Keep in mind that only the most creditworthy borrowers will receive the lowest rates available, and that variable rates can increase in the future.

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Best Student Loan Rates of March 2024

Arkansas Student Loan Authority (ASLA) – Both undergraduate and graduate degrees

Best for: Residents of, or students in, Arkansas.

Ascent – Both undergraduate and graduate degrees

Best for: International and DACA students who have a lower credit score.

Brazos – Both undergraduate and graduate degrees

Best for: Residents of, or student in, Texas.

College Ave – Both undergraduate and graduate degrees

Best for: Borrowers looking for a repayment term that matches their budget.

Custom Choice – Both undergraduate and graduate degrees

Best for: Borrowers who want a competitive interest rate and strong borrower benefits.

Earnest – Both undergraduate and graduate degrees

Best for: Borrowers who want a competitive interest rate and flexible repayment options.

Edly – Both undergraduate and graduate degrees

Best for: Borrowers who want an income-based repayment (IBR) loan.

EdvestinU – Both undergraduate and graduate degrees

Best for: Borrowers who want to work with a nonprofit that offers flexible repayment plans.

Funding U – Undergraduate degrees only

Best for: Borrowers that were high-achieving undergraduate students.

INvestED – Both undergraduate and graduate degrees

Best for: Borrowers who are residents of or students in Indiana.

LendKey – Both undergraduate and graduate degrees

Best for: Borrowers that want to work with a credit union or community bank.

MPOWER – Both undergraduate and graduate degrees

Best for: International and DACA borrowers without a cosigner.

Nelnet Bank – Both undergraduate and graduate degrees

Best for: Borrowers who want competitive interest rates and a flexible forbearance policy.

Prodigy Finance – Graduate degrees only

Best for: International student borrowers with no cosigner.

Sallie Mae – Both undergraduate and graduate degrees

Best for: Borrowers who want competitive interest rates and a flexible repayment plan.

SoFi – Both undergraduate and graduate degrees

Best for: Borrowers with a strong credit score or a creditworthy cosigner.

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What is a Good Interest Rate?

Interest rates will vary significantly based on the lender and type of loan. So, there really isn’t a specific threshold of what is considered a “good” interest rate. Generally speaking, however, an interest rate at or above 10% is considered very high, while interest rates less than 7% are on the lower end.

Across all student loans, 5.8% is the average interest rate. Use the average interest rate as a marker when determining if the interest rate offered to you is good.

Key Considerations Beyond Interest Rates

While the interest rate on your student loan is an incredibly important factor, it is only one piece of a much more complex puzzle. When selecting a student loan, you should also consider factors such as whether the interest rate is fixed or variable, the repayment period, and the projected monthly payment.

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Choosing the Right Rate Type

A fixed interest rate will remain the same throughout the life of the loan, while a variable interest rate is subject to change due to market conditions. So, if you borrowed a loan with a 5% fixed interest rate, it would remain at a 5% interest rate up until the day you pay it off. On the other hand, if you borrowed a loan with a variable interest rate starting at 5%, the rate could fluctuate up and down throughout the life of the loan.

There are pros and cons to both fixed and variable rate loans. Select the option you feel most comfortable with.

Repayment Period

Generally speaking, the longer the repayment period, the more you will pay over the life of the loan. Consider the repayment periods offered to you and how they will impact what you pay throughout repayment.

Interest Rate

5%

5%

Repayment Period

10 years

15 years

Monthly Payment

$318

$237

Total Paid

$38,184

$42,703

With a shorter repayment period, you will have larger monthly payments. However, if you’re able to afford them, a shorter repayment period can save you quite a bit over the life of the loan.

Projected Monthly Payment

During repayment, you will be required to make at least the minimum monthly payment on your loan. As illustrated by the table above, the monthly payment will change based on the repayment period and interest rate you have.

Some private student lenders may only offer one or two repayment periods. Before agreeing to a student loan, consider the projected monthly payment amount. If the amount does not seem feasible for you given your projected monthly income after graduation, you may want to explore other student loan options.

How to Find the Best Student Loan Rate

Before agreeing to any loan, it’s important to do your research. To simplify the search process, we built Sparrow.

Rather than hopping from site to site comparing loans one by one, Sparrow allows you to compare personalized, pre-qualified student loan rates from 15+ lenders in one form. To find the best student loan rate for you, start the process with Sparrow.

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

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