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5 Ways to Lower Your Student Loan Interest in 2023

March 20, 2023

A high interest rate on your student loans can cost you thousands in interest and keep you in debt for longer. If you’re one of the millions of Americans with student loan debt, lowering your interest rate can help mitigate these issues. You can take advantage of several ways to lower that rate, getting yourself out of debt faster and with more money in your pocket.

Utilize Discounts

One of the fastest and easiest ways to lower your student loan interest is to look for discounts. Many lenders offer an autopay discount. To qualify, you’ll need to sign up for automatic withdrawals from your bank account. In return, most lenders offer at least a 0.25% interest rate reduction. Some even offer up to 0.50%.

Beyond autopay, some lenders provide discounts for loyalty. If you have additional accounts with your lender, like a checking account or personal loan, ask if this qualifies you for any savings.

Even if you don’t have an existing account, ask if there are any discounts you qualify for. Many offer unique programs related to good grades or completing your degree. Some even reward you for paying on time if you have a track record of consistent payments.

Compare Student Loan Offers on Credible

Negotiate with Your Lender

In some cases, you may be able to negotiate a lower rate. While you can’t negotiate rates on federal student loans, private lenders are generally open to it. It’s best to negotiate when you’ve improved your creditworthiness in some way. That includes raising your credit score, paying down debt, and increasing your income.

If you want to negotiate with your lender, you could benefit from shopping around for a refinance first. By doing so, you can use lower interest rate offers from other lenders as leverage. Although there’s no guarantee, your current lender might be willing to lower your interest rate to keep you as a customer.

Compare Student Loan Offers on Credible

Raise Your Credit Score

Whether you’re planning on negotiating or refinancing, your credit score will come into play. The lowest and best rates are usually given to borrowers with good to excellent credit. That means you need a credit score ranging from 740 to 850 to get those great rates.

Still, some lenders accept lower credit scores, so don’t let this stop you from refinancing. For example, Splash Financial accepts credit scores as low as 640.


Refinancing is the most effective way to lower your interest rate, but it also requires the most effort. With that said, most online lenders make application easy. For example, Credible is a marketplace that allows you to shop multiple lenders at once. It also has easy import tools that make uploading documentation simple.

When you refinance, you get a new loan to pay off your old loan. The new loan should have lower interest rates and potentially better terms. Keep in mind that even with a lower interest rate, your monthly payments could be higher if you choose a shorter term. They will be lower if you choose a longer term. A short term means you’ll pay less in interest overall, while a long term means you’ll have more flexibility in your budget each month.

You generally need a good credit score and stable income to refinance. If you don’t meet those requirements, you could ask a parent or trusted individual with good credit to cosign the loan. Even though you might not have the best financial situation, adding a cosigner lowers your risk and can get you a lower interest rate. Many lenders offer a cosigner release after you meet certain criteria.

You may also choose to get a variable interest rate when refinancing. Variable interest rates provide you with a lower interest rate for a set period at the start of the loan. After this period, your interest rate can go up or down. This tactic is best if you have the means to pay off the loan within that initial fixed interest rate period.

Compare Student Loan Offers on Credible

Choose Your Loan Carefully

Whether you’re getting student loans for the first time or refinancing, it’s important to shop around with multiple lenders for the lowest interest rate. Checking for discounts before you apply can save you money in the long run.

Some lenders can save you money in other ways. For example, Earnest requires no application, origination, or disbursement fees. While some lenders penalize you for paying off your loan early, Earnest does not.


Ultimately, lowering your student loan interest will depend on what type of loan you have and your financial situation. Whatever means you choose, you could save thousands, and even tens of thousands, over the lifetime of your loan. It can even help you pay off the loan faster, bettering your financial situation and keeping more of your money in your hands.

Compare Student Loan Refinancing Offers on Credible


What is a good interest rate for a student loan?

Private student loan interest rates currently average between 4.12% to 5.72%. A good rate would be within that range or lower. Federal student loan interest rates are predetermined and range from 3.73% to 6.28%, depending on what type of loan you get. However, it’s important to note that many factors go into your interest rate, including your choice of lender and loan type.

Can student loan interest be negotiated?

Yes. While there’s no guarantee, lenders will sometimes negotiate with you to lower your interest rate if you’re struggling to make your monthly payments. They may also offer a lowered interest rate if you get lower offers from other lenders to refinance. As a first step, you can compare multiple student loan refinancing offers on Credible.

Is it bad to pay off student loans too fast?

No. While other loans do sometimes have prepayment penalties, federal law prohibits lenders from penalizing you for paying off your student loan early. However, you may want to consider your other financial circumstances. For example, if you have credit card debt, you might benefit from paying that off first as credit cards tend to have higher interest rates.

Ginny Dorn
Written by
Ginny Dorn is a freelance personal finance writer. She specializes in credit card debt, personal loans, and mortgages. She graduated from Western Illinois University with a bachelor's degree in family and consumer sciences.