Best Student Loans for College with Low Interest Rates
Best Student Loans for College with Low Interest Rates in 2025
Introduction
Best Student Loans for College with Low Interest Rates | Paying for college is a challenge for many students, and unless you have a full-ride scholarship, chances are you’ll need financial aid. Student loans are a common solution, but not all loans are created equal. The interest rate on your loan plays a crucial role in how much you’ll end up paying over time.
If you’re looking for the best student loans with low interest rates, you’ve come to the right place. This guide will walk you through the top loan options, including federal and private loans, so you can borrow wisely and save money in the long run.
Why Interest Rates Matter on Student Loans
The interest rate on your student loan determines how much extra you pay beyond the original loan amount. The lower the interest rate, the less money you owe over time.
For example:
- A $30,000 loan at 6% interest costs about $6,000 more in interest over 10 years.
- The same loan at 3% interest would only cost about $4,000 in interest.
That’s a $2,000+ difference, just because of the interest rate! Choosing the right loan can save you thousands in the long run.
Best Student Loans with Low Interest Rates in 2025
Let’s dive into the best low-interest student loans available this year.
1. Federal Direct Subsidized Loans (Best for Undergraduate Students)
✅ Interest Rate: 5.50% (for 2024-2025 school year)
✅ Loan Limit: $3,500 – $5,500 per year
✅ Key Benefit: The government pays the interest while you’re in school
Federal subsidized loans are the best option for undergraduate students because the government covers your interest while you’re enrolled at least half-time. This means less debt after graduation.
💡 Who should apply? Students with financial need pursuing a bachelor’s degree.
2. Federal Direct Unsubsidized Loans (Best for All Students)
✅ Interest Rate: 5.50% (undergrad) / 7.05% (graduate)
✅ Loan Limit: $5,500 – $20,500 per year
✅ Key Benefit: No credit check required
Unlike subsidized loans, unsubsidized loans start accruing interest immediately. However, they still offer low fixed rates and flexible repayment options.
💡 Who should apply? Any student, regardless of financial need, looking for a reliable, low-interest loan.
3. Federal Direct PLUS Loans (Best for Graduate Students & Parents)
✅ Interest Rate: 8.05%
✅ Loan Limit: Up to the cost of attendance
✅ Key Benefit: Covers full tuition costs
If you’re a graduate student or a parent looking to borrow for your child’s education, PLUS loans can be a good option. While the interest rate is higher than other federal loans, they still have better terms than private loans.
💡 Who should apply? Graduate students and parents of undergrads who need to borrow more than standard federal loans allow.
4. Ascent Student Loans (Best Private Loan with Low Rates & No Cosigner Option)
✅ Interest Rate: 4.62% – 16.46% (fixed)
✅ Loan Limit: Up to $400,000
✅ Key Benefit: No cosigner needed for some borrowers
Ascent is a great option for students without a cosigner. They offer competitive rates and generous borrowing limits, making them one of the best private loan providers.
💡 Who should apply? Students who don’t have a cosigner and need a private loan with low rates.
5. Discover Student Loans (Best for Cash Rewards & No Fees)
✅ Interest Rate: 4.99% – 14.99% (fixed)
✅ Loan Limit: Up to 100% of school-certified costs
✅ Key Benefit: 1% cash reward for good grades
Discover is a well-known name in banking, and their student loans come with no fees, competitive rates, and even a cash-back reward if you maintain good grades.
💡 Who should apply? Students looking for private loans with extra perks and no hidden fees.
6. Earnest Student Loans (Best for Flexible Repayment & Low APR)
✅ Interest Rate: 4.45% – 15.90% (fixed)
✅ Loan Limit: Up to 100% of education costs
✅ Key Benefit: 9-month grace period before repayment starts
Earnest offers one of the longest grace periods before repayment begins, giving graduates more time to find a job and save money. They also allow borrowers to customize their repayment terms.
💡 Who should apply? Students looking for low interest rates and flexible repayment options.
7. Sallie Mae Student Loans (Best for Part-Time Students & Fast Approval)
✅ Interest Rate: 4.50% – 15.49% (fixed)
✅ Loan Limit: Up to 100% of college costs
✅ Key Benefit: Loans available to part-time students
Most private lenders require students to be enrolled full-time, but Sallie Mae offers loans to part-time students as well. They also have fast approval times, making them a solid choice if you need funds quickly.
💡 Who should apply? Students attending school part-time or those needing quick approval.
How to Get the Lowest Interest Rate on Student Loans
Want to lock in the lowest rate possible? Here are some smart tips:
1️⃣ Apply for Federal Loans First – They always have lower interest rates than private loans.
2️⃣ Get a Cosigner – Private loans often offer lower rates if a creditworthy cosigner is added.
3️⃣ Maintain Good Credit – If applying for a private loan, a higher credit score means better rates.
4️⃣ Choose a Shorter Repayment Term – Some lenders offer lower rates if you opt for a 5-year repayment plan instead of 10 or 15 years.
5️⃣ Look for Discounts – Many lenders offer rate reductions for setting up autopay or making on-time payments.
Best Student Loans for College with Low Interest Rates
Conclusion: Which Student Loan Should You Choose?
If you’re looking for the best student loans with low interest rates, start with federal loans. They offer the lowest rates, flexible repayment plans, and forgiveness options.
However, if you need additional funding, private loans from Ascent, Discover, Earnest, or Sallie Mae can be great options—just make sure to compare rates and terms.
💡 Final Tip: Always borrow only what you need and have a repayment plan in place to avoid unnecessary debt.
Are you currently looking for a student loan? Drop your questions below, and let’s find the best option for you!