June 19, 2021

How Much Is Student Loan Interest?

Repayment

Did you take out a student loan to finance your education within the last 10 years? Luckily, the federal government has taken several steps to ease the financial burden of borrowers through the HEROES (Health and Economic Recovery Omnibus Emergency Solutions) act.

According to the announcement, federally-approved loans taken from 2002 onwards are eligible for loan forgiveness — with conditions. Due to the financial hardship brought by the COVID-19 pandemic, interest rates for student loans that would have accumulated have also been set to 0% until September 30, 2021.

Unfortunately, for those taking out student loans now, interest rates will be placed on top of the principal loan amount. And, depending on your choice of financing, interest rates will vary.

To learn more about the current interest rates for student loans, whether federal or private, keep reading.

How Much Is the Student Loan Interest Rate for Federally-Approved Student Loans?

Since 2019, student loan interest rates have been steadily declining. In 2019, student loan interest rates funded by Federal Student Aid stood at just over 5% for undergraduate loans. The interest rate was higher for student loans made to finance graduate education, being nearly two percentage points higher than undergraduate loans (6.60%).

From 2020 until the early half of 2021, Federal Student Aid slashed interest rates by nearly half. Interest rates for the financing of undergraduate studies stood at 2.75%, while interest rates for graduate loans dropped by at least two percentage points (4.30%).

The exception to this declining trend arrived after May 2021, when an increase in interest rates was announced. From 2021’s 2.75% undergraduate loan figure, the new interest rate has been set a full percentage point higher (3.73%).

Graduate student loans are not exempted. Like undergraduate loans, the new graduate loan interest rate rose to 5.28% as per the announcement.

What About Private Student Loans?

Unlike federal student loans, private student loans can vary greatly depending on the lender. It is important to know that there are large variations between private lenders. However, the lowest recorded interest rate seems to be 3%.

The following banks and lenders offer these interest rates.

Final Thoughts

When applying for student loans, it isn’t enough to know the principal amount you have to pay back. Knowing your student loan interest rate will allow you to determine the correct amount you will need to set aside after you graduate.

Whether you decide to take a federally approved loan or one offered by a private lender, explore your options and choose carefully. Inquire about everything crucial, such as repayment details, and, most importantly, each one’s interest rates.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

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