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Is it Possible to Negotiate My Student Loan Interest Rate?

Blog Author ProfilePeppyWallet Editorial Team
Posted on August 13, 2019
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Can I negotiate my interest rate on my student loans?

This is a commonly asked question by many student loan borrowers, and for good reason. If you can negotiate your interest rate on your student loan, you have the opportunity to save thousands of dollars in interest paid over the term of your loan. A loan principal of $18,000 and an interest rate of 6.2% with a loan term of 15 years can have you paying as much as $9,720 in interest.

While you unfortunately can't negotiate the interest rate for federal student loans since those rates are fixed, you can certainly try to negotiate your student loan interest rate for private lenders or refinancers.

Here's how you can take a stab at negotiating your interest rate with private lenders.

Private lenders set their own interest rates for student loans

Federal student loans are originated with fixed interest rates which are set by Congress, but this doesn't mean you can't negotiate your private loan rate. The rate that your lender agrees to receive when you submit your lending or refinancing application depends on a wide variety of factors, such as your income levels, DTI ratio, or even your co-signer's income and credit profile. The better your credit history, the more responsibly you can manage your expenses and the lower your DTI, the higher the chance that you can reduce your interest rate based on your personal profile.

Private lenders are flexible, which implies that they might potentially be willing to negotiate your interest rate, yet lenders aren't likely to submit to a lower interest rate once you have agreed to the loan terms. Interest rates are determined by complex financial formulas which take into account multiple current and historical statistics related to the applicant's financial profile, as well as the profile of a co-signer, if applicable.

Since it's tough to negotiate your interest rate once you and the lender have agreed to the terms of a new loan, it makes a lot more sense to try to shop around with multiple offers to find the lowest interest rate before you make a final, binding decision. Be honest and open with lenders you speak on the phone with, and tell them you are looking at other opportunities before making a final decision.

If you can get a co-signer during the process, this could also help you get a lower interest rate as well, especially if they have a better financial profile or higher credit rating than you do.

Be sure to ask lenders if they offer any autopay discounts during your application or search process, since some could offer a small discount on your interest rate for setting up autopay features on your loans so the funds are withdrawn directly from your bank account each period. A commonly offered discount of 0.25%, for example, could save you almost $500 in interest paid on a loan balance of $30,000, an interest rate of 10% and a loan term of 10 years.

Refinancing your student loans could offer better rates

Refinancing your student loans could yield even better results than trying to haggle for a lower interest rate with your lender, but there's a lot of important questions you should ask yourself before deciding whether or not to refinance your student loans.

If you have a low enough DTI and a stable income stream or a cosigner with a solid financial profile, you could apply for student loan refinancing and could lower your interest rate on one or more or possibly all of your student loans.

Refinancing your student loans allows you the flexibility to pay under more favorable loan terms, such as extending your term of the loan to pay less each month or to even shorten the lifespan of the loan in order to accelerate principal and interest paydown, especially if you recently got a better and more stable job and interest rates in the macro environment have dropped.

The caveat with student loan refinancing is that you should ask yourself whether refinancing your federal student loans is a good idea since you could miss out on favorable repayment and even forgiveness plans offered by the government.

In conclusion

It will probably be fairly difficult to negotiate your student loan interest rate, especially once your lender and you have officially agreed to the terms and conditions of your student loans.

However, refinancing your student loans offers a higher possibility of you receiving more favorable loan terms that can easily help you save money over the term of your loan, if your credit score and financial condition can help you qualify for a better rate.

Here are some of the best refinance lenders

Variable APR

1Important Disclosures for Earnest

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest's fixed rate loan rates range from 2.98% APR (with autopay) to 5.89% APR (with autopay). Variable rate loan rates range from 1.99% APR (with autopay) to 5.74% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of December 7, 2020 and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 12/7/20. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit, email us at, or call 888-601-2801 for more information on our student loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2Important Disclosures for CommonBond

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.

3Important Disclosures for LendKey

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any education institution. Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810. As of 12/07/2020 student loan refinancing rates range from 1.99% to 8.56% Variable APR with AutoPay and 2.95% to 8.77% Fixed APR with AutoPay.

The team members at PeppyWallet pride themselves in finding and suggesting services and products that they believe are of high quality and have the potential to positively change a student loan borrower's financial circumstances. We may earn an advertising fee or sales commission when we recommend various services and products to you, which is how we maintain our site and education platform. Be sure to read the fine print to help you understand your product's or service's terms and conditions. PeppyWallet is not an investment advisor or lender, and is not involved in the investment or loan approval process, and does not make investment related or credit decisions. Any terms and rates which are listed on our website are our latest estimates but are subject to change at any time, and we cannot guarantee that they are up-to-date.