 TITLE: What Are the Current Interest Rates on Student Loans? CONTENT: How Private Student Loan Interest Rates Work\n--------------------------------------------\nIf you're interested in private loans, you will have to apply with a lender and meet the eligibility standards. The lender will review your income and check your credit history and credit scores. If you appear to be a poor credit risk, you could be denied, while if you appear to be a good credit risk, you'll likely be accepted. The interest rate you're offered will be on the lower end of the scale if your credit history is positive, and higher if it's not so fabulous.\nPrivate students loans can have fixed or variable interest rates. If it's a loan with a fixed rate, it follows the same rules as the federal loans: The rate won't budge unless you refinance or consolidate.\nIf your private student loan's interest rate is variable, however, it can fluctuate over the term. Variable interest rates are tied to a short-term index rate (usually the prime rate or London Interbank Offered Rate), and a margin is added to that figure. When those index rates go up or down, so will the interest rate on your loan.\nFor example, if the prime rate is 5.50%, and the margin is 1.9%, the variable rate will be 7.4%. Not too bad, right? Yes, for now. If an index's rate rises, which can happen monthly, quarterly or annually, so will the rate on your loan. Some variable rate private loans come with a cap, which prevents the rate from going over a certain percentage point. END