Home / IRS and Spread: what they mean in a student loan

IRS + Spread: a simple guide to student loans

#Financial Education

13 May 2025

Understanding what IRS + Spread means can help you read loan terms with more awareness, compare different offers, and—most importantly—know what you’re really paying for. This guide breaks it all down, step by step, using practical examples and simple language—even if you’ve never dealt with finance before.

What is a fixed interest rate on a loan?

A fixed interest rate means the rate stays the same throughout the entire repayment period. Once agreed upon, it doesn’t change—so your monthly payments are always calculated with the same rate.

In student loans, the fixed rate is often written as:

IRS + Spread = Fixed Rate

What is IRS?

IRS stands for Interest Rate Swap. It’s a market-based reference rate that reflects how much it costs to “lock in” a fixed interest rate for a set number of years.

Each loan duration has its own IRS:

IRS 5A → for 5-year loans
IRS 10A → for 10-year loans
IRS 20A → for 20-year loans

“A” stands for “years”. The IRS is updated daily based on market conditions.

Where to find it?
Check the updated IRS values here: IRS Table – Il Sole 24 Ore
Make sure to look at the “Fixing” column.

What is the spread?

The spread is the additional margin that banks or lenders apply on top of the IRS. It’s the “commercial” part of your loan’s rate, and it varies from one provider to another.

Example:

IRS 10A = 2.8%
Spread = 2.5%
Fixed rate = 5.3%

What does “loan duration” mean in a student loan?

In a student loan, “duration” refers only to the repayment period, not the years spent studying.

Repayment starts about 30 months after the last disbursement (check your lender’s conditions). From that point on, you’ll pay fixed monthly instalments.

Example:

Last disbursement: June 2025
Repayment starts: December 2027
Repayment duration: 10 years
End of loan: December 2037
→ In this case, the applied IRS will be the 10-year rate.

⚠ Some banks may begin to accumulate interest during the pre-repayment period (the 30 months where you’re not yet paying back). Always check your loan contract carefully.