Student Loan Consolidation Rates

December 3, 2011

Student Loan Consolidation Rates

Being that we are are talking about student loan consolidation rates, that means that you have most likely graduated so congratulations on making it through the grueling road! When it comes to rates that consolidation companies will offer, there are two main categories, those being a fixed rate which is an interest rate that stays the same for the entire time you are paying off your consolidation loan, as well as variable rates which can go up or down during the time you are paying back your debt, depending on the general index of all interest rates.

One can consolidate both private as well as federal loans, but must be done seperately, which student loan interest rates tend to be much lower on federal loan consolidaion. To give you an idea of how rates are calculated, the lender will average all your current interest rates that you are paying on your loans and will round that number to the nearest 1/8 percent.

Student Loan Consolidation Rates

How To Get The Best Student Loan Consolidation Rates

When it comes to getting the best student loan consolidation rates, it is a known fact that some of the lowest rates are found amongst non profit consolidation companies, as they are not looking to close you as a customer in order to make a paycheck, which you can verify if they are non profit by asking them to prove it by showing you the non-profit formation being: (501(c)(3)). The below tips are some great rules to follow when it comes time for find a company that will give you the best student loan consolidation rates, which will mean you paying a lot less in the form of interest that you would with a high consolidation rate.

  • You will want to go for the best principal rate reduction if you want to pay off your debt early, which if you do want to pay early, make sure that they do not have any repayment penalties for early repayment or higher than the minimum payment.
  • For those of you who are looking to spread out payments for as long as possible, you will want to look for an interest rate reduction.
  • Find companies that offer discounts that are applicable throughout the life of the repayment, not just for the first couple months.
  • Do not settle with the first company you find, compare student loan consolidation rates.
  • In the event of private student loan consolidation, you want to either have good credit, or bring a friend or family member who has a great credit score, where their higher the score will most often mean the lower the interest rate. If possible try to get an interest rate that is at least 750.
  • If you already consolidated your loans and have built up a better credit score during that time, you can consider switching to a different lender, which in turn will provide you with a lower student loan interest rate due to your credit score boost. Or you could try and negotiate with lenders and tell them that you are thinking about doing business with another lender, and then ask them if they will drop your interest rates or provide you with any other discounts in order to keep your business.

It is also important to know that there many companies out there that are trying to scam you. You can avoid these companies and get great student loan consolidation rates by verifying the company by checking if they are part of one of the following; The Association of Debt Settlement and/or Internal Association of Professional Debt Arbitrators (IAPDB).


Category: Student Loan Consolidation

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