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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).


Student Loan Interest Rates – What Rates Are Currently At

November 25, 2011

Student Loan Interest Rates

student loan interest rates

Student loan interest rates can vary, but the general rule of thumb when it comes to the subject is that federal student loan interest rates are most always lower than private student loan interest rates. To give you an idea for what your interst rate might look like for federal student loans, below are the top 3 most used federal loan programs as well as their interest rates, which are based of of numbers in late 2011:

  • Federal Stafford Loans – Interest rates start as low as 3.4 % and are available for both undergraduate and graduate students.
  • Federal Perkins Loans – 5 % Fixed Interest Rate. These loans are based off the financial need of the applicant and have a 9 month grace period.
  • Federal PLUS Loans – Interest rates are fixed at 7.9 %. These loans are applied for by parents who are taking out loans for dependent children.

As far as private student loan interest rates go, rates are constantly fluctuating, and can be any number at any time, but to give you an idea for what interest loans may look like when applying for private student loans, here are a few lenders and their student loan interest rates:

  • Sallie Mae – Interest rates are capped at 9.875 LIBOR (London International Bank Offer Rate), which is basically the interest rate that is charged between a different bank or lender for student loans.
  • Citibank – Interest rates tend to range anywhere from 3.125 to 9.375 percent.

The other benefit that comes with federal student loans interest rates are that they are fixed on both Perkins Loans as well as PLUS Loans, which means they are not variable, or do not change throughout the life of your repayment term. Applying for federal student loans means that you fill out a Free Application for Federal Student Aid (FAFSA), which you will also find out if you qualify for federal loan programs which can help with your tuition as well. As with private loans, there rates are always variable meaning they can change anytime. Federal loans also have more lenient repayment terms, allowing one up to 25 years to pay off their loan debt, whereas private lenders usually give one up to 12 years.

Private student loans should be used to cover the cost of your entire tution minus whatever else you are receiving in the form of both federal loans and any other financial aid. Private loans can come with lower student loan interest rates in the event that one either has excellent credit or finds a co-signer that does, which private loan lenders low applicants that have credit scores higher than 750. It is also suggested that you apply with great credit as low credit applicants can find themselves with interest rates that are up to 6 % higher than great credit applicants.


Can One Lower Their Student Loan Interest Rates?

Being that when you go to apply for a student loan, you will need to sign a promissory note which is a statement one signs which they are promising that they will repay their debt as well as the interest under the terms that were agreed upon. Due to this fact, student loan interest rates can’t necessarily be decreased through the lender, but the possiblity for dropping your student loan interest rate can be done through consolidation, which can be an great option to consider when you have multiple student loans. The process of student loan consolidation can drop interest rates because the loan repayment term will be extended resulting in one having to pay more in interest, but if you can find a consolidation company that doesn’t have any repayment fees, meaning they don’t charge a fee to pay off your debt early, you can enjoy lower interest rates and pay your debt off faster when you have the funds to do so.