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Is 5.375% the lowest interest rate you can get on student loan consolidation?
ByThis is the deal Graduate Leverage gave me on a 25yr. payment plan for $31,500 in student loans. My payments came out to only $173 a month. Is this as good a deal as I am going to get on consolidation? (1% is taken off the interest rate after 17 timely payments with a .25% deduction taken off for automatic withdrawal )
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3 Comments
November 22nd, 2009 at 1:51 am
If you are consolidating your federal student loans, the interest rate is mandated by federal law. So, even if you go to other consolidation companies they will give you the same interest rate. The difference might be the 1.25% interest rate reduction they are offering. Others might offer more or less…you’d just have to search around and check it out. In my experience the .25% reduction is pretty standard…where it’ll differ is the reduction for on-time payments. Some might do more, some might do less, after additional months or less months.
November 22nd, 2009 at 8:05 pm
By law, lenders are required to use the same interest rate formula for Consolidation Loans. However, many lenders offer interest-rate reductions for paying on time or via direct debit. It is important to read the fine print and understand how you become qualified for or disqualified for a lender’s borrower benefits programs. Beyond savings, you should consider customer service, flexible repayment options, online account access and applications, reputation and industry experience when selecting a lender.
Keep in mind that extending your payment term to 25yrs means you will pay more interest over the life of the loan (just like a mortgage or credit card), so as soon as you’re able to, it’s smart to pay more than the minimum monthly payment. And be sure to get your consolidation application in before midnight on Saturday, as the interest rate will rise 8 basis points on July 1.
November 23rd, 2009 at 1:06 pm
The two main things that you will come across when thinking about what Student Loan Company to go with are Borrower Benefits and quality of Customer Service. Student Loan Consolidation companies do NOT have the ability to undercut one another and lower a borrower’s interest rate due to the fact that this a FREE federal program, regulated by the federal government. The Interest Rate you will receive is regulated by the Federal Government and based on the T-bill.
One thing that separates companies from one another are Borrower Benefits, different companies offer different Borrower Benefits. There are two main Borrower Benefits that you will encounter; .25% reduction for using Automatic Debit, and 1% reduction after 36 ontime payments. I would suggest inquiring with the company as to what their Borrower Benefits are when it comes to Student Loan Consolidation.
The interest rate you receive is based on a weighted average of your individual loan interest rates with the larger loan amount interest rate getting more weight than the lower loan amount interest rate.
Keep in mind it would be in your best interest you go with a company who offers the FFELP Consolidation Loan Program. If you were to consolidate your Federal Student Loan debt with you other debt than you would lose all of your Federal Benefits that come along with your Federal Student Loans. For more information on Borrower Benefits and the FFELP Consolidation Loan Program, please visit the source below.