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Questions About Student Loan Consolidation Interest Rates

Will the student loan interest go up?

I know there are new rate of student loan consolidation coming out in this coming June.
I am wondering what you guys think, the interest is going up or down?

Industry Expert answers:

I expect the rate will go down since it, like all other loan interest rates ie credit cards, is calculated as Prime Rate, aka Prime, plus something, that something is different for every loan and sometimes for every person. Since Prime has dropped like three times over the past few months I’d expect the rate on new of variable student loans to go down. However, if you already have a loan with a fixed rate it will remain locked as it isn’t affected by anything except you not paying.

Is 5.375% the lowest interest rate you can get on student loan consolidation?

This 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 )

Industry Expert answers:

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.

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