Student Loan Consolidation Rate in Federal and Private Consolidation by gjjur4356


									?dept consolidation, department consolidation, department education consolidation,
loan consolidation department, dept consolidation loanStudents and their parents can
use student loan consolidation that will allow them combine their education loans into
one loan from a single lender. That new loan - consolidation loan - will be then used
to pay off the balances of the originating loans.

The process of consolidating student loans is similar to refinancing a mortgage. It's a
great way to improve own finances as it gives the borrower a number of benefits, such
as: lower monthly payment, lower interest rate, longer repayment schedule, lack of
application fees and of credit check as well as deferment and forbearance options.

In this article I will discuss the issue of the student loan consolidation rate and how it
is determined in federal and private consolidation.

First of all, it's important to remember that usually it is not a good idea to include any
of your federal education loans if you decide to take a private student consolidation
loan. In most cases, they don't come with private student consolidation loans.

The higher the interest rate, the longer the total cost of taking the loan will be. Also,
getting a fixed interest rate is preferable to a variable rate, as it is just much easier to
live with the fixed rate and not to worry that it may significantly go up and negatively
impact your financial well being.

However, it's only true for the federal student loan consolidations, but in most cases
the private consolidations don't feature fixed interest rates. Because the private
consolidation loans belong to the consumer loans, they are credit-based and have to
carry variable interest rates.

To the contrary, all federal student consolidation loans carry a fixed interest rates,
because they are taxpayer-supported.

Those bases differ from loan to loan, but the lenders usually choose one of these -
either the Prime Rate or the 3-month LIBOR Rate. The second one has been
significantly lower over the last few years, thus it's more advantageous for the
borrowers. The lenders arrive at the final interest rate by adding a margin determined
by the borrower's credit rating.

Later on, you may also earn another interest rate reduction if you continually make
on-time monthly payments for a certain number of months (e.g., 24, or 36, or 48

Any interest rate reduction will usually mean thousands of dollars in savings, so try as
much as you can to use all opportunities to earn those reductions and save a lot of
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