By: Gaurav Bhola, MSM, Managing EditorIt is time for you to consolidate student loans. Don’t you want to save thousands of dollars in interest over the lifetime of your student loan? Different college and university loans with variable interest rates can be difficult to keep track of. Isn’t it better to perform a student loan debt consolidation into one low-interest rate university loan that is easier to manage? If you have multiple Stafford loans with variable interest rates then this is the perfect time to consolidate your loan when your existing loan rates readjust on July 1st.
On July 1 the loan interest rates will readjust to the 91-day Treasury-bill rate at the end of May. The new rate will stay the same for the next 12 months. Now is the opportune time to lock into a new low rate. In the past, loan consolidation was a mid-summer ritual for college students as they refinanced their college loans to lock in rates lower than 3%.
However, in 2006, a new law fixed the loan rate for new Stafford loans at 6.8% and banned college students from consolidating their loans while still in school. Now, you must first exit the college university system before you are permitted to consolidate and refinance your higher education loans.
Unfortunately, consolidating your fixed rate Stafford loans won’t truly lower your rates, but student loan consolidation would be beneficial with variable-rate loans. Private lenders no longer offer special perks such as discounts and rebates like in past years of new consolidation loans and refinances.
If your loan interest rate is too high then college student loan consolidation would make sense. Remember, that consolidating your loans can potentially save you thousands in interest rates over the tenure of the loan. But it never hurts to get a free student loan quote to cut your current loan payments.
Keep in mind that some lenders may require a minimum loan balance of $10,000. Also, if you have consolidated in the past, you can re-consolidate your loan again, but only if a new loan has been taken out.
Irrespective of your loan type, loan consolidation can lower your monthly payment by lengthening the standard Stafford loan 10 year term to a 30 year term; but remember that you will also be paying interest on the extended loan. Get a free no-obligation loan quote to see if doing a student loan consolidation makes sense for you.
