Refinance Student Loans with Lower Interest Rate – Student Loan Consolidation Options
Student Loan Refinance Rate
Student loan refinancing or consolidation is done through assistance with different privately owned financial institutions or by the Federal Government. With the Federal Student Loan, the current expenses are picked up and taken care of via the United States Department of Education or a related debt consolidation business.
Who picks this up will greatly depend on the amount of the initial expense incurred and the exact type of student loan that a person has. Interest rates associated with a student loan are calculated by the basic average annual rate in effect within the United States. The associated interest rate can differ from as low as 4.70% to as high as 8.25% on a Stafford student loan. Other types of student loans can incur an interest rate of around 9%.
There are methods you can take to help lower your interest rates when you consolidate your student loans.
Below I have outlined a few of these methods that can help you accomplish this to the best of your ability.
- To date, the United States Consolidation Program lets students to combine or consolidate one time with a privately owned company and once again with the Department of Education. Keep in mind that reconsolidating will not effect the interest rate.
- Students can get the added benefit of what is known as a weighted average calculation on their consolidated loan. This helps to give the most up to date interest rate available. This type of calculation is available on loans that have combined credits, types and rates within their original student loan.
- This method works much in the same way as a refinancing option. The major differing aspect is that the interest rate will not vary or change.
- Utilizing a Student Loan Consolidation Company will offer you a cheaper method than going with a privately owned lender. Usually a privately owned lender will charge higher fees to accomodate your consolidation.
- In most circumstances, a student that uses this method will have a stronger credit rating in the future than if they have never reconsolidated or refinanced their student loans. It will add to their credit history.
- A reduction in monthly installment payments will happen once a reconsolidation to a loan has been completed.
- Many options are available to a student to reconsolidate.
The most popular are:
- Federal Stafford Student Loan
- Parent P.L.U.S.
- Government Direct Credits
Utilizing a student loan reconsolidation can actually help you save time and money and help you to focus more fully upon your studies. Most consolidation methods help by managing much of the paperwork associated with your loan. This helps to keep your mind on more important things, such as keeping your grades up.