Student loan consolidation interest rates
Students loan consolidation is basically paying off or refinancing all the existing loans through a single loan. In simple words, a students loan consolidation means to merge all your debts from all the lenders and creditors in a single loan and pay back a single lender. It is just a matter of applying for a bigger loan to pay off all the other small loans or debts that you owe. However, in return of this service, the loan consolidator would set the rate of interest for the consolidated loans according to the existing legal parameters.
A student loan consolidation is not very much different from a credit card debt consolidation or any other debt consolidation service. According to the consolidation fact, it means the same thing Just like all your different credit card debts are consolidated with a single loan, a student loan consolidation loan would merge all your educational expense debts including accommodation debts into a single loan that can be easily paid off. The internet alone is the perfect source to find hundreds of companies that offer a student loan consolidation. You can just take a look at a few online dealers to find out about their interest rates for student loans consolidation. Among them, a few online companies would offer a free sign up while others might charge a minimal charge.
Student loan consolidation interest rates
The rate of interest for a student loan consolidation would largely range between 3.2 percent to 4.5 percent on an average. There are a few creditors who might offer a higher or a lower interest rate that the average rates mentioned. There are also a few creditors who offer rebate of nearly $1,800. There are also creditors who advertise a reduction of payment which basically ranges anywhere from 50 percent to 60 percent. You might also benefit from a 1.75 percent total discount on federal interest rates after 24 months for a federal student loan consolidation that is also offered by other creditor.
The only main difference between a general credit consolidation and a student loan consolidation is the fact that student loan is ensured by the government of the country. The interest rates are actually based according to the 91 day Treasury bill rate that is established during the last day of the auction in the month of May every year. The student is allowed to consolidate the loan only once with a private lender and any other debt consolidation should be made through the Department of Education. If the loans that are consolidated carries a different interest rate then an average is computed that comes up with a new interest rate. If you are opting for a re-consolidation then it would not change the interest rate of your previous consolidation. The student loan consolidation however does not include any fees, but the government subsidizes the rates of the private lenders for a student loan fee. The student loan consolidation is also a big help to the credit rating of the student as the interest rate might also depend of the repaying capability of the student.