Get The Lowest Student Loan Consolidation Interest Rate Poss
- By:Ryan Welch
How to get the lowest student loan consolidation interest rate possible:
1. Lock in your interest rate when it is low
2. Shop around and find out who has the lowest interest rate reduction benefits
1. Interest rates that are variable change each year. The interest rate is set by the government and will be introduced each year in May and take effect on 1 July. Before you decide if student loan consolidation is right for you make sure that you are comfortable with the current interest rate. If the interest rate is historically high then I recommend doing a little research to find out if financial experts think it will significantly drop in the coming years. If so it might be best to wait for the change.
2. Shop around to find out who offers the lowest interest rate reductions. There are two main reductions. The first reduction that most lenders offer is for consecutive on-time payment. Here is an example, let's say you took a student loan consolidation and have been paying your monthly payment for 24 months. For those 24 months you have never been late. Since you have never been late for a payment your lender gives you 1.25% interest rate reduction, effectively lowering your interest rate from 5% to 3.75%. This is a huge money savings especially if you pay your loans off over a long period of time.
A reduction like this can end up saving you thousands of dollars. But keep in mind that if you are ever late you will have to start all over from the month you made the late payment. Also, check with each lender to find out when the discount starts, most start after 24 or 36 months. It is better to find a lender who offers the benefit earlier rather than later. The second benefit most student loan consolidation programs offer is automatic withdrawal. In order to get this benefit ask your consolidation lender to set up automatic debit. Each month, at a pre-described time your lender will automatically debit your account for your monthly payment. This benefit will usually be a reduction of about 0.25-0.50%.
Ryan Welch is a published author of many Student Loan Consolidation Information articles and owner of http://www.GETLoanconsolidationinfo.com your free source for all kinds of useful student loan consolidation info.