Interest Rates For Student Loan Consolidation

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So you have decided to get a student loan then you also need to know all about the interest rate and the ways to reduce them for the benefit of students using student loan consolidation. If you are planning to get a very low rate first you need to do a market survey according to your region and see that which the lowest available rates for your area are.

Then keep in mind the rate which you prefer and can afford, normally each year the government changes the rates of interest and this is really a variable so you need to get the latest rates whenever you want to go for student loan consolidation. It is well recommended that before going for any plan you need to know exactly about your current rate of interest and terms and conditions of service.

Sometimes the rates may be very high in such a case you can wait for rates to drop; also you need to search about the rates of interest for the next year so that you do not regret it later.

If you opt for a higher rate of interest you may get a longer term period for paying the same. For example, if you have a 12 months loan which has a 10% rate of interest, you can consolidate it to 5% rate of interest but the term may increase to 36 months thus you gets almost 50% more interest to pay but over a period 3 times your actual period reducing the monthly load on you. Some lender also offer about 2 to 3 % cut for the same time period, for higher cuts time is increased.

There are also some lenders which reduce the interest rate based on your credibility, such as if you pay all your debs on time and are never late after certain time period the lender recovers much of his principle amount so he may offer some percentage cut to fasten his repay process and also save you a couple thousand dollars. This usually happens over a period of year or two. But you need to be very careful in this as if you may not pay once on time, the lender will set the original rate of interest and so no cut for you, so weigh your options carefully.

In another type the lender may ask you for automatic debit from your account directly each month reducing the hassles and for that he may provide you with about 1% relief so your interest rate is still lowered. This means that the lender will at each month directly debit the monthly installment.