Get to Know Student Loan Consolidation Rate

When you’re thinking about consolidating your loan, it’s always best if you have an idea of what the student loan consolidation rate is.  Through this, you will have an inkling of how much you are going to pay every month.  You can also use this knowledge to compare the different rates that various lenders can give you, so you will be guided in choosing the right one. 

So, to give you some information about various student loan consolidation rate for both federal student loan consolidation and private student loan consolidation, then just go through the length of this article. 

· Federal Student Loan Consolidation Interest Rate

The interest rates for Federal Student Loan Consolidation are based on the weighted averages of all your student loan interest rates.  Federal student loans disbursed on or after July 1, 2006 have an interest rate of 6.8%.  Although interest rates on Federal Stafford Subsidized and Unsubsidized Loans change yearly, the rates will never exceed 8.25%.  For those who have federal student loans disbursed before July 1, 2006, variable interest rate loans will remain.  These loans will re-adjust every July 1 based on the results of the 91 day Treasury Bill.  As of the moment, interest rates for variable loans are as follows:

Stafford loans for borrowers in grace period (the 6 month period after graduating): 6.62%

Stafford loans for borrowers in repayment: 7.22%

Parent PLUS Loans disbursed after the period of July 1, 1998 but before July 1, 2006: 8.02%

Parent PLUS Loans disbursed after July 1, 2006: 8.50%

If you’re confused and would like to ask for assistance on these matters, then just give your lender or loan counselor a loan to figure out what your student loan consolidation rate will be. 

· Private Consolidation Interest Rate

This depends on the company that you choose.  Example, for your first year, the student loan consolidation rate could go as low as 7.52%.  First year introductory interest rates that equal to the 1 Month LIBOR or London Interbank Offered Rate (currently at 5.02%) are offered, plus the 2.50% depending on you or your co-signer’s credit. 

This is just an example of how private consolidation interest rates are being computed by the different lenders.  Again, it’s best if you compare with other lenders and loan consultants so that you will choose the best option for you. 
 
Since knowing the student loan consolidation rate of different companies is very important, it is best if you understand how these rates are computed before going into a major decision.