Introduction: Student Loan Consolidation Rates and Student Loan Refinance Rates
Everyone wants a quality college education, but not everyone can afford one.
Skyrocketing tuition rates and hyper-competitive college scholarships often make student loans the only way for students to finance the cost of their education.
Finding ways to lower the interest rate on student loans is an important and necessary step to lower the debt burden that looms after you receive that long-awaited diploma.
In other cases, many who have already completed their undergraduate education are finding that in order to climb the professional ladder, a post-graduate degree is necessary.
While furthering your education is always a good thing, taking out another set of student loans to get your master’s or doctorate degree implies another healthy debt load.
Finding the best consolidation loan rates or learning how to refinance your student loan rates is an important part of successfully managing your student debt.
Image Source: Student Loan Consolidation
In this brief article, Advisory HQ will look at the importance and benefits of finding ways to lower student loan interest rates.
We will then briefly look at the private student loan rates and current loan consolidation rates.
Finally, we will offer five tips for helping you find ways to lower the interest rate on student loans through finding the best refinance student loan rates and how to consolidate student loan rates.
Why Should You Look for a Lower Student Loan Interest Rate?
A four-year undergraduate degree at an out-of-state public university is probably going to cost you anywhere between $10,000 and $20,000 per year.
If you’ve chosen to go to a private college, you can plan on paying upwards of $30,000 per year, just in tuition. After four years, you’re looking at a potential debt of well over $100,000, comparable to a small mortgage.
Unfortunately, the interest rates on student loans are usually quite a bit higher than typical mortgage rates. Finding student loans with low interest rates is necessary to help you avoid a debt burden that may take you years and years to eliminate.
Since many young college graduates have plans to purchase a car and perhaps even take out a mortgage on a home, learning how to reduce your student loan interest rate can help you better afford the other loans you take out in life.
If you had to take out a $100,000 student loan and were unfortunate enough to get stuck with an 8% annual interest rate, you may very well end up paying thousands and thousands of dollars in interest alone; that’s money that could have gone toward a down payment on your first home or to paying off your car loan.
Private student loan rates can be punishing if you don’t first do your homework.
If, however, you were to shop around for the best student loan consolidation rates and student loan refinance rates, you may be able to find an interest rate as low as 2.5%, drastically lowering the interest you would pay on your loan and thus freeing up your cash flow for other expenses and purchases.
Since most young people don’t have a lot of expendable income, finding ways to lower the interest rate on student loans is an important financial responsibility that can help you take control of your economic situation.
While most students are simply interested in finding any type of student loan to finance their education, when it comes time to start paying those loans off, finding the best consolidation loan rates and refinance student loan rates is suddenly a much more urgent task.
Current Private Student Loan Rates and Loan Consolidation Rates
Private student loan rates and loan consolidation rates often change quickly. In recent years, we have seen an increase in student loans with low interest rates.
A decade ago, student loan rates were considerably higher.
According to Student Loan Hero, “refinancing student loan balances with a private lender can lead to a significant reduction in student loan interest rates, especially if you have older student loans with interest rates that can range from 4.66% to 8.5% for federal loans.”
Paying 8.5% on a loan can lead to a debt that can seem impossible to get out of. Luckily, the rates are much lower today. For private lenders, you can usually find a rate anywhere between 3% and 5%. Federal loan programs are usually around 4% APR.
If you choose a variable APR instead of a fixed rate loan, you may even qualify for interest rates as low as 2.2%. You can easily lower the interest rate on student loans through refinancing an older, higher interest loan into a lower rate today.
Social Finance Incorporated is one private lender that offers fixed rates as low as 3.5% and variable rates starting at 2.2%.
If you’re looking for the best refinance student loan rates or the best student loan consolidation rates, consider this company.
Furthermore, they have no max loan amount, so even if you have built up a student debt of six figures through undergraduate and post graduate degrees, you should be able to find a competitive interest rate to help you get out of debt.
Another private lender that offers some of the best student loan consolidation rates student loan refinance rates is Common Bond. Like Social Finance Incorporated, they offer lower variable rates that move with the market. Their fixed interest rates start at 3.5% but can be as much as 7.74%.
They also offer a unique hybrid rate that offers the best of both fixed and variable rates to help you lower your student loan interest rate. Their hybrid rates range from 3.81% to 6.25%.
Best Ways to Lower Interest Rate on Student Loans
So, how do you go about finding ways to lower the interest rate on student loans? Below you will find five simple tips to help you significantly lower your student loan interest rate.
- Know the Grace Period on Your Student Loans
A grace period is a certain amount of time after you graduate that you have before you have to start paying off your loan. Most federal loans have grace periods between six and nine months long.
The grace period on loans from private lenders varies widely, so it is important that you ask your lender how long you have before you start receiving a monthly bill. Grace periods are important to help graduates find a job and get financially established before having to start paying off their loans.
Furthermore, financially astute graduates will use their grace period to find the best ways to consolidate student loans rates. If you have various loans, you may benefit from consolidating them into one, easy-to-manage debt.
Furthermore, use your grace period to shop around for the best student loan refinance rates. Interest rates can change quickly, and in your haste to find a loan, you may have gotten a rotten interest rate.
If you can consolidate and refinance your student loans during your grace period, you may very well be able to significantly reduce your student loan interest rate.
- Enroll in an Auto-Pay Program to Reduce Student Loan Interest Rate
The majority of private and federal lending agencies will lower your private student loan rate, student loan consolidation rate, or student loan refinance rate if you also sign up for an auto-pay program.
Auto-pay programs simply allow the lending agency to automatically take money out of your checking or savings account each month.
Since many young graduates may not have the financial discipline to remember to pay different student loans on times, lenders prefer auto-pay programs so that they don’t have to deal with late payments.
Most lenders will lower your private student loan rate, student loan consolidation rate, or student loan refinance rate by 0.25% simply for signing up for an auto-pay program. While 0.25% may not seem like a lot, it can add up to significant savings over the 10 years or so that you pay off your loan.
- Refinance Student Loan Rates if You Have Older Student Loans
Many 18-year-olds entering college don’t have much of a financial education, leading them to sign their name to a less than optimum student loan. If you took out a loan that had a high interest rate, you will certainly benefit from finding better student loan refinance rates.
Image Source: Student Loan Refinance Rates
Since interest rates have lowered significantly in recent years, if your student loan is 10 years old or more, you can almost certainly find a more competitive rate in today’s market.
Finding a lower interest rate on student loans will save you thousands of dollars, especially if you’re paying anywhere between 7 and 8%.
Furthermore, if you’ve been religiously paying off your student loan and improved your credit through other ways, you probably will find lenders willing to give you a much lower student loan consolidation rate or student loan refinance rate because of your improved credit.
- Search for the Best Consolidation Loan Rates
If you have several student loans from different lenders and have a hard time keeping track of the different loan conditions and payment dates, it might make sense to consolidate those different loans into one fixed rate loan that is easier to manage.
If you’ve been paying a high interest rate, your student loan consolidation rates might also help you lower the interest rate on your student loans. However, trying to consolidate student loans rates isn’t necessarily a strategy that everyone should follow.
According to Ticas.org, “for private consolidation loans, shop around carefully for a low or fixed interest rate if you can find one, and read all the fine print.
Never consolidate federal loans into a private student loan, or you’ll lose all the repayment options and borrower benefits – like unemployment deferments and loan forgiveness programs – that come with federal loans!”
- Research Loan Forgiveness Programs
There are a number of federal and private programs that will forgive your student loans all together. If you are having a hard time getting out of debt, consider volunteering for the Peace Corps or AmeriCorps.
You’ll have a life-changing experience and may also be able to apply for loan forgiveness for your service.
Teachers, nurses, and others with service-oriented professions may also be able to find ways to lower interest rates on student loans or to have those loans forgiven. You can learn more about forgiveness for student loan debt here.
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How Searching for the Best Student Loan Consolidation Rates and Student Loan Refinance Rates Can Help You Get Out of Debt Quicker
Whatever your student debt situation is, taking the time to search for the best student loan consolidation rates and the best student loan refinance rates is well worth your time.
There is nothing worse than having a student loan hanging over your head and bogging you down while you are trying to get a financial foothold on your life.
Taking out a mortgage to buy your first home is a lot easier when you don’t have an unpaid student loan still looming. Finding lower interest rates on student loans can help you get out of debt quicker so you can get on with the rest of your life.
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