New Student Loan Consolidation data

Discussion in 'Credit Talk' started by Debmac, Aug 22, 2001.

  1. Debmac

    Debmac Well-Known Member

    If anyone is thinking about consolidating, NOW is the time to do it.

    Before Sep 30, 2001, if you consolidate, you'll get a .8% reduction in your interest, guaranteed no more than 8.25% for the life of the loan, AND if you make 12 payments (WHEN they are due, not now), you'll keep the lower rate!



    Direct Consolidation Loans Receive a 0.8% Rate Reduction

    As an incentive to encourage timely student loan repayments, all borrowers who
    consolidate eligible student loans into the Federal Direct Consolidation Loan Program
    between October 1, 2000, and September 30, 2001, will receive an immediate
    interest rate reduction of 0.8 percent. However, to keep this benefit beyond the
    initial 12-month period, a borrower must make the first 12 monthly payments on
    time. The 0.8 percent rate reduction will become permanent once these first 12
    payments are made on time.

    For example, if your Direct Consolidation Loan interest rate is 8.25
    percent, your interest rate drops to 7.45 percent. If you make your
    first 12 payments on time, you keep that interest rate and could save
    more than $400 for every $10,000 borrowed over a standard 10-year
  2. chelechele

    chelechele Well-Known Member

    Ok...and this is valid if your repayment doesnt begin until 2005?
  3. Debmac

    Debmac Well-Known Member

    Yep. It was posted on my college's financial aid website (Mich St). They were encouraging people to consolidate NOW, even if you are not due to start repayment for a few years...


    If you have student or parent loans you have a special opportunity until September 30 to consolidate your loan(s), locking in today's very low interest rates. "

  4. EdG

    EdG Well-Known Member

    If memory serves me, you can also get a .25% interest rate reduction if you have your payment automatically debited from your checking account.
  5. toromio

    toromio Well-Known Member

    EdG, Right you are! The savings are really great, and I was going to set up my repayment that way anyway! I hate to write checks.

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