Student Loan Consolidation Question

[lykaon78]

At least twice a week I receive consilidation offers from non-governmental agencies for my Federal Stafford Loan.

Has anyone had any experience with there?

My most recent offer has 3.5% Fixed rate with no credit check, no pre-payment fees, and no transfer fees?

With my rudimentary math skills and their hype, that calculates to my current payment and a 7-8 year shorter repayment term.

Unfortunately, my too good to be true buzzer is going off in my head.

Anyone have any experience with this?

One thing I know is that the governement isn't going to screw me over with my current loan, at worst they bump the rate to 8.25%


-Lykaon

 

[sohcrates]

I just consolidated my student loans on July 2nd.

I stayed with the company (american education services) whom my loans are through..i ignored all those other "offers" that come in the mail

basically, if you consolidate, you lock in these ultra low percentages, BUT, often, with consolidation, they bump up your time-frame to re-pay from 10 years to 15 or 20 years.

I called, though, and asked what it would be for 10 years, they said they could give me about 4.25 %, plus .25% more off if i sign up for direct withdrawal from my checking account.

so basically, i pay 4% for 4 years after which, if i made my payments on time, they drop it to 3% for the last 6 years.

I think consolidation is really sweet because interest rates are VERY much unlikely to be this low again in the future.

just when you call, remember to ask how long the term of the loan will be at this fixed percentage

 

[lykaon78]

ttt

Still curious. But, thanks Sohcrates.