- Jun 7, 2003
- 4,815
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I've finished about ten years of college and it's about time to start paying off my student loans. It's about $20K worth of debt.
Most of it is in the form of variable interest federal loans, there's a $1300 one at a fixed 8.0% and an $1800 one at a fixed 5% rate. These two fixed interest rates are the highest. The variable rate loans are more like 3.5% or less (thanks Mr. Greenspan!).
One of my lenders is offering to consolidate my loans at a fixed rate. I can consolidate the ones I want and leave out the ones I don't. The fixed rate is based on today's interest rates and weighted according to the amount of each loan.
For example, say I have a $5000 at today's 2% variable rate and $2500 at today's 4% variable rate, then I can lock in a 2.75% fixed rate for the next ten years by consolidating. That way, as interest rates go up (as I suspect they will) I will still be at 2.75%.
My question: I see a lot of "private" student loan consolidation companies advertising lower rates than what I can get from my lender (I'm being offered 3.25% if I don't include the 8% rate loan in the consolidation). Anyone have experience with these private lenders. They come off as a little suspect. This is a lot of money, and I don't want to get into a mess.
Shared advice and experience would be appreciated.
Cliff's Notes:
1) I have student loans with variable interest rates
2) My lender is offering to consolidate the loans at a fixed low rate
3) Other, unknown lenders offer lower rates
4) Anyone have experience with the "other, unknown" lenders?
Most of it is in the form of variable interest federal loans, there's a $1300 one at a fixed 8.0% and an $1800 one at a fixed 5% rate. These two fixed interest rates are the highest. The variable rate loans are more like 3.5% or less (thanks Mr. Greenspan!).
One of my lenders is offering to consolidate my loans at a fixed rate. I can consolidate the ones I want and leave out the ones I don't. The fixed rate is based on today's interest rates and weighted according to the amount of each loan.
For example, say I have a $5000 at today's 2% variable rate and $2500 at today's 4% variable rate, then I can lock in a 2.75% fixed rate for the next ten years by consolidating. That way, as interest rates go up (as I suspect they will) I will still be at 2.75%.
My question: I see a lot of "private" student loan consolidation companies advertising lower rates than what I can get from my lender (I'm being offered 3.25% if I don't include the 8% rate loan in the consolidation). Anyone have experience with these private lenders. They come off as a little suspect. This is a lot of money, and I don't want to get into a mess.
Shared advice and experience would be appreciated.
Cliff's Notes:
1) I have student loans with variable interest rates
2) My lender is offering to consolidate the loans at a fixed low rate
3) Other, unknown lenders offer lower rates
4) Anyone have experience with the "other, unknown" lenders?
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