So I have been paying off my student for a few months now. Each month, I have been paid more than monthly due, hoping to lower that principal. My question is: can I take any options to lower my interest rate. Should I go to my local bank and try to consolidate my loan? Is that even a good option?
student loan question
- Thread starter mobiblu
- Start date
Yeah, I tried the same thing. My local banks viewed the loan as an 'unsecured' loan and charged me like 10% interest. That would made both my federal and private loans inro one payment. Not worth it, also i couldn't make the payments.
Federal loans should be consolidated as quick as possible. This will save you TONS in interest, but that only applies to federal loans. I have it consolided mine through AES, but Sallie Mae, Citibank, etc also offer options.
Federal loans should be consolidated as quick as possible. This will save you TONS in interest, but that only applies to federal loans. I have it consolided mine through AES, but Sallie Mae, Citibank, etc also offer options.
Yes. Federal will have a significant lower interest rate. The best and most common place to consolidate your federal loans is Sallie Mae.
Big difference. Federal loans can be consolidated easily, private loans are much more difficult to consolidate, but not impossible. I have yet to find a good 'deal' for consolidating private loans.
For your loans, try Citibank, AES, Sally Mae, others to see who gives the best deal as far as interest rate. My payments are only $135/month after i consolidated. Its great.
What? Federal loans are only at 6.8 at this time. Private loans are at prime + .75 and are generally right around 8.5.
Also, read your promissary notes. If you consolidate, you may not be able to defer for any reason. I'm not consolidating because I want to go get a masters soon.
Rumpltzer
Diamond Member
- Jun 7, 2003
- 4,815
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I consolidated my loans right off the bat. I shopped around a little for the best options and chose to go with the Department of Education's Direct Loan Servicing.
I had a couple of small, private loans that were at an 8% rate and I chose not to consolidate those. I paid them off in a year and kept my consolidated interest rate at 3.25%. After a year of online payments to the DOE, they gave me an extra 0.25% break on the interest.
I read a whole lot on the Fatwallet thread about student loan consolidation. It was a massive thread at the time when I was looking into this. Is it gone now??
I had a couple of small, private loans that were at an 8% rate and I chose not to consolidate those. I paid them off in a year and kept my consolidated interest rate at 3.25%. After a year of online payments to the DOE, they gave me an extra 0.25% break on the interest.
I read a whole lot on the Fatwallet thread about student loan consolidation. It was a massive thread at the time when I was looking into this. Is it gone now??
The best thing that you can do is consolidate your loans if you plan to stick with that lender. Sallie Mae is who I have my loans with and it was really easy to consolidate. If you don't know how to consolidate your loans just visit your lender's website or call them.
I have been thinking about pursuing another option, but I do not know if it will work:
Everyone knows that there are tons of credit card offers with 0% interest for a year and they often toss in a free balance transfer too. There are websites which list hundreds of these deals so that you know who to call. I use nothing but these cards and I never pay a dime in interest because I simply transfer any remaining balance I have after the year passes to a new card with the same deal. I then cancel the old card. Rinse and repeat.
What I want to look into is the possibility of doing the same thing with 0% interest credit cards, but to transfer portions of my student loan balance to these cards. I do not know if the credit card companies or the lenders will allow this to happen though. If they will let me do it then I will probably have to apply for 3 or 4 cards due to the maximum balance issue, but that still means that I pay no interest. Dealing with 3-4 separate payments is a bit more of an inconvenience, but it would save me thousands in the end.
If you can get this idea to work then that will solve all your interest issues. Has anyone tried this or something similar and got it to work?
I have been thinking about pursuing another option, but I do not know if it will work:
Everyone knows that there are tons of credit card offers with 0% interest for a year and they often toss in a free balance transfer too. There are websites which list hundreds of these deals so that you know who to call. I use nothing but these cards and I never pay a dime in interest because I simply transfer any remaining balance I have after the year passes to a new card with the same deal. I then cancel the old card. Rinse and repeat.
What I want to look into is the possibility of doing the same thing with 0% interest credit cards, but to transfer portions of my student loan balance to these cards. I do not know if the credit card companies or the lenders will allow this to happen though. If they will let me do it then I will probably have to apply for 3 or 4 cards due to the maximum balance issue, but that still means that I pay no interest. Dealing with 3-4 separate payments is a bit more of an inconvenience, but it would save me thousands in the end.
If you can get this idea to work then that will solve all your interest issues. Has anyone tried this or something similar and got it to work?
anyone know if it would be better to not be claimed as a dependent by your parents, and then apply for loans? Cause i get practically nothing, and the parents wont pay all of what i need.
Ns1
No Lifer
- Jun 17, 2001
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absolutely do NOT do your consolidation with sallie mae! There are SO MANY other competitors offering way better programs ie no funding fee, .25 off for 2 years of ontime payments, .25 off for ACH transfers, etc. Sallie Mae won't give you sht!
If you consolidate federal you can apply for the federal loan consolidation program (whatever it's called) and get locked in at a fixed rate (whatever it may be now). If you have a private loan then your only option is to get ANOTHER private loan w/ longer terms and possibly a lower interest rate. However this is tied to your credit and can vary greatly.
I am not an expert when it comes to taxes, but my mother works at a CPA firm so she is a tax professional. When I was in college, she told me that it was for the best to remain as her dependent so I am guessing that it will be the same situation for you. Everyone's financial situation is different though so I can't guarantee anything.
Yeah, mine federal loan rates are 3.37%; if they weren't stupid am penalized me for not paying my bill of $0. That's right, i was paying ahead and my payment for that month was $0, so i sent them nothing as they requested. And i got penalized 0.25% for not paying my bill! stupid.
Anyway, my private loans are 8.something or another and i don't know how to reduce them. Haven't found a good deal on those yet. I might just put the entire loan on my 0% APR credit card. But that means it goes from being 'investment debt' to 'unsecured debt'; which negatively affects your credit score. there are many options though.
I know very little about convenience checks, but after a quick 5 min Google search I am reading stuff about how credit card companies will charge hefty fees for using them. Fees such as 5% of the amount of the check are talked about and there is also talk of a large interest percentage (the number I read said around 20%) to that amount.
I guess what I want to know is whether the site I saw only referred to certain credit card companies while others offer good deals that last a year or something like that. Preferably deals with no interest and no fees. Does anyone have experience with this?
i was under the assumption, that since my parents make 100,000+ a year combined, the gov thinks they should be paying most of my tuittion (which they wont be doing). So if i am not a dependant, the gov will see that make 15k a year and give me loads of money. No idea what to do.
sorry for thread hijacking
Ns1
No Lifer
- Jun 17, 2001
- 55,420
- 1,600
- 126
<div class="FTQUOTE"><begin quote>Originally posted by: Xavier434
<div class="FTQUOTE"><begin quote>Originally posted by: NeuroSynapsis
Easy. Use convenience checks. Deposit. Pay off loan. Repeat. Repeat. Repeat.
</end quote></div>
I know very little about convenience checks, but after a quick 5 min Google search I am reading stuff about how credit card companies will charge hefty fees for using them. Fees such as 5% of the amount of the check are talked about and there is also talk of a large interest percentage (the number I read said around 20%) to that amount.
I guess what I want to know is whether the site I saw only referred to certain credit card companies while others offer good deals that last a year or something like that. Preferably deals with no interest and no fees. Does anyone have experience with this?</end quote></div>
Depends on the check. Usually they'll give you a few, 1 with <1% interest rate valid for 6 months, and a few with 4% for the life of the loan. Fees are usually 5% with a min of $5 and a maximum of $75. So the fees can be negligible depending on the balance/amount of the check.
ex) chase convenience check, 4k, 4% interest for life of balance, $75 fee.
<div class="FTQUOTE"><begin quote>Originally posted by: NeuroSynapsis
Easy. Use convenience checks. Deposit. Pay off loan. Repeat. Repeat. Repeat.
</end quote></div>
I know very little about convenience checks, but after a quick 5 min Google search I am reading stuff about how credit card companies will charge hefty fees for using them. Fees such as 5% of the amount of the check are talked about and there is also talk of a large interest percentage (the number I read said around 20%) to that amount.
I guess what I want to know is whether the site I saw only referred to certain credit card companies while others offer good deals that last a year or something like that. Preferably deals with no interest and no fees. Does anyone have experience with this?</end quote></div>
Depends on the check. Usually they'll give you a few, 1 with <1% interest rate valid for 6 months, and a few with 4% for the life of the loan. Fees are usually 5% with a min of $5 and a maximum of $75. So the fees can be negligible depending on the balance/amount of the check.
ex) chase convenience check, 4k, 4% interest for life of balance, $75 fee.
Gone are those days I'm afraid. I just graduated and my federals are at 6.8. Wachovia privates at 8.5 (with a 20 year payoff HA!)
The Wachovia's will be gone in a year hopefully and then I'll pay the Federal's on schedule to help build my credit history (score is great, history is short).
Usually if you get a card with a 0% APR; and transfer nothing to the card, the company will call within a week or two asking if you want to transfer something over, at least in my experience. The 'offers' are usually done with no fees and I find to be the best way to get your debt transfered rather than dealing with convenience checks and things.
Are you sure that paying off debt on 0% APR cards negatively affects one's credit card score? I would be surprised to learn that this is true only because 2 1/2 years ago I had a credit score that was over 100 points less than what I have now. Since that time, I have been making car payments, student loan payments, and several 0% APR credit card payments. Now, unless the negative effect of 0% APR is nothing compared to the positive effect of car and student loan payments, I don't see how my credit score could have risen so much so quickly.
I'm not saying you are wrong. I just want to read and learn more about it.
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