Student Loan Consolidation Interest Rates - What To Expect?

Student Loan Consolidation Interest Rates - What To Expect?

The rates of interest for consolidations of federal student loan involve some special weighted average calculation. Actually it is the interest rates' (of student loans) weighted average. Did you know that all those Federal Stafford loans endorsed between the first of July, 2006 and the end of June, 2008, come with a 6.8% rate of interest?
On the other hand 6.0%, rate of interest is assigned for Subsidized Stafford loans that were disbursed between the first of July, 2008 and the first of July, 2009. And for your kind information, 5.6% is the rate for Subsidized Stafford loans that were disbursed following the first of July, 2009 and to date. And currently, rates for unsubsidized Stafford loans are 6.8%. So much for student loan consolidation interest rates, huh?

Another fact you should note is that the federal loans for student come with a variety of rates that are all dependent on loan type as well as on their disbursement dates. Take the instance of the rates set for standard Stafford loans that were disbursed prior to the first of July, 2006. These loans are likely to stay variable till they're consolidated.

At present, the rates of interest for Federal loans that were disbursed prior to the first of July, 2006, is at their record lows. Just in case you are still related to Federal loans at a variable interest rate, now is the time to consolidate.

However, origination fees range in between 1% to 5% - it all depends on an individual's credit and/or the co-signer's credit. When the repayment begins, all fees associated with your loan will be capitalized (supplemented to your loan).

This however raises the total amount borrowed. Still, you'll be able to avoid out-of-pocket expenditures at the closing of the loan. There are many free online resources that allow you to view interest rate examples for consolidation of students' private loan.

Other factors involved

Student loan consolidation interest rates are more favorable then other loans under some special considerations. Consolidated loans come with longer terms compared to other loans.

Debtor students are at their liberty to choose any term between 10 to 30 years. But you also must understand that despite lower monthly repayments, the total sum you pay at the closing, is higher than what you otherwise would have to pay on other loans.

You must also consider that features like post-graduation grace time periods or special amnesty circumstances, do not apply in typical consolidation loans.