It’s nice to consolidate I suppose, but it doesn’t save you any interest….until now.There are currently two options available (and hopefully many more to come) where students can actually refinance their student loans at a lower interest rate.Unfortunately, those who have big fat student loans don’t generally have any home equity, and by the time you get some, the student loan situation isn’t so bad.
[Update: Although I didn’t have a financial relationship with either of these companies when this article was written, I do now.
DRB has paid me for advertising and I have an affiliate agreement with So Fi (meaning if you actually refinance with them through one of the links on this page I get paid.)] One of the things I feel the worst about for current students, residents, and new attendings is that not only do they have a much higher amount of student loan debt, but they are paying a ridiculously high amount on it.
Federal loans were, until recently, offered at a minimum of 6.8%, with many students now having a majority of their debt at 7.9%!
I find it completely unfair that I can get a mortgage for less than the rate of inflation, and dump it in the case of bankruptcy, but you can’t get student loans from the government for twice that AND they can’t be discharged in bankruptcy.
Rates range from 4.99%-6.99% fixed (with a 0.25% discount for autopayment), or 2.94-5.19% (capped at 8.25%) variable, again with a discount for auto payment.
(All rates, terms, and figures are subject to change by the lender without notice.
You may be contacted by private companies that offer to help you apply for a Direct Consolidation Loan, for a fee. There’s no need to pay anyone for assistance in getting a Direct Consolidation Loan. The loans that were consolidated are paid off and no longer exist.
For example, if you have both Direct Loans and other types of federal student loans, and you have been making payments toward PSLF on your Direct Loans, you should not consolidate your Direct Loans along with your other loans.
For the most up-to-date information, visit the lender’s website directly.) I think this is a great option for a borrower.
You get lower rates than you get from the government.
That’s about as close to free money as you’ll ever get.