How can I lower the interest rate on my student loans?

Question

I owe about 35,000 in stafford student loans (17,500 subsidized and 17,500 unsubsidized and want to lower the interest rate. Right now it is at 6%. I'm still in school but at the current rate I am being charged about 3.00 a day interest on the loans that the the government isnt paying the interest on. I've heard of consolidating but I don't really know how it works or where I should go to begin or even if I can consolidate since I'm still in school. Help!

Answer 1

You probably can't get any lower rate but you can simplify things by consolidating. If you have more than one, start with the lender that offers the lowest rate and then work your way up until someone is willing to purchase your other loans and combine them at that rate.

In case you aren't aware, it likely isn't all one lender, even if they all are umbrella-ed under the Stafford program. You might have a loan with a bank, or Sallie Mae, or another specific student loan lender, so you are most likely paying back more than one company under more than one contract (promisory note). A consolidation if nothing else will give you ONE promisory note, ONE interest rate (go as low as possible) and ONE payment schedule. Sometimes that is enough to make life a lot better.

You get a low rate on the grounds that you are borrowing in order to better yourself, increase your marketability, and get to the place occupationally where you can pay them back in a reliable way. If you have compromised that for some reason, your rate will not likely stay the same, mostly if you are delinquent.

You may be able to stop the interest meter from running until after you graduate, it is worth looking into. Do all your lenders know that you are STILL taking classes? If so, most times all payments are deferred. I'm not sure if conditions are the same in the situation of returning to school after the first degree is earned, either to just take random classes, or get another equal value degree, or to get a more advanced degree. Simply put, you may not be able to defer your payments (and interest accumulating) if you earn your BA in sociology and then sign up for underwater basketweaving for a semester, or start working on another BA for psychology, or even if you go to grad school for sociology.

Of course some things to consider: DON'T overborrow, DON'T defer more than you have to, in order to minimize expenses in the short run, and DON'T undercommunicate with your lenders if you get in trouble.

All spoken from experience because I did all three, and have been in default more than once, which forces the lender into their most aggressive tactics to get your money.

All due respect to Melissa from Chase, but I think using a credit card is a horrible idea and probably wouldn't work anyway. For one, at your age, you are likely not able to get a credit limit high enough to cover all your loans. Second, credit card companies, if you have any trouble whatsoever making payments, your conditions on the card are likely to change...with a credit card interest rates can skyrocket to upwards of 20% or more which would throw you into hopeless debt and destroy your credit history.

Best to ya!

Answer 2

See if you can open a credit card and pay it off. Chase offers a 4.99 F APR for the Life of the Loan on transfers, or even like 0% for the first year, then you can move it from one card to another taking only low rates, i work at Chase. so i think that would help. I did myself personally with my student loans... well my mom did it for me , cause i couldn't get approved for a 25,000 credit line. ha ha

Answer 3

you cant consolidate until after graduation, and even then you're not going to get a rate lower than 6% until you've had a good payment history established with the lender, becuase they will reduce your interest with good payment history. After you graduate you can consolidate and have just one payment, but you're not going to get much better than 6%

Answer 4

By paying more each month and over a shorter period of time.

Answer 5

You need Mafia connections.