Monday, July 16, 2007
Consolidating Student Loan
Consolidating student loansbefore starting repayment is done with the lower in-school interest rate. So while rounding up the weighted average may cost up to 0.13%, consolidating before starting repayment saves up to a substantial 0.6% net savings. The in-school interest rate is 1.7% with the 91-day Treasury Bill rate from the last May auction. During repayment, the interest rate is the 91-day T Bill rate plus 2.3%. Federal Register and the US Department of Education have confirmed the loophole. Among the main benefits of consolidation student loans are:
--A single payment to replace multiple payments of student loans.
--Accessibility to alternatives including extended repayment, graduated repayment and income contingent repayment. The extended repayment plan term is based on the balance which is higher on consolidation student loans.
--Locking in the interest rate including for the lower in-school interest rate during the grace period.
# posted by karthika : 2:43 AM
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