Find the Best Rate for Student Loan Consolidation

#1: Make sure special discounts are permanent and not just temporary or introductory rates.

Many lenders will offer big drops in interest or even in interest-bearing principle, but those rates are only temporary and revert to higher rates (with interest again charged on all of the principle) after a short initial period. Always make sure that the discounts that your lender offers are permanent.

#2: Gravitate toward non-profit lenders.

Non-profit lenders can often offer the best rate for student loan consolidation because they have fewer operating costs than for-profit lenders. Check non-profit sources first and you may find that their rates are better which will narrow your search right out of the gate.

#3: Look for lenders who offer discounts for auto-debit arrangements.

Some lenders have special discounts like lower principle or interest rates if you agree to have your monthly payment automatically withdrawn from your bank account. While this might look like extra savings for you, be sure that the discount is permanent and that you know the conditions in which they’ll cancel the discount (like in the case of insufficient funds or other problems) that way you can make sure to get that discount for the duration of the loan and you can get the best rate for student loan consolidation.

#4: Consolidation loans are required to offer at least a 0.6% interest reduction for you while you’re in your grace period.

Many companies will advertise this minimum 0.6% interest reduction as a special feature or benefit that they’re offering you. This is hype, as they’re required by low to offer that as a minimum reduction if you consolidate while in your grace period. If this is all they can offer you, you should shop around.

#5: Laws forbid fees for the loan, early repayment penalties, credit checks and variable interest rates.

Along with the law-required 0.6% interest reduction, the law requires companies to offer you consolidation loans without checking your credit or charging you fees. You can also opt to repay the loan faster than stated in the plan without penalty. When you’re trying to get the best rate for student loan consolidation, beware of companies that act as if these are special features, because they’re probably trying to cover the fact that they really have little to offer.