Reducing Your Student Loan Interest Rate

If you want to reduce your student loan interest rate, there are several methods to choose from.

Loan Consolidation

If you used more than one source for your student loans, the rates may vary depending on the year you took out the loan. If current loan rates are lower, consolidating all of your loans into one can lower your payment.

You can also extend the term of your loan to lower your monthly payment; however, this will add to your finance charges. If you project your income to rise--for example, if you are getting married soon and will benefit from your spouse's income--you can counter the cost of extending the term by increasing your loan payments as your income grows. Many lenders offer incentives for paying off a student loan early and for having the payment automatically debited from your bank account. Contact your lender to see if it has any incentives available.

Use a Different Loan Product

You may be able to get a lower rate by using a different type of loan. For example, if you have stocks that you can pledge as collateral, the loan rate you get may be better than your student loan rate. Check with different lenders to find out the loan programs they have available for the type of collateral you possess.

Additional Information

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