NWR: Tips for lowering student loan interest rate

posted 3 years ago in Money
Post # 3
Member
721 posts
Busy bee
  • Wedding: January 2004

@mseagles:  What company are your loans through? AES and Chase wouldnt help me 🙁 

Post # 4
Member
2895 posts
Sugar bee
  • Wedding: May 2014

Can I ask what  your starting interest rate is? 

Post # 5
Member
1312 posts
Bumble bee
  • Wedding: March 2015

@mseagles:  For my federal loans, my interest rates were lowered a teeny bit as a benefit of doing automatic monthly payments. Like from 6.8% to 6.55%.

Post # 7
Member
644 posts
Busy bee
  • Wedding: May 2010

I had a loan from Sallie May for around 7k, the interest rate was ridiculous (I’d pay 500/month and half went to interest) but they wouldn’t work with me to lower it at all, and I really tried, PROMISE. I actually did what people tell you not to do and I took out a bank loan through my credit card for 0% interest for the first 24 months, I took the loan money and paid off the 7k student loan. Then I just had the credit card debt that I was able to pay off with no interest within the 24 months (bonus points were that I paid it off quicker than 24 months and was paying less montly – this loan would have doubled had I kept doing what I was doing).

EDIT: I wanted to add that I had another loan through fafsa that once the sallie may was paid off I was able to put that money toward the other loan and pay it off much faster too.

Post # 8
Member
391 posts
Helper bee
  • Wedding: July 2013

2.88 for the federal loan is really low! I consolidated mine in 2006 at 4.5 with a .25% automatic payment discount.

As far as for Sallie Mae, can you refinance this loan to lock in a fixed rate? I don’t think they’re going to lower your interest rate otherwise.

Post # 9
Member
6513 posts
Bee Keeper
  • Wedding: June 2013

@cora_123:  huh that’s really interesting. I’ve never heard of that before but it sounds like a good idea. Why do people say not to do it? Does it affect your credit score negatively?

Post # 10
Member
293 posts
Helper bee
  • Wedding: December 2014

@MrsBeck:  No, but you lose some benefits like student loan interest deductions on taxes, and if your position suddenly changes and you can’t pay off the bank loan, the interest rate gets pretty high. Plus, student loans are “good debt” that doesn’t hurt your credit but bank loans might. If you really can pay it off in the time that you have 0% interest, I think it’s a great idea.

What I was told to do was get a home and eventually get a home equity loan to pay off my student debt (if the interest rate is favorable) but that’s because my debt load is hilariously high from professional school, so I’ll probably have some good equity built up before I get most of my loans paid off (not true for most undergrads though).

Post # 12
Member
644 posts
Busy bee
  • Wedding: May 2010

@MrsBeck:  I think it’s the idea that you are keeping yourself in debt to pay off another debt, the whole “robbing peter to pay paul” mindset and what @zumbaista: said is true for a lot of people. For me though the tax benefit wasn’t a benefit at all, really didn’t help me, and even if I wasn’t going to be able to pay it off within the 24 months my interest rate would have been lower than what I was paying. Doing this didn’t lower my credit. BUT keep in mind these are all things I looked into before making this choice, I didn’t just get the promotion and the mail and jump in blind 🙂

 

Post # 12
Member
1082 posts
Bumble bee

Bringing back an old thread!  Did anyone have any luck??  DH has a horrible variable rate loan, that was bought out 10 mos ago by AES and they have raised the rate every single month.  We want to get this thing GONE, it’s too much to lump sum pay off, we could make much larger payments but they’re so scummy we’re afraid they’d just raise the rate to counter any progress we’ve made.  How do we get moved to a fix rate or refinanced or whatevss?? 

Post # 13
Member
11740 posts
Sugar Beekeeper
  • Wedding: November 1999

SisterJude:  You’d probably have more luck getting responses for your specific issue by starting your own thread instead of pulling up one that’s 2 years old. 

Post # 14
Member
4 posts
Wannabee

SisterJude:  I used Earnest to consolidate my student loans and it’s saved me a ton of money. My average rate for my federal loans was around 5.5% (highest 6.5%) and I got it down to a variable rate of around 3.5% (I forget exactly what it is now; it’s only gone up a fraction of a point since October).

If you (or anyone else) decides to use them, you can use my referral link and get an extra $200. I’ll PM you. 

I’ve been happy with Earnest; it was a smooth and easy process. I also checked out SoFi and DRB, but Earnest was the one to give me the lowest rate overall, and SoFi had crappy customer service (“surfer dudes” in the call centers). DRB had pretty low fixed rates.

Leave a comment


Sent weekly. You may unsubscribe at any time.

Find Amazing Vendors