How to Save Money by Lowering your Interest Rate on a Student Loan
Lowering your overal Student Loan Debt
Lowering your interest rates on any loans you may have is always a smart idea. Its not always easy to accomplish, but it is worth a try. You get to keep more of your hard earned money by doing so in the long run. Even one half of one percent over many years can really add up, so don't think that trying to get it reduced even a little is no big deal. Calculating over your repayment period of what can be 10 or 20 years (and now even longer) can add up to sizable amounts. You may be surprised at what you can accomplish especially if you try your best to keep your credit in good shape.
Start by asking lenders about interest rate reductions for using an automatic debit program. Having your money go right into where it needs to has many benefits. From your checking or from electronic billing, you can often get this done. Some lenders will also offer incentives like lower interest rates for those that pay their bills on time. Sometimes it is not until you have made about twenty four to thirty six consecutive payments. This sounds like a long time, but it comes before you know it, so don't forget about this option. Often for this kind of reduction, it is about one percent drop in your interest rate. Its something!
More thoughts on Student Loans
Consolidating and Home Equity Loans
Another option that I have talked about in other hubs is to consolidate your student loans. You bring many loans together and combine them for greater savings. Many people have done this and benefited from it. Another idea is to consider taking out another kind of loan over keeping a high interest loan. If you do this just make sure to look into all the details very carefully, as you don't want to be hit up with other fees or possible problems you couldn't have anticipated..
Some have tried a home equity loan which can serve as a lower interest alternative. Just be aware that you can sometimes lose certain student loan features if you do this. It may be worth it however, to get the lower rate which is the goal so you get out of debt more quickly. Government loans often have a low interest rate to begin with and you may qualify for some loan forgiveness programs. This is especially true if you go into teaching, public service, the military and health care.