Question about loan consolidation

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Smumps
Posts: 332
Joined: Sat Dec 03, 2011 1:37 pm

Question about loan consolidation

Postby Smumps » Sat Jun 16, 2012 7:53 pm

Recently I received an email from the Government with the option to consolidate my Sallie Mae loans. Here is the the important part of the email I received:

"if you consolidate some of them now into a Special Direct Consolidation Loan, you will receive a 0.25% interest rate reduction from the current interest rate on each commercially-held Federal Family Education Loan Program loan as of the date it is consolidated."

My question is what would the interest rate on the consolidated loans be? As of now, both my sallie mae loans have interest rates of 2.625%. I'm assuming this rate would increase if the Government owned it (since their rate is higher), but I read something about keeping it the same.

Obviously I'm confused. Help!

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Smumps
Posts: 332
Joined: Sat Dec 03, 2011 1:37 pm

Re: Question about loan consolidation

Postby Smumps » Sat Jun 16, 2012 7:53 pm

And btw, these are undergraduate loans I've had for a while. Not GradPLUS/law school related.

Renzo
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Joined: Tue Dec 02, 2008 3:23 am

Re: Question about loan consolidation

Postby Renzo » Sat Jun 16, 2012 8:33 pm

It will be a weighted average of the rates on the loans you consolidate. If you qualify for the special consolidation, you most likely want to take advantage of it.




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