Consolidate to Fixed or not?

[OMFSPrime]

Since I didn't know where to post this, I thought I would put it right here amongst my fellow SDNers who will be starting residency soon.

I wanted your opinion or advice on whether I should consolidate a portion of my private loans (variable rate, currently 2.25%) to a fixed rate or not.

When the market improves in the next couple of years, I figure so will the quarterly LIBOR rate set by the fed...meaning my variable rate would go up, potentially to 8-10% over the life of the loan.

Maybe I would benefit by locking it in now?

Wondering what everyone thinks and where you all are in this equation.

OMFSPrime

P.S. Moderators: Feel free to move this thread wherever is best.

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[biorenaissance]

Since I didn't know where to post this, I thought I would put it right here amongst my fellow SDNers who will be starting residency soon.

I wanted your opinion or advice on whether I should consolidate a portion of my private loans (variable rate, currently 2.25%) to a fixed rate or not.

When the market improves in the next couple of years, I figure so will the quarterly LIBOR rate set by the fed...meaning my variable rate would go up, potentially to 8-10% over the life of the loan.

Maybe I would benefit by locking it in now?

Wondering what everyone thinks and where you all are in this equation.

OMFSPrime

P.S. Moderators: Feel free to move this thread wherever is best.

Alot of people ask these questions on dentaltown?

 

[furcation]

Since I didn't know where to post this, I thought I would put it right here amongst my fellow SDNers who will be starting residency soon.

I wanted your opinion or advice on whether I should consolidate a portion of my private loans (variable rate, currently 2.25%) to a fixed rate or not.

When the market improves in the next couple of years, I figure so will the quarterly LIBOR rate set by the fed...meaning my variable rate would go up, potentially to 8-10% over the life of the loan.

Maybe I would benefit by locking it in now?

Wondering what everyone thinks and where you all are in this equation.

OMFSPrime

P.S. Moderators: Feel free to move this thread wherever is best.

I recently looked into the same thing and this is what I know. Since 7/1/2006, all Stafford Loans have had a fixed rate (6.8%). So consolidating any post-06 loans would simply lock in the rate that you already have locked--no big advantage. If you have loans older than 2006, however, those loans most likely have very low variable rates right now, so it wouldn't be a bad idea to consolidate & lock them in. The biggest downside would be that you'd lose any borrower benefit programs attached to the existing loans (like interest rate reductions for on-time payments, etc.) when you consolidate them. Given that, I might think about consolidating any older loans to lock in the low rate, but leaving the newer loans out of the consolidation to preserve the benefits attached to them. In any case, it's up to you.... i ain't got no MBA, just another lowly D-student, so don't think it's solid financial advise or anything..