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- May 13, 2007
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- 35
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About to start the repayment process and I have applied for consolidation, but after some number crunching, I am not sure if actually makes more since. All I have are Stafford loans from medical school, all at 6.8 %, managed by the same bank, and owned by the Dept. of Education. On the consolidation estimate, the interest rate dropped to 6.625%. However, when unconsolidated, the bank has offered the 0.25% interest rate reduction for the automatic electronic payments, which would give me 6.55% interest. The difference in annual interest is ~ $75 a year (based on $100,000 debt). FYI, I believe the consolidation interest rate is based on the same 0.25% reduction for automatic electronic payments; however, the terms of the consolidation note says that the set interest rate will be rounded UP to the nearest 1/8 percentile, so 6.8% goes to 6.875% (thanks government).
I still have more than a week to back out of the consolidation, assuming no penalties, financial or otherwise, are applied.
In all, does it even make since for someone in my loan situation to even consolidate? Are there other benefits to consolidation that I am missing? BTW I am currently set for IBR.
Banking wise, I think consolidation amounts to fewer mouse clicks, but I then I have the slightly higher interest rate ($75 isn't much, but I know exactly what I can do with it).
I still have more than a week to back out of the consolidation, assuming no penalties, financial or otherwise, are applied.
In all, does it even make since for someone in my loan situation to even consolidate? Are there other benefits to consolidation that I am missing? BTW I am currently set for IBR.
Banking wise, I think consolidation amounts to fewer mouse clicks, but I then I have the slightly higher interest rate ($75 isn't much, but I know exactly what I can do with it).
