How do you refinance student loans to take advantage of the 2.25% fed rate

[Juche]

Student loans were locked in at 6.8% and the fed's rate is now 2.25%. I do not know much about banking or student loans so I am looking for info.

If I got someone with good credit to cosign a consolidation loan, what kind of interest rate could I get with the current federal reserve interest rates? Does the credit crunch nullify the benefits of the lower interest rates? Where do I go for help (bank, debt management place, credit counseling service, financial aid department, etc) to learn more about this subject?

[Pierre.Suave]

1. My first call would be to...

the company administering my Student loan. See if they want to do anything, or have anything they can do. After that, I guess a bank.

[SCantiGOP]

2. Don't think that's right

2.25% is the fed rate that they loan money to banks. I don't think it's any way tied to student loan rates.

[Juche]

3. I'm wondering about replacing my student loan

Ie, take out a bank loan and use the money to pay off my student loans so that I owe the bank instead.

[Rabrrrrrr]

4. It's worth talking to your bank about it,

they might offer a "consolidation" loan of some type that will let you get a lower interest.

On the other hand, you get a tax deduction for the interest on the student loan, and the savings from that might make be better than the interest savings on a lower rate loan (which is definitely going to be higher than 2.25%).

Also, with the student loan, you do have some freedom in that you can go do Peace Corps or go back to grad school or do any other number of activities (including sickness and unemployment) that will allow you to stop paying and/or forgive the debt entirely. With a bank loan, you're stuck with it - even if you become unemployed.

[Trailrider1951]

5. I'm sorry, but your cannot refinance your student loans

once you lock in a rate. Mine is locked at 8.25%, from when I consolidated in 2000. :-( Your interest rate is now for the life of the loan, in my case, 20 years.


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