Question by conrack: If I have already consolidated my student loans, is there still a way to “refinance” for a lower rate?
I currently have a 7.625 rate on my consolidated student loans. Is there a refinancing process for student loans the same way there is for, say, a mortgage?
Answer by thesunnshynne
yes there are lower rates out there, there are several places that u can refinance after refinancing.
Add your own answer in the comments!
yeah, depenedin go your credit rating, but really should talk to a financial specialist, they could get you the best deal
The regulations for the refinancing of Federal student loans are very different from mortgage refinancing. Whereas you could refinance a mortgage as often as you want (well, sort of), reconsolidation isn’t technically supposed to be possible for student loans. There a a few loopholes, though. The only way you might be able to “re-consolidate” would be:
(1) if you borrow a *new* Federal student loan. If you have another loan that is unconsolidated, you can apply for a new consolidation loan that would combine this new loan with your old consolidation loan. However, this would only lower your rate a little bit since your new interest rate would be based on the weighted average of the rate for your new loan and the rate of your old loan. So, if you currently have a Federal Consolidation Loan of, say, $ 20,000 at 7.25% and you borrow a new $ 5,000 Stafford Loan at 4.7%, you’d have four times as much at 7.25% than you do at 4.7%, so your consolidated rate would become 6.75% — not much lower, huh?
That said, you won’t be able to obtain a new Federal student loan unless you are a student, so this may not even be a viable option for you.
(2) if you “have been unable to obtain a Federal Consolidation Loan with income-sensitive repayment terms acceptable to [you],” you can obtain a Direct Consolidation Loan, which is the other type of student loan consolidation that the federal government offers.
This might be your best option. Just make sure that your current loan is a Federal Consolidation Loan (if it’s already a Direct Consolidation Loan, you’re out of luck). If it is, check the Dept. of Ed’s website to see if you are eligible: http://loanconsolidation.ed.gov/borrower/beligible.shtml. There’s no credit check on these loans, so it can’t hurt to try!
There are private companies out there that claim to be able to “reconsolidate” any federal consolidation loan. These companies are SO disreputable that I hesitate to even mention them. DON’T DO IT. They’re in business only to make money off of you. Many of them don’t even deal in Federal Consolidation Loans, so you could end up with a “reconsolidated” private loan with horrible terms and none of the benefits and security of the Federal student loan that you started with.