Steve Blank
Guest
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| Posted: Tue Apr 13, 2004 11:49 am
Post subject: Re: Question on june T bill rates |
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Michael wrote:
| Quote: | Hi
I am considering consoladating my loans. They have been in repayment
for ten years. I have a few questions? How do I find out if the t-
bill rates will be lower in june than they are now? I would prefer to
consoladate at a lower rate if possible. From what I understand I wont
be able to do it again once I lock in to it. Also if I consoladate
does this mean my repayment will start again at zero. In other words I
have been in repayment for ten years now and Im wondering if this
means I will be back to zero period of time in repayment again. I will
be consadating with Direct lending the lender I am currently with.
Right now I believe my rates are 4.35 Percent which from what I
understand is very good. I graduated with a BA in 1996. My original
loans were dispersed in 1992 or somewhere around there. Im not to sure
if disbursement date matters but I do think it does in regard to the
rates I pay right now.Any help will be greatly appreciated as I see
that June is nearing and I want to make the best decision for myself.
Again all help is appreciated.
Sincerely
Mike N
Long Island
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Michael,
Call your lender on June 1 to learn the new rates. The new rates will be
set based on the 91 day T-Bill rate from the last auction in May, and go
into affect on consolidations made after July 1.
If you learn that rates will be going up, you can quickly consolidate at
the current lower rate. It actually would be a good idea to call now to
find out what you have to do. If there are paper forms you should order
them now to have on hand because it can take awhile to get them and then
get the processing done. It's the processed date that controls the rate
and you probably wouldn't be the only one trying to get this done in June.
If rates are going down you can wait until after July 1. Some lenders
will let you set this up in advance during June to be processed right
after July 1.
The current rates on your loans depend on when each was taken, and so
can the consolidation rate. You probably have more than one rate right
now, and the consolidation rate will be a blend rounded up to the next
1/8th of a point. But then it is frozen and cannot go up in future years
when interest rates rise.
When you consolidate you are bringing all your current loan balances
into a new single loan with one fixed rate as of consolidation. Your
monthly payment will depend on your total balance and the payment plan
that you choose.
You can learn a lot more about government Direct Lending consolidation
programs at http://loanconsolidation.ed.gov/index.shtml They also have
charts to give you an idea of your payments under the various plans.
Just keep in mind that the longer you choose for repayment, and the
smaller the monthly payments, the more interest you will pay over the
long run. You should try to pay off the loans in the shortest period
possible if you want to keep the total cost of the loan down. They also
allow you to change plans if you need to.
--
Steven B. Blank
College Financial Aid Consultants
29 Ives Hill Court
Cheshire, CT 06410
(203)250-7761 |
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