Federal Student Loan Interest Rates


As you decide to go for one of those Federal Student Loan Consolidation plans you may be concerned about the interest rates you have to pay. Although the plan as well as the interest rates are largely regulated by the federal laws in force, you may also have a close look and make an in depth study of the plan you have opted for.Student loan interest rates under the Federal plans are ordinarily determined on the basis of the average of all student loan interest rates taken together. The rate of also fluctuates periodically. For example the Federal Student Loan Consolidation interest rates during July 1st 2006 to June 30th 2008 were 6.8%. The current rate is lower at 6% only.Variable student loan interest ratesStudent loans that were disbursed before the first day of July 2006 carry variable interest rates. Such rates could be converted into static one with loan consolidation. On consolidation these loans are readjusted on the first day of July every corresponding year.Rates of interest have undergone changes with effect from 01.07.2008. Stafford loans that are in grace period have been reduced to 3.6% against the existing 6.6%. Such loans in repayment now carry interest rates of 4.21% reduced from prevailing 7.22%. Similarly the PLUS loan rates have also been reduced to 5.01% from the existing 8.02%.For instant information you can log on to any of the numerous websites that provides such information on student loan consolidation interest rates. However it would be better to make some research about the credibility of the provider before accepting the information or advice provided.Basics of the student loan consolidation interestInterest rates for the Stafford loans both subsidized and unsubsidized ones fluctuate periodically though they never go beyond 8.25%. However when you consolidate your loans the weighted average of all the prevailing interest rates of your existing loans are taken in to consideration to calculate the applicable interest rate.Till July 2008 various types of federal loans had interest rates in the range of 4.125% to 8.02% with perking loans having the minimum and PLUS loans the maximum interest rates. The ratio of the previous consolidations and existing consolidations are taken into consideration in such cases.Consolidation during grace period could be beneficialThough ordinarily the consolidator cannot guarantee you any specific rate or reduction before the consolidation process is over it could be better to go for such consolidation in the grace period. For example, if you have taken a student loan prior to the first day of July 2006 you might be having a variable interest rate applicable.In such cases it could be beneficial for you to have your college loan consolidation [http://www.badcreditokay.net] during the grace period to have the best student loan consolidation rates. The only point to look after is that your application should reach the consolidator before the grace period is over. On receipt the consolidator will include the end date of your grace period and will complete the consolidation process on expiry of the grace period and consolidate student loans giving you a reduced rate.